Barrett and Secretary, Department of Social Services (Social security) - [2025] ARTA 1290

Barrett and Secretary, Department of Social Services (Social security) [2025] ARTA 1290 (18 July 2025)

Applicant/s: Ms Barrett

Respondent: Secretary, Department of Social Services

Tribunal Number: 2025/S193827
Tribunal: Ms O Sarrinikolaou, Member
Place:Melbourne
Date:18 July 2025

Decision:The Tribunal sets aside the decision under review and remits the matter to Centrelink to reconsider with the following orders:
1.Ms Barrett received FTB totalling $13,766.68 in the 2021/22 financial year, which she was not entitled to receive in accordance with subsection 28(2) of the Family Assistance Administration Act, and this is a debt due to the Commonwealth under section 71 of the Family Assistance Administration Act.
2.The outstanding balance of the FTB debt for the 2021/22 financial year as at 15 April 2025, $6,676.33, is waived in accordance with section 101 of the Family Assistance Administration Act.
3.Ms Barrett’s entitlements to FTB for the 2022/23 financial year be recalculated using her actual adjusted taxable income, $21,092, and [Mr A’s] most recent indexed estimated or indexed actual income, being $40,433.71.
4.If a debt exists following the recalculation for the 2022/23 financial year, it is a debt due to the Commonwealth under section 71 of the Family Assistance Administration Act and is recoverable.

CATCHWORDS

SOCIAL SECURITY – family tax benefit debts – former partner’s tax returns not lodged – non-lodger debt – relationship ceased – part debt raised was written off – special circumstances for waiver – significant portion of debts have been repaid – medical and mental health issues – decision under review set aside and remitted

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted from this decision and replaced with generic information pursuant to subsections 161(1B) of the A New Tax System (Family Assistance) (Administration) Act 1999.

Statement of Reasons

BACKGROUND

Ms Barrett has applied to the Tribunal for review of decisions made by Services Australia (Centrelink) to raise and recover debts for family tax benefit (FTB) paid to her in the 2021/22 and 2022/23 financial years. The debts were raised because her former partner did not lodge his tax returns for the two relevant financial years.
On 31 August 2023, a Centrelink employee decided that Ms Barrett was overpaid FTB in the amount of $13,766.68 in the 2021/22 financial year (debt number [1]).

On 26 August 2023, a Centrelink employee decided that Ms Barrett was overpaid FTB in the 2022/23 financial year in the amount of $15,357.12. This was amended on 8 July 2024 and the debt was reduced to $15,291.16 (debt number [2]).

Ms Barrett requested internal review of the decisions and on 27 July 2024 an authorised review officer affirmed the decisions.
On 24 March 2025, Ms Barrett lodged an application for independent review with the Tribunal.
The Tribunal hearing proceeded on 25 June 2025 via Microsoft Teams audio and Ms Barrett gave evidence on affirmation. The Tribunal had before it the documents provided by Centrelink (folios 1 to 314) and documents provided by Ms Barrett prior to and after the hearing (A1 to A71).

ISSUES

The statutory provisions relevant to this review are contained in the A New Tax System (Family Assistance) Act 1999 (the Family Assistance Act) and the A New Tax System (Family Assistance) (Administration) Act 1999 (the Family Assistance Administration Act).
The legal issues that arise in this application are:
a) Does Ms Barrett owe debts to the Commonwealth for overpayment of FTB in the 2021/22 and 2022/23 financial years? And, if so,
b) Is there any reason the debts should not be recovered by Centrelink?

CONSIDERATION

Does Ms Barrett owe debts to the Commonwealth?

The eligibility requirements for the payment of FTB are set out in section 21 of the Family Assistance Act and require that an individual has an FTB child or regular care child in their care, in addition to meeting residency requirements and having a rate of FTB that is greater than nil.
Section 58 of the Family Assistance Act provides that the rate of FTB is to be calculated in accordance with the Rate Calculator in Schedule 1. Schedule 1 to the Family Assistance Act then requires that the annual rate of FTB be worked out having regard, in relevant part, to an individual’s adjusted taxable income. Where an individual is partnered, Schedule 3 to the Family Assistance Act provides that their partner’s income is also relevant to their annual rate of FTB.
Section 20 of the Family Assistance Administration Act states that where an individual’s rate of FTB is required to be determined and information about their adjusted taxable income is not available (for example, because this cannot be known until after the end of the relevant income year), the individual can provide an estimate to Centrelink. Where the estimate is reasonable, Centrelink can determine the individual’s rate of FTB based on the estimate provided. The individual’s FTB entitlements are reconciled when their actual combined adjusted taxable income is known.
Section 20C of the Family Assistance Administration Act permits the use of a partner’s most recent indexed estimated or indexed actual income stated in a notice given to the individual or the partner with a start date that has arrived or passed.
Subsection 28(1) and (2) of the Family Assistance Administration Act provide that if the individual is receiving FTB by instalments and the individual or their partner fail to lodge their tax return within the prescribed time limits, then the individual is taken to have never been entitled to FTB which means that all the FTB paid during the relevant financial year must be repaid as a non-lodger debt. Subsection 28(4) and (5) provide that if the Secretary varies a determination under subsection 28(2) and the individual ceases to be a member of a couple after the determination was made, the Secretary must again vary the determination so the individual is entitled to be paid the recalculated amount if the following conditions are satisfied:
(a)the individual and their partner cease to be a member of a couple during the further period allowed under Subdivision D of Division 1 of Part 3 for the partner to lodge an income tax return;
(b)the individual and the former partner are no longer members of the same couple;
(c)the individual was required to lodge a tax return and has done so before the end of the first income year after the cancellation year or such further period that the Secretary has allowed, and the individual’s income has been assessed under the Income Tax Assessment Act 1936;
(d)the former partner was required to lodge a tax return and has not done so by the later of either the time they ceased to be members of the same couple and the time when the individual’s income is assessed; and
(e)the Secretary is satisfied that the individual was eligible for an amount of FTB for the cancellation days.
Section 28 is silent on the process used to calculate an individual’s FTB entitlements in the absence of an assessment of the former partner’s income under the Income Tax Assessment Act 1936.
Subdivision D of Division 1 of Part 3 of the Family Assistance Administration Act sets out the reconciliation conditions and when they will be satisfied.
Section 32C provides that if the individual is required to, they lodge their tax return before the end of the first income year after the relevant income year or any further period allowed by the Secretary. Section 32D provides that if required to, the partner must lodge their tax return before the end of the first income year after the relevant year or such further time allowed by the Secretary. Section 32E provides that if the individual was a member of a couple and ceases to be a member of a couple during the income year following the relevant income year, the reconciliation will occur when the former partner lodged their tax return or at the end of the first income year after the relevant income year. Section 32F provides that if the couple separate during the second income year after the relevant income, the reconciliation occurs when the former partner’s income is assessed or when the individual ceased to be a member of a couple.
There is no dispute that Ms Barrett satisfied the eligibility requirements for FTB during the 2021/22 and 2022/23 financial years. Ms Barrett agreed that she was partnered from 30 October 2021 to 3 November 2023 and advised Centrelink of the separation on 25 January 2024.[1] In the absence of dispute, the Tribunal is satisfied that Ms Barrett’s combined adjusted taxable income is necessary to calculate her FTB entitlements for the relevant financial years.
[1] Hearing papers, page 176.
On 31 August 2023, Centrelink decided to raise a non-lodger debt for the 2021/22 financial year under section 28 because neither Ms Barrett nor her partner, [Mr A], had lodged their tax returns by 30 June 2023. Therefore, the debt was raised for the entire amount she had received, $13,766.68.
On 8 July 2024, Centrelink reconciled Ms Barrett’s FTB entitlements for the 2022/23 financial year and decided to raise a debt for $15,291.16. The debt for the 2022/23 financial year is not described as a non-lodger debt in Centrelink’s records.
Ms Barrett submitted that she cannot compel her former partner to lodge his tax returns, and she should not be a liable for a debt that arose due to the inactions of a third party which are out of her control. Her former partner, [Mr A], provided income statements from his online myGov account for the relevant financial years showing gross earnings for the 2021/22 financial year of $28,077.40 and for the 2022/23 financial year of $40,433,71.[2] Ms Barrett’s adjusted taxable income was $40,599 for the 2021/22 financial year and $21,092 for the 2022/23 financial year.[3] Ms Barrett submitted that their combined income was well below the income limit for FTB and the debts should be recalculated. The Tribunal will consider each debt.

[2] A4 to A15.

[3] Hearing papers, page 98.

2021/22 financial year - debt number [1]

Ms Barrett was receiving FTB by instalments in the 2021/22 financial year and she was partnered. Ms Barrett said that both she and her partner were working and therefore, required to lodge tax returns.
The Tribunal first considered whether section 28 of the Family Assistance Act applies. There is no dispute that Ms Barrett was receiving FTB by instalments under section 16 and was entitled to be paid FTB in the 2021/22 financial year. She and her partner were required to lodge their tax return for the 2021/22 financial year by 30 June 2023. Ms Barrett lodged her tax return on 25 July 2023. [Mr A] has not yet lodged his tax return. Two years have passed since the beginning of the relevant income year, being 2021/22. Therefore, subsection 28(1) is satisfied. It follows, that a determination must be made under subsection 28(2) that Ms Barrett is not and was never entitled to the FTB she received during the 2021/22 financial year.
Ms Barrett subsequently lodged her tax return. However, [Mr A] did not. Therefore, subsection 28(3) does not apply. Subsection 28(4) of the Family Assistance Administration Act deals with the situation where a couple separate after a determination is made under subsection 28(2). Subsection 28(4) applies when the separation occurs during the time allowed for the former partner to lodge their tax return and the individual lodged their tax return within the prescribed time. Ms Barrett and [Mr A] were required to lodge their tax return before 30 June 2023, and they did not. There was no contention or evidence to support a finding that either Ms Barrett or [Mr A] were prevented from lodging their tax returns within the prescribed time limit. They separated in November 2023 which is after the period they were required to lodge their tax return. Therefore, the provisions in subsection 28(4) are not satisfied and the determination cannot be varied under subsection 28(4).
The Tribunal then considered whether section 32F of the Family Assistance Administration Act applies. The provision allows for reconciliation of the individual’s entitlements if the couple separate after the end of the next income year, that is after the year the couple were required to lodge their tax returns. However, the provision only applies if the Secretary allowed additional time for the partner to lodge their tax return. As this did not occur, section 32F does not apply to Ms Barrett.
There is no other provision in the Family Assistance Act or the Family Assistance Administration Act that permits reconciliation of the 2021/22 non-lodger debt. The Tribunal considered the Family Assistance Guide (the Guide), which contains governmental guidelines and policy as to how the legislation is to be applied. The Tribunal acknowledges that, whilst it may be guided by policy, it is not bound to follow it: Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634. In the case of G v Minister for Immigration and Border Protection [2018] FCA 1229, Mortimer J observed at [204] that it is clear from earlier authorities that, in “the absence of any statutory indication to the contrary, any lawful executive policy enacted to guide the exercise of a statutory power is a relevant factor for the Tribunal to take into account in performing its review task.”
Topic 6.4.4.20 of the Guide deals with the treatment of non-lodger debts when a couple separates after the lodgement year which is the year after the relevant financial year when tax returns must be lodged and provides:
Generally, non-lodger debts arise if income tax returns for the individual and/or their partner are not lodged by the end of the lodgement year. If income tax returns for the individual and/or their partner are not lodged by the end of the lodgement year, neither the supplement nor any income top-up can be paid.
If separation occurs after the lodgement year, any non-lodger debt raised against the individual will be written off if it is only the ex-partner's income tax return that has not been lodged. This will result in the suspension of any non-lodger debt recovery, from the date of separation.
Interim reconciliation is not appropriate because neither the supplement nor a top-up can be paid after the lodgement year. If the ex-partner lodges an income tax return for the relevant income year, the non-lodger debt is set aside (rather than simply being written off).
Reconciliation then occurs using the individual's and their ex-partner's actual ATI for the relevant year. This may only result in a debt or a nil adjustment. No top-up or supplement can be paid.
Centrelink’s records show that the debt raised for the 2021/22 financial year has been written off from 15 April 2024 to 15 April 2030, which means that any recovery action is suspended.[4] Having regard to the legislative provisions and the Guide, the Tribunal is satisfied that Ms Barrett’s FTB entitlements cannot be reconciled until [Mr A] lodges his tax return and his income is assessed. To satisfy the reconciliation conditions, subdivision D of Part 3 of the Family Assistance Administration Act specifically requires an income assessment under the Income Tax Assessment Act 1936 and there are no exceptions or discretion for the Tribunal to disregard that requirement. In the absence of such an assessment, the Tribunal is not satisfied that the income statements provided to Centrelink and the Tribunal are an accurate and complete record of Ms Barrett’s former partner’s adjusted taxable income as required.
[4] Hearing papers, page 26.
The Tribunal finds that in the 2021/22 financial year Ms Barrett received FTB totalling $13,766.68, which she was not entitled to receive in accordance with subsection 28(2) of the Family Assistance Administration Act and this is a debt due to the Commonwealth under section 71 of the Family Assistance Administration Act. If [Mr A] lodges his tax return, a final reconciliation will take place at that time.

2022/23 financial year (debt number [2])

Ms Barrett was receiving FTB by instalments in the 2022/23 financial year and she was a member of a couple with Mr [A]. Therefore, her actual combined income is required to reconcile her FTB entitlements for the 2022/23 financial year. Centrelink initially raised a debt on 26 August 2023 and reduced the debt on 8 July 2024 after a reconciliation was completed. It is unclear from Centrelink’s records whether Centrelink raised the debt for the 2022/23 financial year under subsection 28(2) of the Family Assistance Administration Act.
The Tribunal first considered whether section 28 applies. There is no dispute that Ms Barrett was receiving FTB by instalments under section 16 and was entitled to be paid FTB in the 2022/23 financial year. She and [Mr A] were required to lodge their tax returns by 30 June 2024. Ms Barrett lodged her tax return on 26 July 2023. [Mr A’s] tax return has not been lodged. Two years have now passed since the beginning of the relevant income year, being 2022/23. However, when Centrelink raised the debt on 26 August 2023, the two years since the beginning of the relevant income year had not passed as required under paragraph 28(1)(b) of the Family Assistance Administration Act. The required time had passed when the debt was reconciled on 8 July 2024. The Tribunal notes that debt recovery commenced on 3 October 2023 and if this recovery was for a non-lodger debt under section 28, in the Tribunal’s view this was incorrect.
The Tribunal is satisfied that on 8 July 2024, section 28 applied because [Mr A] had not yet lodged his tax return. It follows that the determination made under section 16 must be varied and a non-lodger debt raised on 8 July 2024 under subsection 28(2) of the Family Assistance Administration Act.
Subsection 28(3) does not apply because only Ms Barrett lodged her tax return and [Mr A’s] remained outstanding.
Subsection 28(4) applies if the couple separate after the determination is made under subsection 28(2) of the Family Assistance Administration Act, provided that certain conditions are satisfied. Ms Barrett gave evidence that she and [Mr A] separated on 3 November 2023. Centrelink’s records show that she advised Centrelink of the separation on 25 January 2024. As the section 16 determination should not have been varied under subsection 28(2) before 1 July 2024, subsection 28(4) does not apply because Ms Barrett separated before the determination can lawfully be varied under subsection 28(2).
To determine when and how Ms Barrett’s FTB entitlements should be reconciled, the Tribunal considered section 32E which applies when an individual ceases to be a member of a couple during the first income year after the relevant income year. Subsection 32E(2) provides that the relevant reconciliation time is either the time the former partner’s income is assessed under the Income Tax Assessment Act 1936 or the end of the first year after the relevant income year. As [Mr A] has not yet lodged his tax return for the 2022/23 income year, the reconciliation of Ms Barrett entitlements should occur at the end of the 2023/24 financial year. Centrelink’s records indicate that reconciliation under subsection 32E(2) may have occurred on 8 July 2024. It is not clear what information was used to complete the reconciliation.
The Family Assistance Act and the Family Assistance Administration Act do not make provision for other information to be used to reconcile an individual’s entitlements following separation after the relevant financial year and in the absence of the former partner’s income assessed by the Commissioner of Taxation. Topic 6.4.4.20 of the Guide provides the following instructions:
If an individual separates from their partner during the lodgement year and their ex-partner is required to lodge an income tax return for the relevant income year, but has not lodged that income tax return by the end of the lodgement year, interim reconciliation will occur after the end of the lodgement year (from 1 July) as long as the individual's own actual ATI is known.
The income used in the interim reconciliation is the individual's actual ATI and the ex-partner's last known (most recent) estimate, indexed estimate or indexed actual income.
FTB supplements may be paid following the interim reconciliation for the entitlement year. The interim reconciliation process may result in a top-up, an overpayment or nil adjustment. Unlike situations where separation occurs in the year of entitlement, an overpayment debt is possible because clause 3A does not apply to separations outside the relevant income year.
A final reconciliation using the ex-partner's actual income will occur when the ex-partner eventually lodges their tax return for the relevant income year.

The Guide allows for an interim reconciliation pending the lodgement of a partner’s tax return. Although the Tribunal is unable to find the legislative basis for an interim reconciliation as referred to in the Guide, the Tribunal is satisfied that such an approach is not inconsistent with the provisions of the Family Assistance Act or the Family Assistance Administration Act. In the absence of a compelling reason to disregard the Guide, the Tribunal is satisfied that it should be applied to reconcile Ms Barrett’s entitlements for the 2022/23 financial year.
The Tribunal will remit the matter to Centrelink to recalculate Ms Barrett’s entitlements to FTB for the 2022/23 financial year on the basis of her actual adjusted taxable income, $21,092, and [Mr A’s] most recent indexed estimated or indexed actual income being $40,433.71, which was his gross earnings from employment with [Employer 1] during the relevant financial year reported to the Australian Taxation Office.[5] If a debt exists following the recalculation, it is a debt due to the Commonwealth under section 71 of the Family Assistance Administration Act. The Tribunal notes, for completeness that if [Mr A] lodges his tax return, a final reconciliation of Ms Barrett’s entitlements will take place.
[5] A11
The Tribunal has found that an FTB debt exists for the 2021/22 financial year. The Tribunal notes that upon reconciliation by Centrelink of Ms Barrett’s entitlements for the 2022/23 financial year, a debt, albeit small may be raised. The Tribunal will consider whether the non-recovery provisions apply to both debts.

Is there any reason the debts should not be recovered by Centrelink?

The Family Assistance Administration Act allows a debt to be waived or written off in certain circumstances. Waiving recovery of the debt means that although the debt exists, a decision is made to forgo the legal right to recover the monies. This means that no recovery action is possible, and the debt cannot be pursued. Write off means that, while the debt is recoverable, recovery of the debt is delayed for a period.
The Tribunal notes that the general expectation is that individuals who have received social security payments to which they are not entitled should repay the amounts received unless the repayment is unjust, unreasonable or inappropriate in the circumstances of a specific case (Skinner and Secretary, Department of Social Services [2015] AATA 569 at [48]).

Waiver – Administrative error

Section 97 of the Family Assistance Administration Act provides for waiver of a debt where the debt was caused by sole administrative error on the part of the Commonwealth, the debtor has received the payments in good faith and the person would suffer severe financial hardship if the debt were not waived.
In circumstances where the FTB debts arose because Ms Barrett’s former partner did not lodge his tax returns within the prescribed time limits, the Tribunal finds that the debts cannot be waived under section 97 of the Family Assistance Administration Act.

Waiver – Special circumstances

The Tribunal then considered section 101 of the Family Assistance Administration Act, which allows for waiver of a debt subject to the Tribunal being satisfied that:
·      The debt did not result wholly or partly from the debtor or another person knowingly:
-making a false statement or false representation; or
-failing or omitting to comply with a provision of the family assistance law; and
·      There are special circumstances (other than financial hardship alone) that make it desirable to waive; and
·      It is more appropriate to waive than to write off the debt or part of the debt.
The term “special circumstances” is not defined in the legislation. However, the Federal Court and the Tribunal have considered the issue of special circumstances on a number of occasions. In every case, the individual circumstances of the case were examined to determine whether the circumstances were such that it would be unjust, unreasonable or inappropriate for the debt to be recovered. In particular, the Full Court of the Federal Court in the matter of Dranichnikov v Centrelink [2003] FCAFC 133 determined that whether there are special circumstances in a particular case is dependent on whether there are circumstances that would distinguish the case from the usual case.
Ms Barrett gave evidence that she is a single parent of [Son A], [an age]-year-old boy. She told the Tribunal that [Son A’s] father was an alcoholic and during that relationship she suffered physical, emotional and financial abuse. [Son A’s] father died by suicide in 2011, and Ms Barrett was reluctant to enter a relationship for many years. [Son A] was and is her priority. When [Son A] started secondary school, Ms Barrett entered a relationship with a long-time friend, [Mr A]. She believed that [Son A] would benefit from a male role model. Ms Barrett said that her father died of cancer when she was 18 months old, she does not have any brothers and she and [Son A] are estranged from his father’s family.
Ms Barrett moved in with her former partner in approximately late 2021. The household expenses were shared equally, and Ms Barrett was responsible for all of [Son A’s] expenses. The relationship ended in late 2023 but they continue to live together under the same roof because neither can afford to move out. They each have their own room and expenses are shared. Ms Barrett gave evidence that the relationship is amicable, and she is not suggesting that her former partner was or is abusive. In her written statement to the Tribunal, Ms Barrett submitted:
…domestic abuse situations where no bones are broken are still something we need to work on. While they are more subtle, they can cause just as much distress. One example is the onus on women to provide financial documentation which they must rely on their partners. When the partners are not compliant, it puts women in a financially controlled environment. I can’t legally obtain someone else’s records unless they voluntarily give them to me.[6]
[6] A21
Ms Barrett gave evidence that she is unable to work because of her mental health and long trauma history. In addition to the family violence she endured with [Son A’s] father and the trauma of his suicide, Ms Barrett was adopted and sexually abused as a child by her mother’s partner. She has been diagnosed with major depression, panic/anxiety and agoraphobia which was consistent with the medical evidence she provided.[7] She is unable to leave her house. She receives trauma counselling from a private psychologist and relies on Afterpay to make those payments. She must see a psychiatrist for an assessment but cannot afford the $800 consultation fee. Ms Barrett relies on FTB and jobseeker payment but after household expenses are paid, there is very little remaining, approximately $30 to $50, which was consistent with the Statement of Financial Circumstances provided to the Tribunal.[8]
[7] A39-A44
[8] A30
Ms Barrett said that she lives fortnight to fortnight. She told the Tribunal that these FTB debts have had a significant impact on her finances. Her top-ups and tax refunds in recent years have all been withheld and she has not been able to access a Centrelink advance to meet her financial obligations. Centrelink’s records show that a significant portion of both debts have been repaid because Ms Barrett’s top-ups and tax refunds have been withheld, as well as withholdings from her fortnightly Centrelink payments exceeding $100. The Tribunal notes that debts can be recovered even if they have been written off.
Ms Barrett gave evidence that [Son A] is in [grade] and needs a new laptop, which she cannot afford, and she desperately needs dental work, which she cannot afford. Ordinarily, she would use the FTB top-ups and tax refunds to meet such expenses. Ms Barrett submitted that she is ‘financially crippled’ by these debts and the review process has been overwhelming for her and has had an adverse effect on her mental health.
[Friend A], a long-time friend of Ms Barrett prepared a witness statement in which she confirmed much of Ms Barrett’s evidence to the Tribunal. [Friend A] described a volatile relationship between Ms Barrett and [Son A’s] father. Ms Barrett reported to [Friend A] that she feared for her life and incidents where “he would beat her, throw things at her and taunt her.”[9] [Friend A] also described a tense relationship between Ms Barrett and her sister from whom she is now estranged. As a teenager, [Friend A] said that Ms Barrett was left to deal with the police and ‘pimps’ visiting her home because of her sister’s behaviour. When describing Ms Barrett’s relationship with her former partner, [Mr A], [Friend A] said that “cracks started to appear” and there is evidence of domestic violence, again. He has been controlling Ms Barrett. He refuses to assist with paying for household bills, forces her to ask for money which is demoralising for her, and he knows that.[10] [Friend A] reported that Ms Barrett told her that “she has needed to dumpster dive for food and visit the local charity shop which leaves food out for people.”[11]
[9] A65
[10] A66
[11] A67
The Tribunal found Ms Barrett to be a credible witness who gave her evidence in a frank and balanced manner. While she expressed concern about the systemic issues that empower abusers to exercise further control over already vulnerable victims of family violence, she expressed gratitude for the support she receives from the Australian government.
Having regard to the circumstances of this case, including Ms Barrett’s trauma history, her mental health issues and her straitened financial circumstances, together with the impact of these debts on her mental health and her already strained financial situation, the Tribunal is persuaded that special circumstances exist that make it appropriate to waive part of the debt for the 2021/22 financial year. Centrelink’s records show that the debt for the 2021/22 financial year totalling $13,766.68 (debt number [1]) has been repaid in part and the outstanding balance as at 15 April 2025 was $6,676.33. The Tribunal is satisfied, that the outstanding balance of debt number [1] as at 15 April 2025 be waived in accordance with section 101 of the Family Assistance Administration Act. This means that the Tribunal has waived part of the debt for the 2021/22 financial year only. If a debt exists for the 2022/23, the debt is recoverable.
The Tribunal notes that the debt for the 2021/22 financial year has been written off. However, the write off is not providing any relief for Ms Barrett because her FTB top‑ups and tax refunds continue to be withheld to recover the debt. It was apparent to the Tribunal, that despite the write off, the debt was and continues to have an adverse impact on Ms Barrett’s mental health and wellbeing and continues to make her financial hardship worse. In the circumstances, the Tribunal is satisfied that it is more appropriate to waive the debt relating to the 2021/22 financial year.
For a debt to be waived under section 101, the Secretary and the Tribunal standing in the shoes of the Secretary must be satisfied that the debt did not result from the debtor or another person knowingly making a false statement or failing or omitting to comply with a provision of the family assistance law. There is no evidence that Ms Barrett made a false statement to Centrelink. Centrelink’s records suggest that Ms Barrett did not advise that she was partnered until May 2023, although there is a reference to an online update on 25 October 2021. In any event, the Tribunal is not satisfied that a delay in advising that she was partnered resulted in the debt. The debt resulted because her former partner failed to lodge his tax return within the prescribed time limit. It follows that the outstanding balance of the FTB debt for the 2021/22 financial year as at 15 April 2025 is waived under section 101 of the Family Assistance Administration Act.

Write off

Subsection 95(2) of the Family Assistance Administration Act allows for a debt to be written off for a period of time where the debt is irrecoverable at law, the debtor has no capacity to repay the debt, the debtor’s whereabouts are unknown, or it is not cost-effective for the Commonwealth to take action to recover the debt. In circumstances where Ms Barrett is receiving payments under social security law and family assistance law, she is taken to have capacity to repay the debts. Therefore, subsection 95(2) does not apply.
Subsection 95(4A) allows the Secretary to write off a debt that has resulted because of the operation of section 28 provided that the couple ceased to be members of a couple after the end of the income year after the cancellation income year, the claimant has lodged an income tax assessment, if required to. Ms Barrett’s ex-partner still had not lodged his 2021/2022 income tax return by the time they ceased to be members of a couple. Ms Barrett ceased to be a member of a couple and while she has lodged her 2021/2022 tax return, [Mr A] has not. The Tribunal is satisfied that the provisions in subsection 95(4A) are satisfied. However, having regard to the impact on her mental health and her already strained financial situation, as well as the Tribunal’s finding to waive recovery of the outstanding balance of the 2021/22 FTB debt, subsection 95(4A) does not apply.

DECISION

The Tribunal sets aside the decision under review and remits the matter to Centrelink to reconsider with the following Orders:

Ms Barrett received FTB totalling $13,766.68 in the 2021/22 financial year, which she was not entitled to receive in accordance with subsection 28(2) of the Family Assistance Administration Act, and this is a debt due to the Commonwealth under section 71 of the Family Assistance Administration Act.
The outstanding balance of the FTB debt for the 2021/22 financial year as at 15 April 2025, $6,676.33, is waived in accordance with section 101 of the Family Assistance Administration Act.
Ms Barrett’s entitlements to FTB for the 2022/23 financial year be recalculated using her actual adjusted taxable income, $21,092, and [Mr A’s] most recent indexed estimated or indexed actual income, being $40,433.71.
If a debt exists following the recalculation for the 2022/23 financial year, it is a debt due to the Commonwealth under section 71 of the Family Assistance Administration Act and is recoverable.

Date of hearing:	25 June 2025
Representative for the Applicant:	Self-represented