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

Clark and Secretary, Department of Social Services (Social services second review) [2022] AATA 3930 (21 November 2022)
Division: GENERAL DIVISION
File Number(s): 2021/8865
Re:Scott Clark
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

Decision
Tribunal:Senior Member Damien O’Donovan
Date:21 November 2022
Place:Canberra

The decision under review is varied as follows:
(a)The applicant was overpaid DSP in the amount of $79,463.07 between 17 August 2009 to 30 March 2020;
(b)The amounts overpaid to the applicant is a debt owed to the Commonwealth under section 1223(1) of the Act which cannot be waived.

..........................[sgd]..................................
Senior Member Damien O’Donovan
Catchwords
SOCIAL SECURITY – Disability Support Pension –– debt raised to recover overpayments – debtor failed to disclose he was a member of a same-sex couple – whether whole or part of debt should be waived – whether special circumstances exist to warrant a waiver of the debt – whether debtor gave misleading responses to questions – whether applicant made an honest mistake about his status based on advice prior to changes to the law concerning same-sex couples – debtor failed to comply with his statutory obligations – decision affirmed
Legislation
Administrative Appeals Tribunal Act 1975,
Social Security Act 1991, ss 1237AAD, 1237A, 1237D
Same-Sex Relationships (Equal Treatment in Commonwealth Laws – General Law Reform) Act 2008
Cases
Re Callaghan and Secretary, Department of Social Security (1996-97) 45 ALD 435
REASONS FOR DECISION
Senior Member Damien O’Donovan
21 November 2022
INTRODUCTION

Between 17 August 2009 to 30 March 2020 Mr Clark accumulated a debt to the Commonwealth as a consequence of being overpaid Disability Support Pension (DSP). The overpayment arose as a consequence of Mr Clark being paid DSP at the single rate, rather than being paid on the basis that he was in a same-sex de facto relationship (the partner rate being less generous). Mr Clark had been in a de facto relationship with his partner Mr Rush, since 1998. Mr Clark is seeking to have the debt waived.
Services Australia’s (the Agency) made the original decision to recover the debt. On 4 November 2021 a decision maker in the Social Security and Child Support Division of the AAT decided to affirm that decision (Tier 1 Review). The applicant exercised a right to seek review in the General Division of the Tribunal (Tier 2 Review) and this decision is the product of that application.
The applicant seeks waiver of the whole debt under section 1237AAD of the Social Security Act 1991 (Cth) (the Act).
In the alternative, the applicant seeks waiver of the debt accumulated between 17 August 2009 and 11 March 2013 (the 2013 Debt) under section 1237A of the Act.
Under section 1237AAD, I cannot waive the debt unless I am satisfied that the debt did not result wholly or partly from the debtor or another person making a false statement or misrepresentation.,
Under section 1237A, I must waive the proportion of a debt if it is attributable solely to an administrative error made by the Commonwealth and the debtor received the payments that gave rise to that proportion of the debt in good faith.
I am not satisfied that the statutory preconditions which would allow me to waive the debt are present. Accordingly, I have affirmed the decision under review. My reasons for the decision are as follows.
STATUTORY PROVISIONS
Section 1223 of the Act provides a framework which establishes when a debt is due to the Commonwealth.
The Act relevantly provides for circumstances in which a debt may be waived:
Section 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
(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.
Section 1237A Waiver of debt arising from error
(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.
(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 that 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.
OUTLINE OF THE ISSUE
The applicant seeks waiver of the whole of the debt on the basis that the debt arose as a consequence of him failing to pick up on a change in the social security law in 2009 which recognised for the first time same-sex de facto relationships. He did not make any false statements which resulted in the debt, and the change in the law, in combination with his difficult financial position, constitute special circumstances. In relation to the 2013 Debt, the applicant claims that the overpayment came about solely due to administrative error and he received the money in good faith.
The respondent on the other hand contends that:
(a)There is no part of the debt which is solely attributable to an administrative error made by the Commonwealth;
(b)The debt arose partly from the applicant or Mr Rush (who is his de facto partner and who often acted as his agent) knowingly making a false statement; and
(c)There are no special circumstances (other than financial hardship) which make it desirable to waive the debt.
EVIDENCE
The evidence before me consists of the T documents in these proceedings and in proceeding 2021/8939 as well as:
(a)Exhibit 1 – An email from Abbey Medley to Mr Rush dated 11 March 2022
(b)Exhibit 2 – Statement of Helen Bateman dated 3 May 2022
(c)Exhibit 3 – Statement of Melissa Nesbit dated 3 March 2022
(d)Exhibit 4 – A letter from Dr Sheahan Ranasinghe dated 10 March 2022
(e)Exhibit 4A – The attachment of the letter from Dr Sheahan Ranasinghe dated 10 March 2022
(f)Exhibit 5 – A letter titled ‘Your GP at Lyneham’ signed by Dr Sheahan Ranasinghe dated 10 March 2022
(g)Exhibit 6 – A letter from Nick Dennit dated 10 June 2021
(h)Exhibit 7 – Statement of financial circumstances in relation to Mr Rush and eleven attachments
(i)Exhibit 8 – Statement of financial circumstances of Mr Rush dated 14 January 2022
(j)Exhibit 9 – Documentation from Litigation Canberra dated 29 March 2022 which recalculates Mr Clark’s and Mr Rush’s debts
(k)Exhibit 10 - An uncompleted Claim for Newstart Allowance Form
(l)Exhibit 11 – An EANS document covering a period from 2018 to 2019
(m)Exhibit 12 – A set of bank statements provided by the applicant.
In addition to the documentary evidence, I also had the benefit of oral evidence given by Mr Clark and his partner Mr Rush.
FACTS
The following facts are based primarily on statements made by the applicant or his partner Mr Rush and the material held on Centrelink files. To the extent that any of the findings are controversial I have referenced the evidence on which they are based. Generally speaking, when the statements of Mr Clark or Mr Rush are inconsistent with material held on the Centrelink files I have preferred the documentary record of what occurred. Given the passage of time I do not consider that either Mr Clark or Mr Rush have a reliable memory of what they were telling Centrelink at the time or their state of mind when disclosing information.
In 1998 the applicant commenced a same-sex de facto relationship with Mr Rush. That relationship continues to this day.[1]
[1] [1] Applicant’s Supplementary Statement of Facts Issues and Contentions paragraph [8]
In the year 2000, Mr Rush attended a Centrelink office in Melbourne to obtain information regarding a payment he wished to apply for. He asked how he should classify his relationship with Mr Clark and was told that Centrelink didn’t have a category for same-sex couples and that Centrelink would treat Mr Clark and Mr Rush as ‘single’ for the purposes of calculating their Centrelink payments. That advice reflected the law as it was at the time.
In 2004 Mr Clark commenced receiving DSP.
On 1 July 2009 the Act was amended by the Same-Sex Relationships (Equal Treatment in Commonwealth Laws – General Law Reform) Act 2008 (the Amending Act). The Amending Act changed the definition of partner to include same-sex couples. As a matter of law, at that point Mr Clark and Mr Rush became partnered for the purposes of their Centrelink payments. I am satisfied that, despite Centrelinks’ public information campaign, neither Mr Clark nor his partner Mr Rush became aware of the change in the law at this point in time.
On 17 August 2009 Centrelink sent Mr Clark a letter setting out Centrelink entitlements which included a page notifying Mr Clark of matters which he was obliged to inform Centrelink of. The text of the letter is set out at ST21 p181 in Matter 2021/8865. The format of the letter however was different and more readable than what is presented in the T Documents. I am satisfied that it was received by Mr Clark in a form similar to T15 p 94 and 95. The letter included a section – What you have to tell Centrelink. It included the following statement:
You must tell Centrelink within 14 days (28 days if residing outside Australia) if any of the things listed below happen or are likely to happen to you:
You must tell us if you are:
… in or commence a registered or a de facto relationship (either opposite or same-sex)
Mr Clark may not have read this document as he relied on his partner Mr Rush to deal with administrative matters relating to Centrelink, but at this point there was material available to Mr Clark to alert him to the change in the law. If he had read the instructions and notified Centrelink as required, the overpayment would have been avoided.
Following Centrelink’s letter of 17 August 2009, Centrelink sent further notices to Mr Clark which continued to inform him that he was obliged to tell Centrelink, within 14 days, if he was in or had commenced a de facto relationship. These notices were sent on:
(a)9 September 2009[2];
[2] ST23/186-193
(b)1 February 2010[3];
[3] ST25/194-197
(c)27 April 2010[4];
[4] ST27/199-202
(d)25 May 2010[5];
[5] ST28/203-204
(e)2 August 2010[6];
[6] ST29/205-208
(f)25 October 2010[7];
[7] ST31/210-213
(g)30 November 2010[8];
[8] ST32/214-215
(h)17 January 2011[9];
[9] ST33/216-219
(i)11 April 2011[10];
[10] ST34/220-223
(j)11 March 2013[11];
[11] T15/94-95
(k)12 September 2013[12];
[12] T18/101-102
(l)7 March 2014[13];
[13] T28/121-123
(m)12 May 2014[14];
[14] T34/131-133
(n)30 July 2014[15];
[15] T37/137-139
(o)4 February 2015[16];
[16] T39/141-143
(p)5 August 2015[17];
(q)3 February 2016[18];
(r)9 August 2016[19];
(s)4 April 2017[20];
(t)6 October 2017[21];
(u)6 April 2018[22];
(v)8 October 2018[23];
(w)8 April 2019[24];
(x)18 May 2019[25];
(y)29 October 2019[26]
[17] T43/149-151
[18] T45/153-155
[19] T46/156-158
[20] T47/159-161
[21] T48/162-164
[22] T49/165-167
[23] T51/170-172
[24] T52/173-175
[25] T54/177-179
[26] T55/180-182
On 24 September 2012 Mr Clark filled in and signed a Centrelink form entitled ‘Rent Certificate’. In this form, Mr Clark was asked to provide details as to his living arrangements and partner status. Partner was defined on the form to include married, registered partner, de facto of the opposite sex or same sex. In the form, Mr Clark disclosed that he shared his accommodation with Mr Rush and his relationship to Mr Rush was a ‘carer’ relationship. Mr Clark replicated this characterisation of his relationship with Mr Rush in an identical form signed on 19 May 2014[27].
[27] T36/135-136
On 4 October 2012 Centrelink sent Mr Clark a letter entitled ‘Income Statement’ which set out Mr Clark’s past and future entitlements and payments. The letter also included a statement ‘Customer Partnered – N’. The letter also included the following text:
If you believe any of these details are incorrect, please contact us.
Following Centrelink’s letter of 4 October 2012, Centrelink sent further letters entitled ‘Income Statement’ to Mr Clark which continued to inform him that if he believed any of the details were incorrect, including the information regarding his partnered status, he was to inform Centrelink. These notices were sent on:
(a)1 December 2012[28];
[28] T8/79-80
(b)3 January 2013[29];
(c)23 January 2013[30];
(d)25 January 2013[31]
(e)26 September 2013[32];
(f)1 October 2013[33];
(g)24 April 2014[34];
(h)26 February 2015[35];
(i)2 March 2015[36];
(j)11 September 2018[37]; and
(k)30 March 2020[38].
[29] T12/88-89
[30] T13/90-91
[31] T14/92-93
[32] T20/106-107
[33] T21/108-109
[34] T33/129-130
[35] T41/145-146
[36] T42/147-148
[37] T50/168-169
[38] T57/186-187
On 12 May 2014 Mr Clark contacted Centrelink regarding his change of address and accommodations details for his DSP[39]. Mr Rush, as the Applicant’s nominee, reported the following living arrangements effective from 30 April 2014:
Moved in:
Name: STEPHEN RUSH
Relationship: Friend/housemate
Customer indicated they:
Lived together as a couple? No
Considered a couple when participating in joint activities? No
[39] T68
On 17 May 2019 Mr Rush, as the Mr Clark’s nominee, contacted Centrelink regarding a change of address and accommodation details for Mr Clark’s DSP. Mr Rush reported the following living arrangements effective from 3 May 2019:
The following sharers have moved in:
Name: Stephen Rush
Start date: 03.05.2019
Relationship: OtherCarer (sic)
On no occasion, on receipt of any of the notices or letters sent by Centrelink mentioned above or on any Centrelink forms completed by Mr Clark or his agent Mr Rush, did Mr Clark inform Centrelink of his partnered status or that he was in a de facto relationship with Mr Rush. On 31 March 2020 Mr Rush filled in and signed a Centrelink form entitled ‘Partner details’.[40] This form was also signed by Mr Clark. In the form, Mr Rush disclosed that he had been in a de facto relationship with Mr Clark since 30 June 1998.
[40] T58/188-204
Following the application for Tier 2 review the respondent was provided with more details concerning Mr Rush's earnings over the period when he was receiving Carers Payment.[41] During the period 28 August 2018 to 30 March 2020, Mr Rush earned more income from his employer Able Australia than he declared.[42] This necessitated the recalculation of Mr Clark’s debt. As a consequence of that recalculation his debt increased from $74,741.11 to $79,463.07.[43]
[41] ST 1
[42] ST 2
[43] ST 2 p 11
CONSIDERATION
The applicant concedes that since 1998 he has been in a de facto relationship with Mr Rush. Consequently, after the law change in 2009 to recognise same sex relationships, he was only entitled to be paid DSP at the partnered rate.
Mr Clark received an overpayment of his DSP as a result of not declaring his relationship status from 17 August 2009 to 30 March 2020. The amount of the overpayment calculated has changed each time the matter has been reviewed. At Tier 1 the overpayment was calculated to be $74,741.11. However, since the Tier 2 application has been filed, Centrelink has identified a further error in the calculations arising from Mr Rush failing to declare correctly his income since resuming work on 28 August 2018. There was evidence given by Mr Rush that he always declared accurately his income from the relevant employer, Able Australia, but having reviewed the payslips and bank records provided I am satisfied that is not the case. When the overpayment is recalculated taking Mr Rush’s additional income into account it results in an overpayment amount of $79,463.07[44] for the period from 17 August 2009 to 30 March 2020.
[44] ST2 p 11
The Tribunal is satisfied that Mr Clark received numerous letters and notices from Centrelink, copies of which were given to the Tribunal, which provided Mr Clark with notice that he was required to inform Centrelink of his circumstances, including whether he was in a de facto relationship and/or was living with someone as their partner.
The Tribunal is satisfied that Mr Clark did not comply with his notification obligations and inform Centrelink of his relationship status. If he had done so, his DSP would have been paid at the correct rate. As Mr Clark has been paid an amount that he was not entitled to obtain, pursuant to section 1223(1) of the Act, the amount of the payment is a debt due to the Commonwealth and the debt is taken to arise when the person obtained the benefit of the payment. I am satisfied Mr Clark was overpaid $79,463.07 in DSP for the period 17 August 2009 to 30 March 2020 and that such an amount is a debt due to the Commonwealth under subsection 1223(1) of the Act.
Should the debt be waived?
The Act contains provisions which allow, in certain circumstances, for a debt that is due to the Commonwealth to be waived or written off. The applicant seeks to have the whole of the debt waived under section 1237AAD or alternatively to have the 2013 Debt waived under section 1237A.
Whether the debt can be waived
Section 1237 of the Act allows a debt owed to the Commonwealth to be waived. When a debt is waived, the debt that is owed essentially ceases to exist and the recovery of that debt cannot occur. A waiver can occur in a number of different circumstances, relevantly in this matter, by reason of administrative error (s1237A) and in special circumstances (s1237AAD).
Section 1237A relevantly provides:
Administrative error
(1)Subject to subsection (1A), the Secretary must waive the right to recover the portion 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
The Tribunal is not satisfied that the debt is ‘attributable solely to an administrative error made by the Commonwealth’. Taking the applicant at his word, the debt arose because he did not realise that the law had changed in 2009 and that he was now regarded as being a partner in a de facto relationship. I am satisfied that the applicant did receive notices that advised him of the change in the law and the need to update his status. If the applicant had read the notices that were being sent to him and which were telling him what he needed to report and on what basis, he would have realised he needed to submit information to Centrelink to ensure that his DSP was properly calculated. In these circumstances it was the applicant’s failure to read Centrelink’s notices and report in accordance with them, that resulted in the overpayment. That cannot be described as an overpayment ‘attributable solely to an administrative error made by the Commonwealth’. The Commonwealth was calculating the applicant’s DSP on the basis of the information it was receiving. The information it was receiving was incorrect and was not appropriately updated.

In these circumstances, the Tribunal cannot waive the debt pursuant to s1237A.
Whether debt can be waived in special circumstances?
Section s1237AAD provides that a debt can be waived 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
(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.
In Re Callaghan and Secretary, Department of Social Security (1996-97) 45 ALD 435 at [48] discussed the meaning of ‘knowingly’, which is not defined in the Act. The Tribunal observed:
There is nothing in section 1237AAD which suggests the word “knowingly” should be given any meaning other than that a person has actual knowledge, rather than constructive knowledge, that he or she is making a false statement or representation or that he or she is failing or omitting to comply with a provision of the Act. That actual knowledge is to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time and to events surrounding the false statement or the act or omission.
The Applicant contends that the debt should be waived on the basis that he never made a false statement to Centrelink about his relationship but simply was not aware that a change in the law meant that he was now regarded as being a member of a couple.
On the evidence before me I am note satisfied that that is the case. The applicant was asked by Centrelink on a number of occasions about the nature of his relationship with the person he shared accommodation with. On multiple occasions he sought to obscure the nature of the relationship by describing Mr Rush as his carer or as his friend.[45] In my assessment the attempt to obscure the relationship appears to have been deliberate and therefore the applicant knowingly made false statements about the relationship. If the applicant had disclosed the nature of his relationship on any of the forms he submitted to Centrelink, I am satisfied that Centrelink would have adjusted the DSP payments to reflect that disclosure. In these circumstances I am not satisfied that the debt did not partly result from the applicant making false statements to Centrelink about his relationship with Mr Rush.
[45] See for example T5 or T36
Consequently, the preconditions for waiving the debt are not present.
Decision
The decision under review is varied as follows:
(a)The applicant was overpaid DSP in the amount of $79,463.07 between 17 August 2009 to 30 March 2020;
(b)The amounts overpaid to the applicant is a debt owed to the Commonwealth under section 1223(1) of the Act which cannot be waived.
.

I certify that the preceding 41 (forty one) paragraphs are a true copy of the reasons for the decision herein of Senior Member Damien O’Donovan.

.............................[sgd]...........................................
Associate
Dated: 21 November 2022

Date(s) of hearing: 1 & 14 July 2022

Applicant: Self-represented

Solicitor for Respondent:
Dr Stephen Thompson, Sparke Helmore & Ms Amy Simpson, Services Australia

[2022] AATA 3930

21 November 2022

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Standing

Procedural Fairness

Statutory Construction

Remedies

Appeal

Date(s) of hearing:	1 & 14 July 2022
Applicant:	Self-represented
Solicitor for Respondent:	Dr Stephen Thompson, Sparke Helmore & Ms Amy Simpson, Services Australia