Browning and Department of Family and Community Services - [2000] AATA 475

DECISION AND REASONS FOR DECISION [2000] AATA 475

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N1999/1102

GENERAL ADMINISTRATIVE DIVISION       )
           Re      DAVID JOHN BROWNING
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Respondent

DECISION

Tribunal Ms S M Bullock, Member

Date14 June 2000
PlaceSydney

Decision      The Tribunal sets aside the decision under review and substitutes its decision under section 1237 AAD of the Social Security Act 1991 that: 1. For the period 1 August 1996 to 28 February 1997, the overpayment debt of Family Payment owed to the Commonwealth be waived in its entirety; and 2. For the period 1 March 1997 to 6 November 1997, one quarter of the overpayment debt of Family Payment owed to the Commonwealth be waived.
  ……………………………
  S M Bullock
  MemberCATCHWORDS
SOCIAL SECURITY – Family Payment- overpayment- debt due to the Commonwealth – estimate of income – assumed notifiable event – waived- special circumstances.

Social Security Act 1991, ss 872(1), 885, 881, 1069-H6, 1069-H13, 1069-H14, 1069-H16, 1069-H18, 1069-H22, 1223(3), 1223(4), 1237AAD

Re Stuart and Secretary, Department of Social Security (1998) 54 ALD 241
Re Secretary, Department of Family and Community Services and Delia [1999] AATA 799
Secretary, Department of Social Security v Hales (1998) 82 FCR 154
Re Trimboli and Secretary, Department of Social Security (1989) 86 ALR 64

REASONS FOR DECISION

This is an application for review to the Administrative Appeals Tribunal ("the Tribunal") by Mr David John Browning ("the Applicant") against a decision of the Social Security Appeals Tribunal ("SSAT") made on 11 June 1999 (T2). The SSAT decided that there was a Family Payment debt for the period 1 August 1996 to 6 November 1997 but the amount of the Family Payment debt owed between 1 August 1996 and a date in January 1997 when Mr Browning's partner changed employment, should be waived.
The SSAT's decision set aside the decision of an Authorised Review Officer ("ARO") of the Department of Family and Community Services made on 18 December 1998 (T19) which determined that a "Family Allowance" debt existed pursuant to section 1223 of the Social Security Act 1991 ("the Act") in the amount of $5113.25 for the period 1 August 1996 to 6 November 1997. The ARO's decision affirmed the original decision of a delegate of the Department of Family and Community Services made on 12 November 1998 (T12).
A hearing was held before the Tribunal in Sydney on 13 January 2000. Mr Browning attended the hearing and provided oral evidence. He was self-represented. The Respondent, the Secretary, Department of Family and Community Services ("the Department") was represented by Mr B Slattery, departmental advocate. The Tribunal took into evidence documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 ("T documents", T1-T29) in addition to the following exhibits:
Exhibit No Description Date
A1 A2 A3 R1 R2 R3 Letter to the Tribunal from Mr D Browning with attached letters to Mr B Slattery Letter from Dr M Sanders, Mr Browning's General Practitioner Letter to Mr B Slattery from Mr Browning with attached pay slips Letter from Mr B Slattery to Mr Browning Respondent's Statement of Facts and Contentions Notice from Ms R Trewenack concerning date of commencement of employment with the New South Wales Department of Community Services 3 October 1999 1 October 1999 22 November 1999 27 October 1999 4 January 2000 10 September 1999

ISSUES

The issue to be determined in this matter is whether or not there is a debt owed to the Commonwealth arising out of Family Payment to Mr Browning between 1 March 1997 (as agreed by the Respondent) and 6 November 1997.
The Tribunal notes that the Department, while discussing the possibility of the existence of Family Payment debt from 1 August 1996 rather than the later date of 1 March 1997 as advised by the departmental advocate at the hearing, is not disputing the SSAT's decision. In relation to the Department's belief that there is a possibility of the existence of an earlier debt, the Department formally agreed to waive the Commonwealth's right to recover that part of the debt pursuant to subsection 1237AAB(2) of the Act (Exhibits R1 and R2).
LEGISLATION
A determination of this matter requires consideration of the provisions of the Act as they relate to Family Payment. It should be noted that Family Payment became known as Family Allowance from 29 March 1998.
A person's rate of Family Payment is dealt with in Part 3.7 of the Act and specifically, section 1069 of the Act provides that a person's rate of Family Payment is to be calculated using the Rate Calculator which contains several modules.
Section 1069-A1 requires that the Secretary of the Department apply the Family Payment Income Test as set out in submodule 3 of module H.
Section 1069-H23 (step 2) requires the Secretary to determine the person's income in the appropriate tax year, as required in submodule 2, subsection 1069-H13 and 1069-H14 state:
"Appropriate tax year
1069-H13. Subject to the following provisions of this Submodule, the appropriate tax year for a family payment payday is the base tax year for that payday.
Base tax year
1069-H14. The base tax year for a family payment payday is the tax year that ended on 30 June in the calender year that came immediately before the calendar year in which the payday occurs."
Therefore, unless other circumstances invoke other provisions of the submodule, the appropriate tax year is the base year. Accordingly in this case, the base tax year for the calendar year 1996 is 1994/95 and the base tax year for the calendar year 1997 is the base year 1995/96. Submodule 2 also provides that in certain circumstances the year can change from the base year to the current tax year. When circumstances are such that a notifiable or assumed notifiable event occurs, as defined in the legislation, the Secretary may have regard to an income amount estimated by a person. If the person's actual income amount is found to be greater than 110 per cent of the estimated income, then section 1069-H18 applies and as relevant states:
"1069-H18. If:
(a) a notifiable event occurs in relation to a person; and
(b) the person's income for the tax year in which the notifiable event occurs exceeds:
(i) 110% of the person's income for the base tax year; and
(ii) 110% of the person's income free area;
the appropriate tax year, for the purpose of applying this Module to the person for the remainder of the family payment period, is the tax year in which the notifiable event occurs."

Section 1069-H5 provides that an event is an assumed notifiable event when a person has been given a notice under subsection 872(1) of the Act which states that the event is a notifiable event for the purposes of the module.
Sections 885 and 891 of the Act may require the rate of Family Payment to be recalculated retrospectively and a debt may then arise under subsection 1223(1) of the Act.
As relevant section 885 states:
"885. (1) If:
(a) in working out the rate of family payment payable to a person, regard is had to the person's income for a tax year; and
(b) the income to which regard was had consist of an amount estimated by the person; and
(c) the person's income for that tax year is more than 100% of the amount of the income on which the determination of the rate of family payment was based;
the person's rate of family payment is to be recalculated on the basis of that income.
(2) For the purposes of this section, a person's income for a particular tax year is the sum of:
(a) the person's taxable income for that year; and
(b) the person's adjusted fringe benefits value for that year; and
(c) the person's target foreign income for that year; and
(d) the person's net rental property loss fort that year.
(3) in this section:
adjusted fringe benefits value has the same meaning as in points 1069-H25 and 1069-H26 in Module H of the Family Payment Rate Calcutor in section 1069."
As relevant section 891 of the Act states:
"891. If:
(a) the Secretary makes a determination of a person's rate of family payment; and
(b) in making the determination, the Secretary had regard to the person's income for a tax year; and
(c) the income to which regard was had included an amount or amounts estimated by the person; and
(d) the person's income for the tax year is more than 100% of the amount of the income on which the determination referred to in paragraph (a) was based; and
(e) the Secretary makes a determination varying the person's rate of family payment, or cancelling family payment, to give effect to the recalcution required by section 885;
the later determination takes effect on the day on which the earlier determination took effect."
As relevant, subsections 1223(3) and 1223(4) of the Act state:
"1223 (3) Subject to subsection (4), If:
(a) an amount (the "received amount") has been paid to a person by way of family payment; and
(b) the person's rate of family payment is recalculated under:
          (i) section 884 (amendment of assessable income); or
          (ii) section 885 (underestimate of taxable income); or
          (iii) section 886 (failure to notify notifiable event); and
(c) the received amount is more than the amount (the "correct amount") of the family payment payable to the person;
the difference between the received amount and the correct amount is a debt due to the Commonwealth
1223(4) If:
(a) family payment is paid to a person in a tax year; and
(b) apart from this subsection an amount of family payment would become recoverable under subsection (3) before the end of the tax year; and
(c) the amount would be recoverable because of:
          (i) an increase in the person's taxable income; or
          (ii) an underestimate of the person's taxable income;
the amount is recoverable only after the end oft eh tax year."

Section 1069-H16 deals with the effect of an assumed notifiable event changing the person's appropriate tax year from the base year to the appropriate tax year in which the event occurred. As relevant, section 1069-H16 states:
"1069-H16. If:
(a) an assumed notifiable event in relation to a person occurs after the end of the base tax year and before the beginning of the family payment period; and
(b) the person's income for the tax year in which the assumed notifiable event occurs exceeds:
(i) 110% of the person's income for the base tax year; and
(ii) 110% of the person's income free area;
the appropriate tax year, for the purposes of applying this Module to the person from the beginning of the family payment period, is the tax year in which the notifiable event occurs."

Section 1069-H21 of the Act provides that a person may be paid on the basis of a person's estimated income for a given tax year, that is, the tax year in which the claim for Family Payment is lodged, the "current tax year at the time of the request". As at 1 August 1996, sections 1069-H21 and H22 state:
"1069-H21. If:
          (a) family payment:
  (i) is not payable to a person because of this Module; or
  (ii) is payable at a reduced rate because of this Module; and
(b) the person gives the Secretary an estimate of the person's income for a tax year; and
(c) the person gives the Secretary to make a determination under this point; and
(d) the person agrees that the person's rate of family payment for that tax year is to be recalculated if the person's actual income for that tax year exceeds 100% of the amount estimated by the person;
the Secretary must determine that the appropriate tax year, for the purpose of applying this Module to the person for a family payment payday on or after the day on which the request is made, is the tax year in which the request is made.
1069-H22. A request under point 1069-H21 must be made in writing in accordance with a form approved by the Secretary."

Part 5.4 of the Act deals with the non-recovery of debts and in some circumstances, the Secretary may decide not to recover debts.
As relevant, section 1236 of the Act deals with the write-off of debts in certain circumstances. Section 1237A(1) of the Act deals with the Secretary waiving the right to recover a proportion of a debt that is attributable solely to an administrative error made by the Commonwealth.
Section 1237AAD deals with the waiver of a part or whole of a debt in special circumstances and as relevant, provides:
"1237AAD Waiver in special circumstances
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 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 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 of part of the debt."

BACKGROUND

The information contained in this section is provided by way of background and the facts are not in dispute.

Mr David John Browning was born on 30 August 1940. He attended secondary school until he was aged approximately 17 years and then worked variously in employment situations involving sales, counselling and accountancy. Mr Browning also undertook what he described as an "informal" counselling course.
Mr Browning lodged a claim for Family Payment on 1 August 1996 (T3) advising on the form that he had entered into a de facto relationship with Ms R Trewenack on 14 September 1995. Mr Browning also advised that from 24 July 1996 he was caring for his two children, Azure (date of birth 8 November 1982) and Jeremy (date of birth 18 May 1984).

Mr Browning recorded on the claim form that he and his partner were working in casual positions and indicated that Ms Trewenack's taxable income for 1994/95 was $11,191.00 Mr Browning provided an estimate of his 1994/95 taxable income as $9,280.00 (T3, p31). Mr Browning estimated that his taxable income for the 1995/96 year would be $26,871.00 and Ms Trewenack's estimated 1995/96 taxable income would be $7,913.00, providing a combined estimated taxable income of $34,784.00 for the 1995/96 year. For the 1996/97 year, Mr Browning estimated that his taxable income would be $17,000.00 and Ms Trewenack's would be $7,900.00, providing a combined estimated taxable income of $24,900.00 in the 1996/97 year (T3, p32).

On 29 August 1996, Mr Browning was advised by the Department that he would be paid Family Payment of $182.95 per fortnight commencing on 12 September 1996. A letter advised Mr Browning that he must tell the Department of certain events or changes which occurred for either himself or his partner such as a change in job, ceasing or recommencing work or if his income increased beyond $27,390.00 in the1995/96 or 1996/97 financial year (T5).
In a departmental letter of 23 December 1996, Mr Browning was advised that Family Payment would be $203.10 per fortnight and that he must notify the Department within 14 days of any change in circumstances including a change of employment or if his combined income increased beyond $27,390.00 in the 1995/96 or 1996/97 financial years (T6).
On 1 January 1997, Mr Browning's Family Payment increased to $218.50 per fortnight and further increased from 19 June 1997 to $232.00 per fortnight. Mr Browning was advised that the Family Payment would increase to $232.00 per fortnight by letter of 13 June 1997 (T8).
A data matching exercise was completed by the Department on 10 April 1997 (T7) in which the combined income of Mr Browning and Ms Trewenack was calculated as being $39,566.00, made up of Mr Browning's income of $28,376.00 and Ms Trewenack's income of $11,190.00 (T2). At the SSAT income figures were recorded, apparently from the Centrelink file, but the Tribunal was informed by the Respondent that it could find no basis for the SSAT using the figures it did. In any event, the slight difference in figures does not affect the calculations, Mr Slattery informed the Tribunal.
On 29 October 1997, Mr Browning completed a Centrelink form "Review of your Family Payment and Childcare Assistance" (T9), indicating that his 1996/97 income was $30,447.00 and Ms Trewenack's income for the same period was $12,500.00, providing a combined income of $42,947.00. As a result of this, the rate of Family Payment reduced to the basic rate of $46.80 per fortnight from 20 November 1997 (T10).
The Department received copies of the 1996/97 tax assessment notices for Mr Browning and Ms Trewenack (T11) and on 12 November 1998, the Department raised a debt against Mr Browning for $5,113.25 and advised him of this in writing.
Mr Browning sought a number of internal reviews of the decision to raise the debt (T14, T15, T16).
On 3 December 1998, the departmental delegate's decision was referred to an ARO (T17) and on 18 December 1998, the ARO affirmed the decision and advised Mr Browning in writing of this decision (T20, T21).
On 29 January 1999, Mr Browning was advised that the debt would be recovered by the Department by means of deductions of $45.03 per fortnight from his then Family Allowance (T23).
On 3 February 1999, Mr Browning appealed to the SSAT.
On 11 June 1999, the SSAT set aside the ARO's decision and determined that "the amount of the debt representing Family Payment overpaid to Mr Browning prior to the date in January 1997 when Mr Browning's partner changed jobs is to be waived". The gross debt was subsequently reduced as a result of this decision to $3,021.30. Mr Browning was advised of this by letter of 27 October 1999 (Exhibit R1).
On 21 July 1999, Mr Browning appealed to the Tribunal stating that the reasons he was seeking review were:
"1. CentreLink's negligent handling of original application for Family Allowance.
2. Negligent approach to assessment of application.
3. Although appeal partially successful it should have been totally successful due to information in paragraph 37." (T1, p2)
(Paragraph 37 of the SSAT's decision indicates that in the SSAT's view, Mr Browning should not have been paid Family Payment based on his estimated income for 1996/97 unless he requested under section 1069-H21 of the Act that the Department make a determination to change his appropriate tax year).

EVIDENCE OF MR BROWNING

Mr Browning explained to the Tribunal that he had separated from his wife in about 1998. His two children, Azure, now aged seventeen and Jeremy aged sixteen, came to live with him in about July 1996 as they were unhappy living with their mother and her partner at the time. Prior to this Mr Browning had access to his children. In July 1996, Mr Browning had been living in a de facto relationship with Ms R Trewenack from about 14 September 1995 (T3). Mr Browning told the Tribunal that this was a period of great adjustment for everyone. The children were adjusting to living with him and his partner. Mr Browning was adjusting to living with the children and they were also finding it difficult readjusting and getting over the difficult period they had spent with their mother and her partner, particularly in relation to religion issues. There were differences of opinion, Mr Browning noted, between himself and Ms Trewenack about how to raise the children and specifically issues of discipline. Further, Ms Trewenack suffered from lethargy during this time and Mr Browning had to take over almost total responsibility for the running of the household.
When the children came into his care, Mr Browning found that he needed income support hence his claim for Family Payment. He had not sought such income support from the Department previously. Mr Browning told the Tribunal that he did not consider the completion of the Family Payment form a difficult task. He recalled reading the claim form and indicated that he would have certainly read and understood that he must inform the Department of certain changes including increases in income or changing of employment. Mr Browning explained to the Tribunal however that it was a long time ago and even though he had read the form completely at the time of its completion, in later times he had forgotten or overlooked the "small print".

At the time of completion of the form, Mr Browning indicated that he was working as a residential care worker employed on a casual basis in group homes in two or three locations. He was never sure at that time whether he would be working two or three days per week. In 1997 however, Mr Browning's employment situation stabilised. Ms Trewenack was working at Anglicare on a casual basis but later in 1997, Mr Browning was able to assist Ms Trewenack to obtain employment within the New South Wales Department of Community Services. When Mr Browning, Ms Trewenack and the children lived together, they were living in Ms Trewenack's home and Mr Browning assisted in the completion of renovations to the property. Mr Browning stated that Ms Trewenack did not contribute financially to the household.
Mr Browning stated that the Department handled his original application for Family Payment very poorly. In this regard, Mr Browning noted that when he made his claim, he gave the Department his pay slips which a departmental officer photocopied and handed back to him. It seemed to Mr Browning that the Department had no regard to these pay slips when it came to calculate the rate of Family Payment to which he was entitled. Mr Browning stated that it was up to the Department to check all the information provided to it and this involved looking at not only the claim form in which he recorded his income but also the pay slips. Mr Browning stated that he provided the Department with the required information and as far as he was concerned he thought that he had done everything that was required of him. Mr Browning stated that he was very grateful to receive Family Payment and that he was "totally open". Mr Browning stated that he knew nothing about how Family Payment entitlement was determined nor of the calculation of rates of payment. He trusted the Department, who had the knowledge of such matters, to make a determination based on all the information he had provided. That the pay slips were not on the file, could not be explained by Mr Browning. Mr Browning obtained copies of the pay slips through a Freedom of Information application (Exhibit A3). These pay slips covered the four weeks' pay period of $696.69 gross for the period ending 11 July 1996 and $1,166.04 gross for the period ending 25 July 1996. Extrapolating those amounts over 12 months Mr Browning indicated that the annual income would have been approximately $22,344.00 which, when added to Ms Trewenack's income of $7,900.00, produced a combined total income of $30,244.00, which is well above the income figure which would have attracted the higher rate of Family Payment. Mr Browning asked why this information contained in the pay slips was ignored and considered that the Department's failure to check the pay slips against his claim form was evidence of irresponsible and negligent handling of his original application. Mr Browning indicated that the reason for his low estimates of income during the 1996/97 financial year probably related to his uncertainty as to the level of casual work he might have expected. While there was a decrease in his estimated income from 1995/96 to 1996/97 which in fact was not borne out by his actual income, Mr Browning stated that he completely trusted the Department to consider all the information he provided and make an intelligent and responsible decision on how much to pay him (Exhibit A3).
Mr Browning was asked about his failure to advise the Department of Ms Trewenack's change of employment circumstances within 14 days of this occurring. In this regard, Mr Browning notified the Department of Ms Trewenack's change of employment some months after its occurrence in the "Review of your Family Payment and Childcare Assistance Form" which he completed on 29 October 1997. He notified in this form that Ms Trewenack had changed employment in January 1997 (T9). Mr Browning told the Tribunal that he realised he had not told the Department the information required but that this was a oversight. It was very difficult for him to remember the requirements listed in the small print in various letters sent to him by the Department which notified him not only of the amount of Family Payment but his obligations to inform the Department of certain events within a specified time. Mr Browning stated that Ms Trewenack's change of employment was a minor event and her changing jobs in fact made no difference to their financial situation. The notification of such a minor event was, he recognised, a legal requirement, but Mr Browning considered this to be "a technicality" of no significance in the overall scheme of things.
Mr Browning was asked about his current circumstances.
Mr Browning's relationship with Ms Trewenack has ceased. His children are still living with him although they now live in rental accommodation for which he pays a rental of $150.00 per week. At the time of hearing, Jeremy was still attending school. Azure has given birth to a baby and Mr Browning told the Tribunal that he supports his daughter and grandchild. Currently, Mr Browning earns between $1,050.00 to $1,100.00 net per fortnight as a residential care worker. Mr Browning has no debts apart from a $400.00 credit card balance owing at the time of the hearing. His assets consist of a car and furniture. Mr Browning estimated that he had $700.00 in a bank account. He is finding that he "is eating into" his savings as a result of having to repay the debt to the Commonwealth, in addition to caring for himself, his two children and grandchild.
Mr Browning described his various health problems. He suffers pains in his chest and believes this is related primarily to stress. Dr M Sanders, Mr Browning's general practitioner of some four years, provided a letter of 1 October 1999 in which he wrote:
"He has had a panoply of symptoms with myalgia, abdominal pains, high blood pressure, poor sleep, depression and irritability, fatigue and headaches. He has had major stresses at work initially (although these have settled somewhat) and at home; he's had to deal with the break up of a longterm relationship and consequent sole responsibility for his two children.
After investigation it seems that his symptoms are stress related. At times he has needed up to a week off work to recover. He is near the limits of his capacity to cope and further stress could have major effects on his health." (Exhibit A2)

Mr Browning informed the Tribunal that he has taken conventional medication therapies and herbal preparations but still experiences the symptoms as described by Dr Sanders. Mr Browning noted that he manages and stated, "I live for my family responsibilities". While Mr Browning described often feeling ill and in pain, he noted stoically that he was "not crippled" and that he just had to manage.
SUBMISSIONS
Mr Browning submitted that his original claim for Family Payment was not handled professionally by the Department. He submitted that when he claimed Family Payment he provided the Department with all the information required of him, including pay slips. Mr Browning stated that he trusted the Department to know how to administer its own income support schemes. If his estimates of his combined income were too low, this should have been pointed out to him by the departmental staff, particularly as they had pay slips with which to cross reference his claim form income details. If these matters had been attended to properly, then, Mr Browning submitted, a different decision would probably have resulted in there being no or a very small debt.
Mr Browning stated that he did not question the amount of Family Payment provided to him as he believed he was eligible for Family Payment and in fact was extremely grateful to be able to receive it.
It was grossly unfair and unjust, Mr Browning contended, having given the Department all the information which was required of him, that he was then held responsible for an overpayment which was in fact the responsibility of the Department. The difficulty for the Department was that it was not properly resourced to undertake the legislative responsibilities bestowed upon it in relation to income support, Mr Browning submitted. There was a "cut price" delivery of service in terms of provision of income support, review and the inadequate time taken by the Department in the administration of its responsibilities. In this regard, Mr Browning submitted that the debt that the Department considered was owed by him to the Commonwealth in fact had arisen out of the poor administrative practices of Centrelink and its officers. When dealing with large amounts of public money, such as undertaken by the Department, then there must be proper management systems, checks and balances put in place to ensure that the bureaucracy undertakes its responsibilities correctly, Mr Browning further contended.
In his letter to Mr Slattery (attached to Exhibit A1), Mr Browning noted that rather than take responsibility for the situation of having too few staff to undertake its responsibilities adequately, the Department "dumped" their failure to properly administer the system on Mr Browning, the client. It was undeniable, Mr Browning contended, that the Department did not manage and review Family Payments regularly and that Australian citizens would therefore continue to go into unnecessary debt. Mr Browning submitted that because the Department and Centrelink has the "almighty power of Gov. Legislation and Law behind it is very hard for us/me, the small rather defenceless citizens to make much impact on your obvious mistakes and negligent systems." (Exhibit A1)
In relation to Mr Browning's failure to advise the Department of Ms Trewenack's change of employment, Mr Browning submitted that this was a minor consideration. The Department was hiding behind a technicality, Mr Browning submitted, which did not impact in any significant way on the matter under consideration. While acknowledging that he had overlooked the requirement to provide the Department with information of changes specifically in relation to either his or his partner's employment, Mr Browning strongly contended that this was detracting from the main responsibility for the overpayment being attributed to the Department. Mr Browning, in his letter to Mr Slattery, indicated that the Department had made his minor error into a "major blunder" because the Department's other supervision methods were so deficient. Mr Browning submitted in this regard that it would be a simple task to change the review of Family Payments to a three monthly review system and then his situation might never had arisen.
In addition to the Department's administrative error in this matter, Mr Browning submitted that the Tribunal should take into account his health which had not been good since about May 1999. Mr Browning referred to his suffering recurrent chest pain and his many days off work. He had also suffered the break up of his relationship with Ms Trewenack and moved into a rented home in Leura. These events had been extremely stressful and imposed upon this is the stress of the overpayment debt. Mr Browning is having to adjust to new living arrangements and caring as a sole parent for his children as well as being a grandparent to his teenage daughter's baby. In terms of Mr Browning's finances, he submitted that his income only just covered his living expenses and he was having to find finances to undertake dental work for his children.
Mr Browning summarised his reasons why he strongly believed that the debt due to the Commonwealth is unfair, punitive and contributing to his ill health.
"1. Deficient, negligent and casual handling and assessment of original application.
2. Ignoring indications of an anomaly in financial details given my me.
3.Ignoring pay slip totals that could have indicated a different figure on which to base income estimates to decide Family Payment amount.
4. Allowing over 12 months to pass before advising me that there was a claimed debt.
5. Deficient review period due to staff cuts, should be quarterly.
6. Medical condition that is being exacerbated by Centrelink demand."

All of the above mentioned circumstances, Mr Browning submitted were in combination a constellation of circumstances which could be considered special. Mr Browning referred the Tribunal to Secretary, Department of Social Security v Hales (1998) 82 FCR 154 submitting that the circumstances in that case were similar to his own and the Tribunal should be guided by the decision of the Court in that matter. Accordingly, Mr Browning concluded that because of his special circumstances including the Department's administrative error, he should have the remaining debt due to the Commonwealth waived.

Mr Slattery, for the Department, submitted that Mr Browning's failure to notify Ms Trewenack's change in employment was not just a technicality but a requirement under the law. Mr Slattery further submitted that had Mr Browning advised the Department within 14 days of Ms Trewenack's change of employment status, this notification would have triggered the Department to obtain further income details which, given the evidence now available, would in all probability have resulted in a re-calculation of the Family Payment payable to Mr Browning and hence the debt would have been reduced. Mr Slattery therefore rejected Mr Browning's argument that the Department was trying to hide behind a technicality, arguing that in fact this requirement to inform of a notifiable event would in fact, if complied with by Mr Browning, have been to his benefit as opposed to his detriment.
Concerning the pay slips which Mr Browning submitted he had provided to the Department at the time of his claim and subsequently obtained through an FOI application, Mr Slattery stated that because there was no evidence to the contrary, although an "unusual" set of circumstances, he accepted that Mr Browning had provided the Department with pay slips.
Mr Slattery also noted that following advice from Ms Trewenack that she commenced employment at the New South Wales Department of Community Services in February 1997, the Department was giving Mr Browning the benefit of its determination that the date for Ms Trewenack's change of employment was 28 February 1997. By the Department extending this date of change of employment to end of February, the debt owed by Mr Browning to the Commonwealth was reduced further by one month.
Even though Mr Slattery was accepting that pay slips were provided, he submitted that the best person to estimate his income was in fact Mr Browning, the claimant. It was not up to the Department to second guess the income Mr Browning would expect. If the Department had known of Mr Browning's increased income then it would have calculated his entitlement for Family Payment at a reduced rate. Even if the Department had had regard to the pay slips, the period they covered was relatively short and the Department had no way of knowing whether or not these pay slips were indicative of a proper estimate, given Mr Browning himself had provided an estimate on the claim form. The question also needed to be answered as to why, with the pay slips, did Mr Browning in fact give such a low estimate of $17,000.00 for his 1996/97 income. While with hindsight Mr Slattery submitted that it may have been better for the Department to undertake better checking, there was no sole administrative error. It was not until the review process was undertaken following Mr Browning's completion on 29 October 1997 of a review form, that the Department became aware of Ms Trewenack's changes in circumstances and therefore Mr Browning's failure to comply with a number of notices requiring him to provide advice of an assumed notifiable event. Had the Department been so advised, then the overpayment would have been reduced, Mr Slattery submitted. Mr Slattery further submitted that in respect of Mr Browning's claim for Family Payment he had received payment from 1 August 1996 to 31 December 1996 on the basis of Mr Browning's combined income estimate for 1996/97 of $24,900.00 and was paid at a higher rate of Family Payment of $182.95 per fortnight. If Mr Browning had been paid on the basis of his base year income for that period as advised at the time, that is, the 1995 estimate of $34,784, he would have been paid at a lower rate of Family Payment which at that time was $45.40 per fortnight.
Because the Department was not fully informed of Mr Browning's circumstances, Mr Browning continued to be paid Family Payment into the 1997 calendar year on the basis of his 1996/97 income estimate. Mr Slattery submitted that from 1 January 1997 the appropriate year would have been the new base year 1995/96 but for the fact that the 1996/97 estimate was being used. If Centrelink had known the actual income for 1996/97 at the time, the base year would have been used to determine Mr Browning's entitlement to Family Payment and only the lower rate of Family Payment would have been payable to Mr Browning.
A departmental letter to Mr Browning of 23 December 1996 (T6) contained a recipient notification notice issued under subsection 872(1) of the Act and this set out Mr Browning's obligations including informing of whether he or his partner started or recommenced work or changed jobs. As Mr Slattery noted previously, the Department had given the benefit to Mr Browning of considering Ms Trewenack changed her employment on 28 February 1997, however Mr Browning did not notify of this change at the time and because of this failure, Family Payment continued to be paid at the higher rate.
Mr Slattery submitted that the first the Department learned that Mr Browning's actual income for 1996/97 was $42,947.00 was when he returned his review form completed on 29 October 1997 (T9). As this figure was not more than 110 per cent of the base year income, then section 1069-H18 did not apply to change the appropriate year to 1996/97. Family Payment was paid on the basis of Mr Browning's estimate of income for 1996/97 and regard by the Department continued to be had to that estimate. The rate was not changed as at the time the Department did not know of any changed circumstances. If the Department had known that Mr Browning's income for 1996/97 was actually $42,947 and not $24,900 which he had estimated, then Mr Browning would have been paid Family Payment at a lower rate from the date of claim, Mr Slattery submitted. From 1 January 1997, the new base year became 1995/96. However, because Mr Browning's 1996/97 estimate (from August 1996) would have entitled him to a higher rate using the 1995/96 estimate, the tax year 1996/97 remained the appropriate year at that time and regard was had to it by the Secretary. Mr Slattery submitted with the benefit of hindsight, 1995/96 should have remained the appropriate tax year in determining Mr Browning's entitlement from 1 August 1996 to November 1997.
As the estimated income for 1996/97 was $24,900 and regard was had to this estimate, sections 885 and 891 of the Act are employed to recalculate Mr Browning's entitlement based on the actual income for 1996/97 of $42,947. When the rate of Family Payment is recalculated then an overpayment results. Under the provisions of subsection 1223(3) of the Act, a debt is due to the Commonwealth, Mr Slattery submitted.
Mr Slattery observed that the SSAT may have erred in finding that the estimate given by Mr Browning on 1 August 1996 was not a valid request, referring to the decision in Re Secretary, Department of Family and Community Services and Delia. That decision, Mr Slattery submitted, reaffirmed the Department's "broad powers" to obtain relevant information in order to determine entitlement. While Mr Slattery noted that the decision in Re Delia (supra) broadly supported a previous decision in Re Stuart and Secretary, Department of Social Security (1998) 54 ALD 241, Mr Slattery submitted that in Re Delia (supra), the Tribunal took the view that the Secretary has very broad powers to obtain and utilise information for the purposes of ensuring persons are being paid their correct entitlements in accordance with the Act.

Mr Slattery submitted that the Respondent did not formally dispute the SSAT's finding in relation to the aspect of waiver and was not requesting the Tribunal to disturb that aspect of the SSAT's decision. Further, Mr Slattery noted that the Respondent had not applied to the Tribunal for the review of the SSAT decision within 28 days of its publication as required and it was seen as not appropriate to challenge the decision. Even if the Tribunal found that there was a recoverable debt with respect to the period of 1 August 1996 to 28 February 1997, Mr Slattery formally advised the Tribunal that the Department agreed to waive the Commonwealth's right to recover that part of the debt pursuant to subsection 1237AAB(2) of the Act.
In respect of the remainder of the debt for the period 1 March 1997 to 6 November 1997, Mr Slattery submitted that the debt should be recovered from the date of Mr Browning's failure to advise the Department of the notifiable event, that is the date from which Ms Trewenack changed her work circumstances.
Mr Slattery submitted that under the provisions of section 1237A(1) of the Act, the Respondent considered that this provision was not applicable as there was no sole administrative error on the part of the Department. Once Mr Browning had failed to comply with his notification obligations, the debt could not be considered to have arisen "solely" due to any administrative error.
In relation to section 1237AAD of the Act, Mr Slattery submitted that it was accepted that at no stage did Mr Browning knowingly make any false statements or knowingly fail to comply with his obligations under the Act. Further, Mr Slattery submitted that it was not appropriate to "write-off" the debt because the debt is currently being recovered by means of deductions from Mr Browning's Family Payments, his whereabouts is known and it would be inappropriate to write-off the debt at this time.
Turning to the issue of whether there were any special circumstances operating in this matter, Mr Slattery referred the Tribunal to Re Trimboli and Secretary, Department of Social Security (1989) 86 ALR 64 which referred to the equivalent provision in the 1947 Act. Noting that that Tribunal considered it neither appropriate nor proper to attempt a definition of what circumstances might be considered "special", the issue of deciding when it is appropriate to exercise the powers contained in the special circumstances provisions must be exercised in a bona fide manner and involves the exercise of an discretion which is extremely broad. While noting Mr Browning's submissions concerning the error of the Department in having regard to pay slips provided by him, Mr Slattery reiterated his submission that the best person placed to estimate their income at a given time is the claimant and not the Department. Mr Slattery did not consider that the actions by the Department on this issue could be accepted as administrative error.
Mr Slattery noted that Mr Browning's financial circumstances were tight and his health situation was problematic. Whilst acknowledging these difficult circumstances, Mr Slattery did not consider they constituted "special circumstances" in the legislative sense and therefore contended that the Tribunal should not exercise the discretion to waive a part or whole of the debt contained in section 1237AAD of the Act.
FINDINGS
The Tribunal has made its decision in this matter taking into account the oral and documentary evidence, the submissions and by applying the law and case law. The Tribunal found Mr Browning was cooperative in the provision of his evidence and considers him to be a person of truth and credit.
The first issue which the Tribunal must decide is whether or not a debt exists arising out of an overpayment of Family Payment to Mr Browning during the period 1 August 1996 to 6 November 1997.
The Tribunal finds, and it is not in dispute, that Mr Browning was paid Family Payment from 1 August 1996 to 6 November 1997 at a rate calculated on the basis of an estimated combined income of himself and his partner at the time, Ms R Trewenack, in the amount of $24,900 for the 1996/97 financial year. Taxation notices of assessment as noted by the SSAT (T2 paragraph 21) indicate that Mr Browning and Ms Trewenack's combined taxable income for 1995/96 was $40,048, that is, $28,858.00 for Mr Browning and $11,190.00 for Ms Trewenack and for the 1996/97 financial year of $43,357, that is, $30,447 for Mr Browning and $12,910 for Ms Trewenack.
The Family Payment of $182.95 per fortnight was paid to Mr Browning based on the combined estimated income of $24,900 (T5). This higher rate of Family Payment was based on the estimated combined income. Mr Browning was advised in a departmental letter of 29 August 1996 and subsequent departmental letters including those of 23 December 1996 (T6) and 13 June 1997 (T8) that he should advise the Department within 14 days of certain events occurring including an increase in income or a change in employment of either himself or his partner.
In a 'Review of your Family Payment and Childcare Assistance" form, completed by Mr Browning on 29 October 1997 (T9), the Department was advised of certain circumstances including Ms Trewenack's commencing employment at the New South Wales Department of Community Services in January 1997 and also of a combined taxable income for himself and Ms Trewenack of $42947 for the 1996/97 financial year.
The difficulty for Mr Browning is that his Family Payment was calculated using the combined estimate of income of $24,900, when in fact and with the benefit of hindsight, it is known that his actual combined income was $42,947. Mr Browning's actual combined income for the 1996/97 financial year was greater than 110 per cent of his estimated income of $24,900. Therefore, applying the provisions of section 885 of the Act, Mr Browning's rate of Family Payment had to be recalculated on the basis of actual income for the 1996/97 financial year. Applying section 891, the Tribunal considers that an overpayment of Family Payment occurred from 1 August 1996 to 6 November 1997 in the amount of $5,113.25. Applying the provision of subsection 1223(3) of the Act, the Tribunal finds that there is a debt due to the Commonwealth of $5,113.25.
The SSAT concluded that prior to the notifiable event of Ms Trewenack changing her employment situation sometime in January 1997, deemed by the Department to be 28 February 1997, there was no basis to change Mr Browning's appropriate tax year to 1996/97. The SSAT found that Mr Browning did not request the use of his 1996/97 estimate when he claimed Family Payment. Accordingly, the SSAT was satisfied that the Department did not correctly calculate Mr Browning's rate of Family Payment prior to the date of Ms Trewenack's commencement of new employment and thus the debt for this period was attributed solely to administrative error and should be waived under section 1237A of the Act. The SSAT found support in its findings from Re Stuart (supra).
The Tribunal notes the Respondent's discussion of the issue of the waiver of the debt for this first period and in light of the Department not formally disputing the SSAT's decision in relation to this first period of 1 August 1996 to 28 February 1997 and the Respondent's agreement to waive the Commonwealth's right to recover that part of the debt pursuant to subsection 1237AAB(2) of the Act, the Tribunal finds no reason to disturb that aspect of the SSAT's decision. The Tribunal turns to consider the issue of the overpayment debt from the period 1 March 1997 to 6 November 1997.
It is clear that Mr Browning did not comply with his notification requirements by failing to advise of Ms Trewenack's change of employment circumstances within 14 days of her being employed by the New South Wales Department of Community Services. The first the Department was aware of this change in circumstances was when it received Mr Browning's review form on 31 October 1997 (T9). The Tribunal finds therefore that Mr Browning failed to comply with his obligation under section 872 of the Act. This failure, while the Tribunal finds that it was in no way deliberate or indicative of an intention to defraud the Department, was nevertheless an omission. The omission, while seemingly minor to Mr Browning as noted from his submissions, in fact is very significant. If Mr Browning had notified the Department of Ms Trewenack's change of employment circumstances, then this would have triggered the Department to seek further financial information from Mr Browning which, in the Tribunal's view, would have resulted in a re-calculation of his rate of Family Payment and accordingly a reduction in that Family Payment. As a corollary, a reduction in the debt owed by Mr Browning to the Commonwealth would probably have resulted. Regard would have been had by the Department to sections 1069-H18 and H19 of the Act and a different Family Payment would have resulted because of the Department using different financial years and financial information upon which to calculate the correct rate of Family Payment.
Having determined that there is a debt owed by Mr Browning to the Commonwealth for the period 1 March 1997 to 6 November 1997, the Tribunal must now consider whether or not the debt is recoverable and accordingly turns to Part 5.4 of the Act. The Tribunal does not consider on the evidence available to it that there has been sole administrative error on the part of the Department and accordingly waiver is not available to Mr Browning under subsection 1237A(1) of the Act.
The Tribunal also does not consider that write-off is available to Mr Browning under section 1236 of the Act in that Mr Browning's whereabouts are known, the debt is able to be recovered by way of withholdings and there would be no benefit from applying section 1236 of the Act.
The Tribunal now turns to consider whether or not waiver of a part or whole of the debt is available to Mr Browning in special circumstances as is provided for in section 1237AAD of the Act.
Various tribunals and courts have discussed at length the concept of "special circumstances". The Tribunal generally takes the view that special circumstances must take into account a person's circumstances in combination. Each case must be examined on its merits and consideration given as to whether or not it would be unjust or unfair if the discretion contained in section 1237AAD of the Act were not invoked. The Tribunal also notes that special circumstances does not involve financial circumstances alone but a constellation of factors which may include administrative error on the part of the Department.
The Tribunal notes that Mr Browning has poor health as reported by Dr M Sanders, Mr Browning's general practitioner. The Tribunal notes that the problems arising out of stress have physical manifestations and Dr Sanders has foreshadowed that prolonging the stress would have major effects on Mr Browning's health as he has reached the limits of his capacity to cope (Exhibit A2). Currently, Mr Browning has sole responsibility for his two children in addition to a baby grandchild. He also has no assets apart from a car and some furniture and must manage financially to provide for his family, including for his rental accommodation.
The Tribunal finds that part of the debt is attributable to departmental administrative error in not having regard to the pay slips provided to the Department by Mr Browning. While the Tribunal acknowledges Mr Slattery's submission that the best person to provide estimates of income is the customer or claimant, the fact is that pay slips have been accepted as being provided to the Department. It was incumbent upon the Department to consider this additional information in its calculation of the correct rate of Family Payment payable to Mr Browning. That there is a discrepancy between the pay slips and the estimated income should have been noted and clarification of this sought from Mr Browning. If this had occurred, then the debt may have been reduced.
Having determined that there is some departmental administrative error, this does not detract from the responsibility required of Mr Browning to properly notify the Department of any changes in circumstances. Mr Browning was notified of his legislative responsibilities in a number of departmental notices, yet failed to comply with his obligations under the Act.
In all the circumstances, the Tribunal considers that there are special circumstances operating in Mr Browning's case arising out of his health, financial difficulties and the departmental administrative error such as to invoke the provisions of section 1237AAD of the Act. The Tribunal considers that it would be unfair, unreasonable and unjust in such circumstances not to apply section 1237AAD. Not to invoke section 1237AAD, would, the Tribunal determines, increase the stress upon Mr Browning which has been acknowledged by his medical practitioner as leading to grave consequences for him. In terms of his financial situation, Mr Browning is attempting to meet all of his responsibilities and to further impose this financial impost of recovery of the entire debt upon him would propel him into straightened financial circumstances. Such circumstances are just the type of situation which could be considered special and is envisaged by the provisions contained in section 1237AAD of the Act.
Accordingly, having decided that there are special circumstances present in Mr Browning's case, the Tribunal must now determine whether the debt should be waived in part or as a whole. For the reasons outlined above, the Tribunal considers that there is error on Mr Browning's and the Department's part. In such circumstances, the Tribunal determines that it would be inappropriate to waive the whole of the debt for the period 1 March 1997 to 6 November 1997. In such circumstances and acknowledging the part played by both Mr Browning and the Department in the development of this debt, the Tribunal determines that one quarter of the debt for the period 1 March 1997 to 6 November 1997 should be waived under section 1237AAD of the Act.
In all the circumstances and for the reasons outlined above the Tribunal decides under section 43 of the Administrative Appeals Tribunal Act 1975 to set aside the decision under review and to substitute its decision that:
There is an overpayment debt of Family Payment owed to the Commonwealth by Mr Browning for the period 1 August 1996 to 6 November 1997 but the debt should in waived in part or a whole for the following periods;
a) from 1 August 1996 to 28 February 1997 the Family debt is waived in its entirety; and
b) from 1 March 1997 to 6 November 1997 one quarter of the debt due to the Commonwealth is waived pursuant to section 1237AAD of the Act.

The matter should be remitted to the Secretary, Department of Family and Community Services for calculation of the debt which is non-recoverable.

I certify that the 71 preceding paragraphs are a true copy of the reasons for the decision herein of Ms S M Bullock
Signed:         .....................................................................................
  Associate
Date/s of Hearing  13 January 2000
Date of Decision  14 June 2000
Representative for the Applicant              Mr D J Browning - self represented
Representative for the Respondent        Mr B Slattery, Departmental Advocate