Andre and Secretary, Department of Social Services (Social services second review)

Andre and Secretary, Department of Social Services (Social services second review) [2018] AATA 941 (19 April 2018)
Division:GENERAL DIVISION
File Number(s): 2017/0278
Re:Anne Andre
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Member K. Parker

Date:19 April 2018
Place:Melbourne

The Tribunal affirms the decision of the Social Services and Child Support Division of the Administrative Appeals Tribunal (AAT1) made on 9 December 2016. The Tribunal concludes that the debt as recalculated by Centrelink in accordance with the AAT1 decision should not be written off or waived either in whole or in part, as the discretion of the Tribunal to do so was not enlivened under the Act for the reasons set out in this decision.
.................[sgd].......................................................
Member K. Parker
SOCIAL SECURITY – special benefit, newstart allowance and disability support pension – debt raised to recover overpayments – income from past employers only declared in part – income from income protection payments not declared initially and later adjustments to those payments were not disclosed to agency – whether discretion to write off or waive debt enlivened – special circumstances – debt attributable solely by administrative error by the Commonwealth – delay in raising debt – financial circumstances of applicant – applicant in poor health and has a number of disabilities – decision affirmed
Legislation
Social Security Act 1991 (Cth)
Social Security (Administration) Act 1999 (Cth)
Cases
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114
Ryde v Secretary, Department of Family and Community Services [2005] FCA 866
REASONS FOR DECISION
Member K. Parker
19 April 2018

Miss Anne Andre (Miss Andre) seeks review of a decision to raise a debt against her for overpayments of social security benefits. Those overpayments were made because Miss Andre’s social security benefits were calculated to be paid at a rate higher than the rate to which she was entitled. The reason for this was that the income figures used in the initial calculation of the benefits were incorrect. Miss Andre does not dispute this, however, she considers that it is “unfair” for this debt to have been raised against her in the circumstances, and that it should be written off or waived.
BACKGROUND
Miss Andre has received the following benefits under the Social Security Act 1991 (Cth) (Act):
(a)Special Benefit from 20 January 2009 to 27 February 2010;
(b)Newstart Allowance from 28 February 2010 to 21 June 2010; and
(c)Disability Support Pension (DSP) from 22 June 2010 onwards.[1]
[1] The Secretary, Department of Social Services lodged with the Tribunal a set of documents on 14 February 2017 pursuant to the obligation arising under s 37 of the Administrative Appeals Tribunal Act 1975 (Cth) (T-Documents). Refer T-Documents T29/340 which is an “allowance/benefit history” printout from Centrelink’s records, and T28/339.
During part of the periods referred to in the above paragraph, Miss Andre received:
(a)wages from her employment at Woolworths and Programmed Recruitment; and
(b)income protection payments from AIA Australia Ltd (AIA), through her REST superannuation policy.
Wages from Woolworths and Programmed Recruitment
There was no dispute between the parties that the wages received from Miss Andre’s employment at Woolworths and Programmed Recruitment should be taken into account for the purpose of calculating her social security benefits. A problem arose because the full amount of those wages was not declared to Centrelink initially when her rate of benefits were first calculated and paid to Miss Andre. The Tribunal accepts Miss Andre’s evidence that this occurred inadvertently and that Miss Andre did not intend to “under declare” those wages to Centrelink. Miss Andre explained that she was dealing with a great number of significant personal challenges in her life at that time and the Tribunal accepts that this was so. No doubt those challenges caused Miss Andre great distress.
Miss Andre initially declared her income in the 2009/2010 financial year to be $4,843. Miss Andre gave evidence that she provided her 2009/2010 tax return to Centrelink on 4 August 2010. Miss Andre’s declared earnings in her 2009/2010 tax return were $17,671.
It was not until 15 October 2013, over two years later, that Centrelink wrote to Miss Andre to advise her that there was a discrepancy in the declared earnings for the 2009/2010 financial year.[2] This letter requested that Miss Andre call Centrelink and that she may need to provide documentation to confirm her income details. Miss Andre was asked whether she was able to explain this discrepancy.
[2] Refer T-Documents T40/372.
Centrelink discussed this letter with Miss Andre on 21 October 2013 and recorded Miss Andre’s response as follows:[3]
Customer not sure about earning discrepancy & advised ceased work in March 2010 & has not worked since however receives Income Protection payments from AIA Australia (& still does) which started in 09-10 & may of received a lump sum. Customer to provide local office with latest details for Income Protection payments as stated gets $100 per month & advised her only held by Centrelink as $606 per annum.
[3] Refer T-Documents T40/372.
Centrelink wrote to Woolworths and Programmed Recruitment to confirm the amounts they paid to Miss Andre arising from her employment with them. On 24 December 2013, Woolworths Limited sent details of Miss Andre’s earnings to Centrelink for the period July 2009 to July 2010.[4]
[4] Refer T-Documents T6/41 & 42.
Miss Andre did not dispute those amounts once confirmed by her past employers. Miss Andre took issue with the fact that it had taken Centrelink six years after she first provided Centrelink with her 2009/2010 tax return, for it to raise a debt against her (which it did on 1 June 2016).
Income protection payments from AIA
Centrelink contacted Miss Andre on 17 August 2011 after it became aware of payments being made to her by AIA.[5] From Centrelink’s record, it appeared that Miss Andre was asked whether she was employed by AIA. Miss Andre advised that she did not work for AIA but that AIA had paid her income protection payments, commencing in April 2010.
[5] Refer T-Documents T40/363.
On 21 October 2011 and 17 November 2011, Centrelink requested information from AIA about the income protection payments made to Miss Andre and attached a questionnaire for completion.[6] This form was completed. On the form, AIA confirmed that Miss Andre was being paid ongoing monthly income protection payments as follows:[7]
$50.50 gross after offset for Centrelink.
Entitlement:
$1,286.83 income
$115.82 super
But due to Centrelink actually gets:
Income $50.50 gross
Super $115.82
[6] Refer T-Documents T4.
[7] Refer T-Documents T4/28.
On 24 November 2011, a Centrelink form entitled “Defined Benefit Income Stream Schedule for Centrelink assessment purposes” was also completed stating that on 2 May 2010, Miss Andre commenced receiving gross payments of $50.50 per month after Centrelink deductions.[8]
[8] Refer T-Documents T3.
A Centrelink file record dated 30 November 2011 stated that, “act* sent to compensation team on 30/11/2011 for compensation clearance”.[9] A Centrelink file record dated 1 December 2011 noted that, “response recd from compensation team, no compensation for aia australia, placed in finready”. A Centrelink file record dated 20 January 2012 noted that:
Review finalised – NCC
Match with AIA Australia
SUPS coded – Income Protection
Cust receiving $50.50 gross per month after Centrelink offset.
Cust has been receiving this since 02/05/10.
[9] Refer T-Documents T40/363.
On 20 January 2012, Miss Andre’s income protection was recorded as $50.50 gross per month after Centrelink offset and it was noted that Miss Andre had been receiving that amount since 2 May 2010.
On 1 November 2013 (following the communications between Centrelink and Miss Andre as outlined in paragraphs [6] and [7]), Miss Andre provided Centrelink with letters she had received from AIA dated 7 June 2012, 12 December 2012, 25 March 2013 and 2 August 2013 (AIA letters). The AIA letters confirmed Miss Andre’s income protection entitlements and payments made to her for the periods specified below:
(c)2 May 2012 to 1 November 2012;
(d)2 November 2012 to 1 May 2013; and
(e)2 May 2013 to 1 December 2013,
On 6 February 2014, Miss Andre provided to Centrelink her tax returns for the 2010/2011, 2011/2012 and 2012/2013 financial years.[10]
[10] Refer paragraph [14] of the Secretary’s SFIC and T-Documents T7, T8 and T9.
Debt raised by Centrelink on 1 June 2016
A Centrelink file record dated 31 May 2016 stated as follows:[11]
Customer also had income protection payments for AIA. SUPS shows amounts $50.50 per month but the SS40 shows gross amounts of $1238.53 more per month. It also shows the amount being offset by Centrelink.
As per OBP 108-05070010 “The regular ongoing payments are assessed as ordinary income. The presence of any offset clauses in the superannuation fund’s group insurance policy has no relevance, as these payments are not subject to compensation rules. Gross income is assessed and Centrelink does not make any adjustments for offsets applied by the superannuation fund.”
Therefore, I have assessed the gross amount per month from the 2^nd of each month on OINS. SS40 shows payments of more than 1 month at a time. In these cases I have divided the amount by the number of months it was for. As we do not know if the payments have ceased I have coded the nve amount $50.50 per month back from 2/12/13.
[11] Refer T-Documents T40/375.
On 1 June 2016, Centrelink raised a debt of $31,400.48 against Miss Andre, for alleged overpayments for the period 3 July 2009 to 1 December 2013. The full amount of the income benefits entitlement figures (before the offset was deducted) was treated by the authorised review officer (ARO) as income, and not the amount that was actually paid to Miss Andre. The Secretary contended that those overpayments constituted legally recoverable debts under s 1223(1) of the Act.
A Centrelink file record dated 1 June 2016, stated as follows:[12]
[Miss Andre] was not happy that we had taken so long to tell her that we had been assessing the incorrect amount. I explained to her that it takes a while for a DMP review to be done. I told her that we do not take the offset amount into account and that she contact AIA discuss this with them. I also told her that we had only reviewed up to 1/12/13 and she is still being OP’d. I asked if she had an updated figures that we could put up on the system and she said there would be some paperwork somewhere but she didn’t know where at the moment. I told her to find it and let Centrelink know the gross amount so she doesn’t continue to be OP’d
[12] Refer T-Documents T40/375 & 376.
Miss Andre sought review of this decision by a Centrelink ARO.
On 6 June 2014, Miss Andre provided to Centrelink the PAYG payment summary issued by AIA for the 2012/2013 financial year and bank statement.[13] On 7 June 2014, Miss Andre provided details of AIA payments from 30 October 2012 and on 29 June 2014, she provided details of AIA payments from 1 January 2014.[14]
[13] Refer paragraph [15] of the Secretary’s SFIC and T-Documents T11 and T12.
[14] Refer T-Documents T13 and T14.
ARO extended debt period and increased debt
The ARO affirmed the decision to raise the debt against Miss Andre and decided to extend the relevant period to 3 July 2009 to 1 May 2016. The debt was recalculated based on this extended period and increased to $46,335.64.
Miss Andre sought review of this decision by the Social Services and Child Support Division of the Administrative Appeals Tribunal (AAT1).
AAT1 set aside the ARO’s decision and required the debt to be recalculated
On 9 December 2016, the AAT1 set aside the decision under review and remitted it to Centrelink for recalculation of the debt. The AAT1 concluded that:
(a)the income protection payments received by Miss Andre were not compensation as defined by s 17(2) of the Act; and
(b)only the income protection payments made to Miss Andre (not the income benefit entitlement before the offset and tax were deducted), were ordinary income as only the former could be said to have been “earned, derived or received” by Miss Andre.
The AAT1 directed Centrelink to recalculate Miss Andre’s benefits based on Miss Andre’s ordinary income as comprising only the amount of income protection benefits actually paid to Miss Andre, and not the higher amount to which she was entitled, before offsets and tax were deducted.
On 20 January 2017, Centrelink recalculated the debt and the debt amount was reduced to $16,136.70.[15]
AIA adjusted income protection benefits payable to Miss Andre and funds were used to pay the debt in full
[15] Refer T-Documents T38/358.
AIA wrote to Miss Andre to advise that she would be paid an adjustment of $25,430.98 arising from the recalculation of benefits for the period 2 May 2010 to 1 December 2013. Miss Andre gave evidence at the AAT1 hearing and at the hearing before this Tribunal, that she received this adjustment payment into her nominated bank account and that she contacted Centrelink to request that this payment be put against her outstanding debt.
As the Centrelink debt was reduced to $16,136.70 following the AAT1 hearing, this means the debt of $16,136.70 has been paid in full by Miss Andre, pending the outcome of this application.
ISSUES
During the hearing of this application, Miss Andre did not challenge the way in which Centrelink had recalculated the overpayments following the AAT1 decision.
The Secretary contended at the hearing of this application, that it “did not wish to disturb” the findings made by the AAT1.
The primary issue in dispute was that Miss Andre considered that it was “unfair” that the debt had been raised against her in the circumstances of her case. In effect, Miss Andre was seeking that the debt be written off or waived. This will require the Tribunal to consider whether discretion to write off or waive a debt is enlivened under s 1236 or s 1237 of the Act and if so, whether the Tribunal should exercise its discretion to do so.
LEGISLATIVE FRAMEWORK
Section 1223(1) of the Act provides as follows:
(1) Subject to this section, if:
(a) a social security payment is made; and
(b) a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;
the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.
Section 1236 of the Act provides that the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise. Sections 1236(1A), (1B) and (1C) provide relevantly as follows:
(1A) The Secretary may decide to write off a debt under subsection (1) if, and only if:
(a) the debt is irrecoverable at law; or
(b) the debtor has no capacity to repay the debt…
(1B) For the purposes of paragraph (1A)(a), a debt is taken to be irrecoverable at law if, and only if:
(b) there is no proof of the debt capable of sustaining legal proceedings for its recovery; or …
(1C) For the purposes of paragraph (1A)(b), if a debt is recoverable by means of:
(a) deductions from the debtor's social security payment; or
(b) …;
the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship.
Section 1237 of the Act provides that the Secretary may waive the Commonwealth’s right to recover a debt, in part or in whole, only in the circumstances set out in specific provisions of the Act. These provisions include s 1237A on the grounds of administrative error and s 1237AAD on the grounds of special circumstances.
Section 1237A of the Act provides as follows:
(1) Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.
Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).
(1A) Subsection (1) only applies if:
(a) the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or
(b) if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;
whichever is the later.
Section 1237AAD of the Act provides as follows:
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.
Note 1: Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth.
MISS ANDRE’S CONTENTIONS
Debt related to the income protection benefits
Miss Andre contended that she was not aware that income protection payments were considered to be “income” and for this reason, she did not consider it necessary to notify Centrelink about them or any change to them.
In Miss Andre’s written submissions lodged with the Tribunal on 17 March 2017, she stated:
I in good faith thought that the [income protection] paid to me was due to my inability to work, not as an “income” but as a support for my daily living at that time from 2 May 2010 since my total and permanent disability and couldn’t return to work.
…
I probably thought at that time in 2010 I didn’t have to do so or probably coz the IP Insurance Company itself never told me to do so or I might have thought that it was not an “Earned Income”, not really knowing the law and the classification of it as per the Social Security Act for sure… and as Centrelink themselves have not assessed the [income protection] correctly and didn’t advise me correctly how to report it since that day I had no clue how to report it; Therefore, I thought it was all ok and I never thought I had to report each time it changed as I never had to report for having my DSP, it all goes automatic and no report of anything!
Miss Andre also contended as follows:
Centrelink was aware of my Income Protection from AIA from 18 Aug 2011 (only one yr. after I started receiving my [income protection]) … and referred it to the Centrelink Compensation Team for compensation clearance on 18 August 2011! Why didn’t they tell me at that time to report it? Why they didn’t call me and ask me to do so back then? Only on 20 January 2012 Centrelink recorded my income as $50.50 monthly as per AIA statement dated 21/11/2011 who notified I was receiving this since 2 May 2010 and ongoingly!
Miss Andre contended that all of the debt relating to the period after 24 November 2011 should be waived. Miss Andre said that Centrelink coded her income protection on its system as $50.50, even though it was aware that AIA was deducting the Centrelink offset amount. Miss Andre contended that she was not told to report her income using the gross amount, or told to report when the amount was changed. Miss Andre contended that she had always “genuinely communicated and cooperated to Centrelink about all what was happening” and “sent Centrelink all relevant documents as AIA income protection letters and also bank account proof of what [she] was receiving net, Centrelink still maintained [she] was receiving GROSS AMOUNT!!...”.[16]
[16] Refer T-Documents T22/244.

Miss Andre contended that Centrelink wrote to her to advise that the income protection was coded in January 2012 but wrongly assessed, and she was not advised of the correct way to declare that income. Miss Andre queried how she was expected to know if nothing had clearly been communicated to her and she had not been advised to declare this income.
Miss Andre contended that if she knew the the offset was illegal, she would have reported the gross amount, but that it had not been mentioned to her when AIA first raised this with Centrelink on 24 November 2012. Miss Andre contended that this did not amount to her “not acting in good faith”.
Miss Andre contended that she did not knowingly make a false statement (within the meaning of s 1237AAD of the Act) when she said she was receiving $50.50 per month of income protection. This was because AIA was reporting such amount as PAYG paid to her and Centrelink itself accounted for the $50.50 without questioning it at the time of having the statement from AIA specifying the offset. Miss Andre said she only ever received the net amount, not the gross amount from AIA.
Debt related to declared earnings from Woolworths and Programmed Recruitment
Miss Andre contended that the tax return estimate was viewed by Centrelink and stamped 4 August 2010 and this demonstrated that Centrelink was aware of the amount of taxable income received by Woolworths and Programmed Recruitment. Miss Andre contended that Centrelink should have raised any discrepancy or issue with respect to the amount of income with her at that time so it could have been rectified (rather than wait three years later to start the review and seven years later (although the Tribunal notes it was six years) to raise the debt).[17]
[17] Refer T-Documents T22/244. Centrelink wrote to Miss Andre on 15 October 2013 (three years later) to inform Miss Andre that she had declared less income than had been received.
General contentions
Miss Andre contended as follows:
I always to my best ability notify Centrelink of any changes happening and genuinely all the time like the
-    TPD Superannuation Lumpsum received where I requested interview on 4/6/2012 with Financial Information Service booked on 5/6/2012 face to face where all potential TPD were mentioned and where FIS told me that my payment “would unlikely not be an impact on my rate”.[18]
-    On 9/7/2012 called Centrelink in regards to update in change of assets and let them know the amount of money $86,864 at the bank due to release of Super
-    I contacted Centrelink again on 9/7/2012 regarding an update in regards to my DSP and to again let them know that the FIS stated that my DSP payments will not be affected and requested a call back.
-    …
[18] Refer Centrelink record dated 4 June 2012 confirming contact received from Miss Andre – T-Documents T40/365 & 366
In letters dated 1, 5 and 6 June 2016, Miss Andre said she told Centrelink that she reported the correct amount of income received from AIA, Woolworths and Programmed Recruitment. Miss Andre said that her 2009/2010 tax return showed the correct amount.
Miss Andre said that during the period 20 January 2009 to 27 February 2010 she had experienced a very difficult period in her life. This was because she was “financially broke”, a single mother raising two children, homeless and ill. She said she was in receipt of a special benefit at that time on account of severe financial hardship.
Miss Andre also contended that the Tribunal should take into account her financial situation and also her state of poor health and disability. Full details of Miss Andre’s various health concerns and disabilities were provided in her written submissions and other medical information available to the Tribunal.
THE SECRETARY’S CONTENTIONS
The Secretary contended that Miss Andre has under-declared her earnings from her past employment resulting in Centrelink making overpayments to her in Newstart Allowance for the period 5 July 2009 to 25 July 2010 (to which she was not entitled).[19]
[19] Refer paragraph [44] of the Secretary’s SFIC.
The Secretary contended that Miss Andre received information notices from Centrelink under s 68(2) of the Social Security (Administration) Act 1999 (Administration Act) during the debt period. These notices required her to check the information provided, which included income information, and to contact Centrelink if it was not correct. The Secretary sought to rely on s 100 of the Administration Act which provides for an automatic rate reduction if a recipient does not comply with a s 68(2) notice on the day that the event or change of circumstances occurred.
It was contended that on 13 July 2010, Miss Andre received her first income protection payment of $974.76 for the period 2 May 2010 to 1 July 2010. The Secretary contended that there was no evidence that Miss Andre notified Centrelink of the income protection payments until November 2011.
From 20 January 2012, the income protection payments were coded as ongoing monthly payments of $50.50 per month.
The Secretary contended that on 9 February 2012, it issued an information notice to Miss Andre for the period 18 November 2011 to 9 February 2012.[20] This statement advised Miss Andre as follows:
Please check the information on this statement carefully. If the details on this statement are correct there is no need for you to contact Centrelink. If your circumstances have changed please contact us within 14 days. This request is an information notice given to you under social security law…
OTHER PENSION AND PAYMENT DETAILS
Other pension/annuity payments
Provider name Ref. no. Gross Income Assessed Income Current Account Balance
AIA Australia X0000 $50 pm $50 pm
[20] Refer T-Documents T41/533.
On 3 May 2012, Centrelink issued a further information notice to Miss Andre for the period 18 November 2011 to 9 February 2012, showing the same gross and assessed income figures as referred to in the previous paragraph.[21]
[21] Refer T-Documents T41/533.
As from 2 December 2012, the Secretary contends that the AIA information showed that the monthly amount was $66.90 and that Miss Andre did not notify the Department within the required 14 days. Specifically, the Secretary contended that Miss Andre did not comply with the information notice given to her by Centrelink dated 3 May 2012.
CONSIDERATION
Is discretion under s 1237 to waive the debt enlivened?
Do the circumstances in s 1237A apply, namely, was any part of the debt attributable solely to an administrative error made by the Commonwealth and the debtor received the payment in good faith?
The notation at the end of s 1237A of the Act is relevant in this case. It clarifies that s 1237A does not apply where a part of a debt was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).
Debt relating to earnings from past employers
In relation to the debt that arose as a result of only some of the wages that Miss Andre had earned from her employment at Woolworths and Programmed Recruitment having been declared initially, it could not be said that this debt was attributable solely to an administrative error made by the Commonwealth. At no stage, did Miss Andre assert that the information later provided by those two employers to Centrelink confirming her wages was incorrect. Instead, Miss Andre sought to explain that she was very stressed at that time on account of the challenges she was facing on a personal level, which was why the correct figures were not provided to Centrelink initially.
The Tribunal will consider those personal matters further below. For present purposes, the Tribunal considers that if Miss Andre had declared the correct earnings (i.e. the full amount of the wages received by her from Woolworths and Programmed Recruitment) to Centrelink initially, the rate of her social security benefits would have been calculated and paid at the correct rate. If this took place, this part of the debt would not have arisen. This debt did not increase in size because it was raised against Miss Andre only after a delay during which Centrelink investigated and obtained the correct income figures directly from Woolworths and Programmed Recruitment.
The onerous test that applies for the Tribunal’s discretion to be enlivened under this provision is that the debt is solely attributable to an administrative error by the Commonwealth. It has not been met in this case because the Tribunal considers that the debt was caused due to the incorrect information initially provided by Miss Andre. Accordingly, the Tribunal concludes that it does not have discretion to waive this part of the debt under s 1237A of the Act.
Debt relating to income protection payments
In relation to the part of the debt arising from the income protection payments, it arose because initially Miss Andre did not declare to Centrelink that she had received payments from AIA for income protection benefits. Miss Andre said this was so because she did not know that such payments would be regarded as “income” and would be relevant to the calculation of the rate of her social security payments. Miss Andre said that no person from Centrelink or AIA had told her to report those amounts to Centrelink.
The omission by Miss Andre to declare the payments from AIA to Centrelink, when they were first made, occurred due to a misunderstanding on the part of Miss Andre that they were not income and would not be required by Centrelink. This is understandable. It is a complex system and there are many different types of payments that might be classified, or not, as ordinary income and used in the calculation of the rate of social security payments. However, the failure to inform Centrelink about those payments initially was an error on the part of Miss Andre that lead to her receiving DSP payments in excess of her entitlements. This forms the basis for part of the debt that has now been raised against her.
The Tribunal does not accept that Miss Andre did not have an obligation to report that income because she was not told to do so by Centrelink or AIA. Under the scheme, neither of those entities carried the obligation to do so. That obligation rested with Miss Andre. It related to information within Miss Andre’s knowledge. Miss Andre was provided with information notices on a regular basis indicating what information was recorded by Centrelink on its systems about her income. Miss Andre was repeatedly requested by those notices to contact Centrelink if the income figures showing in those notices were incorrect.
From the point in time when the income from AIA was shown as $50.50 per month, to when the income protection payments actually received by Miss Andre were subsequently changed, Miss Andre should have contacted Centrelink to advise them of those changes. Miss Andre sought to explain this by saying that she did not do so, because she did not understand how to report it (which figures to provide – i.e. gross or net).
The Tribunal does not regard this as an acceptable explanation. Even if Miss Andre was unsure of which figures to provide, i.e. gross or net, that did not prevent Miss Andre from providing Centrelink with the AIA letters showing all details of the income benefit entitlements, the offsets and the payments actually made to her. Miss Andre could have left it to Centrelink to decide how to treat that information. Instead, Miss Andre did not share any of that information with Centrelink until an investigation was commenced and the issues were addressed with Miss Andre as part of a Centrelink review process.
The Tribunal does not consider that Miss Andre intentionally concealed information from Centrelink because the Tribunal accepts her evidence that she did not fully understand how the system operated. The Tribunal also acknowledges that her previous dealings with Centrelink demonstrated that she has been honest and transparent. This is commendable.
However, the Tribunal is not satisfied that the part of the debt referable to the income protection payments was solely attributable to an administrative error by the Commonwealth. The Tribunal is satisfied that this part of the debt arose due to an oversight by Miss Andre to provide full details of the income protection payments from AIA when they were first made to her, or any subsequent changes in those payments, which led to her being paid a higher rate of social security benefits than she was entitled to.
The AAT1 has since corrected the miscalculation by Centrelink using the income benefits entitlement figures; instead of the much lower amounts that Miss Andre was actually paid. As for the part of the debt that arose from using the correct figures for the payment actually received by Miss Andre from AIA, the Tribunal concludes that the discretion under s 1237A of the Act for the Tribunal to waive this part of the debt is not enlivened.
Do the circumstances in s 1237ADD apply, including a consideration of whether there are special circumstances (other than financial hardship alone) that make it desirable to waive the debt?
For circumstances to be considered special circumstances for the purpose of s 1237AAD of the Act, they must be unusual, uncommon or exceptional[22] and the hardship or unfairness should be sufficient to justify departure from the general rule.[23]
[22] Refer Re Beadle and Director-General of Social Security (1984) 6 ALD 1.
[23] Per Branson J in Ryde v Secretary, Department of Family and Community Services [2005] FCA 866.
The Secretary also highlighted to the Tribunal the observations of Deputy President Forgie in Re Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114 as follows:
… “special circumstances” are not merely directed to the person’s own circumstances. Rather, they are directed to those that are “special circumstances…that make it desirable to waive”. That necessarily requires a consideration of the person’s individual circumstances but also a consideration of the general administration of the social security system. Waiver of the debt would mean that Mr Davy would have had the benefit of part of his DSP in circumstances in which he was not entitled to it… He has had the benefit of the money and there is no injustice in requiring him to repay the money of which he has had the benefit but not the entitlement… The system of administration of the Social Security Act does not visit any injustice for many if not all social security recipients but it did not lead to any injustice or unfairness on Mr Davy that is not visited, or potentially visited, upon all other recipients of social security payments under the Act. Therefore, I am not satisfied that there are special circumstances that make it desirable to waive the debt under s 1237AAD of the Act…
The Secretary contended that there is no evidence to suggest that Miss Andre’s circumstances were such that they can be considered “special” to the extent that a waiver of part or all of the debt under s 1237AAD was warranted.[24]
[24] Refer paragraph [56] of the Secretary’s SFIC.
From Miss Andre’s perspective, she considers the debt that arose because the full amount of income from her earnings at Woolworths and Programmed Recruitment was not taken into account initially, should have been raised a lot sooner than it was. Miss Andre stressed to the Tribunal that Centrelink was aware of the discrepancy in the income figures at the time Miss Andre provided to Centrelink her 2009/2010 tax return in August 2010 and that it should not have taken such a long time, six years, before it raised a debt to her.
Similarly, Miss Andre contended that the debt arising from the AIA earnings should have been raised against her a lot earlier than it was. Miss Andre said that Centrelink was first made aware that she had received income from AIA in August 2011.
The Tribunal notes that it took quite some time, i.e. years, for Centrelink to obtain from AIA and Miss Andre the full details, including the adjustments made to the income protection benefits paid to Miss Andre over the years, to allow it to complete its review and undertake the recalculations. The Tribunal also notes the error made by Centrelink when it first raised the debt against Miss Andre on 1 June 2016, applying the higher amount of the income benefit entitlements, before the offset was applied, instead of the actual income protection benefits paid to Miss Andre. However, as a result of the AAT1 decision, this Tribunal notes that this error has now been corrected and the debt raised against Miss Andre has been significantly reduced from $46,335.64 to $16,136.70.
Despite the significant delay by Centrelink in raising a debt to take into account the balance of earnings from past employers and the additional earnings arising from the increases over the years in the income protection benefits actually paid to Miss Andre, the Tribunal is unable to identify any detriment to Miss Andre caused by this delay. It did not result in the size of the debt being any larger. It did not result in any recovery fees being charged to Miss Andre. Centrelink made a decision not to apply recovery fees as it was considered that Miss Andre was “not reckless” with respect to the provision of income information, according to Centrelink’s file notes.
Further, Miss Andre was aware in August 2010, when she provided Centrelink with her 2009/2010 tax return, that there was a discrepancy in the income provided in the tax return and the income she had previously declared to Centrelink. The Tribunal is satisfied that Miss Andre should have been aware in August 2010 that at some point in the future, Centrelink would, following its review and further inquiries, reconcile the social security payments made to Miss Andre in due course, if they exceeded the amounts to which she was entitled.
Miss Andre also implored the Tribunal to take into account her financial circumstances, her state of ill health and her various disabilities.
The Tribunal first deals with Miss Andre’s state of ill health and various disabilities. While it is most unfortunate that Miss Andre has had to endure her medical conditions and disabilities, in many other cases involving the recovery of debts from DSP recipients, the persons seeking a waiver are in similar situations to Miss Andre in terms of managing conditions causing poor health and functional impairment. This alone does not satisfy this Tribunal that there were special circumstances, namely, that her situation was uncommon or unusual, warranting the waiver of the debt found by the AAT1 to be owed by Miss Andre.
Miss Andre has also contended that her financial situation should be taken into account. The Tribunal acknowledges that Miss Andre is likely to face financial challenges in seeking to support herself and her dependents on the social security benefits that she receives, noting her day-to-day expenditure as articulated in detail in the evidence before this Tribunal. However, the debt in question in this application has already been paid in full by Miss Andre. These matters are not relevant as considerations of Miss Andre’s inability to repay the debt do not arise.
Taking all of the above matters into account, the Tribunal is not satisfied that there were special circumstances in this application as required by s1237AAD(b) of the Act. This was a mandatory requirement for discretion under s 1237AAD of the Act to be enlivened. As the Tribunal has found that this mandatory requirement was not met in Miss Andre’s application, it is not necessary for the Tribunal to consider whether the other two mandatory requirements under s 1237AAD(a) and (c) of the Act are met.
Is discretion under s 1236 to write off the debt enlivened?
Discretion to write off the debt under s 1236 of the Act will only be enlivened where the debt is irrecoverable at law or the debtor has no capacity to repay the debt. However, by reference to the matters referred to in paragraphs [27] and [28], the debt has already been repaid in full by Miss Andre, so neither of those circumstances arises.

Accordingly, the Tribunal concludes that discretion under s 1236 of the Act to write off the debt is not enlivened.
CONCLUSION
The Tribunal concludes that discretion to either write off or waive the debt that Centrelink has raised against Miss Andre following the AAT1 decision, under s 1236 or s 1237 of the Act is not enlivened by the circumstances of this application. The debt appropriately reflects a necessary adjustment to Miss Andre’s social security payments so that she received benefits based on a calculation that factored into it the correct amount of earnings from past employers and from AIA arising from income protection payments actually paid to Miss Andre. It is unfortunate that there was a long delay in the raising of this debt to Miss Andre; however, the Tribunal is satisfied that this did not cause any additional detriment to Miss Andre in monetary terms.
Accordingly, this Tribunal affirms the AAT1 decision made on 9 December 2016. The Tribunal concludes that the debt of $16,136.70 as recalculated by Centrelink in accordance with the AAT1 decision should not be written off or waived either in whole or in part, as the discretion of the Tribunal to do so was not enlivened under the Act for the reasons set out in this decision.

I certify that the preceding 83 (eighty -three) paragraphs are a true copy of the reasons for the decision herein of Member K. Parker

............................[sgd]............................................
Associate
Dated: 19 April 2018

Date(s) of hearing: 1 September 2017

Applicant: Self-represented, by telephone.

Solicitors for the Respondent: Alisa Bramley, Senior Government Lawyer, Department of Human Services

[2018] AATA 941

19 April 2018

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Jurisdiction

Procedural Fairness

Statutory Construction

Remedies

Date(s) of hearing:	1 September 2017
Applicant:	Self-represented, by telephone.
Solicitors for the Respondent:	Alisa Bramley, Senior Government Lawyer, Department of Human Services