Colleen Glass and Secretary, Department of Social Services
[2015] AATA 311
•8 May 2015
[2015] AATA 311
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2014/4338
Re
Colleen Glass
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Senior Member J F Toohey
Dr Christopher Kendall, MemberDate 8 May 2015 Place Perth The Tribunal affirms the decision under review.
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Senior Member J F Toohey
CATCHWORDS – family tax benefit – overpayment – Centrelink error – whether applicant should have to repay the overpayment – whether applicant would suffer severe financial hardship if debt were not waived – whether any special circumstances – decision under review affirmed
Legislation
A New Tax System (Family Assistance) (Administration) Act 1999 ss 71(2), 95, 97(2), 97(3), 101
Cases
Stubbs and Secretary, Department of Family and Community Services [2003] AATA 729
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth and Secretary Department of Social Security (1995) FCA 1708
Angelakos v Secretary, Department of Employment and Workplace Relations (2007) FCA 25Davy and Secretary, Department of Employment and Workplace Relations 94 ALD 693
Secondary Materials
Family Assistance Guide
REASONS FOR DECISION
Senior Member J F Toohey
Dr C Kendall, MemberBackground
In June 2013, Colleen Glass applied to Centrelink for Family Tax Benefit (FTB). In the information she provided to Centrelink, she stated clearly that she had shared care of her two children with their father.
In October 2013, Centrelink paid Ms Glass FTB of $13,422.73 which included a lump sum payment for the 2011-2012 financial year. This amount was incorrect because Centrelink calculated Ms Glass’s entitlement for 2011-2012 as if she had sole care of her children.
On 22 November 2013, Centrelink wrote to Ms Glass advising that, on checking, it had been found that her entitlement had been calculated incorrectly and she had been overpaid $3553.86. Centrelink asked her to arrange to repay that amount. Ms Glass is currently making repayments of $15.00 each fortnight.
Ms Glass accepts she was overpaid but says there are special circumstances that mean she should not be required to repay the money. Centrelink accepts she was overpaid through no fault of her own but says she should nevertheless repay the money paid to her in error.
We have to decide whether Ms Glass should be required to repay the money paid to her in error.
For convenience, we will refer to the Secretary of the Department of Social Services as Centrelink.
When is a person not required to repay a debt?
The legislation concerning payment of family assistance, including FTB, is in the A New Tax System (Family Assistance) (Administration) Act 1999 (the Administration Act).
If a person receives an amount of family assistance greater than what they should have been paid, the amount of the overpayment is a debt to the Commonwealth: s 71(2). There is no dispute that Ms Glass was overpaid and has a debt to the Commonwealth.
Depending on the circumstances, a debt may be written off, meaning that recovery is in effect suspended, or waived, meaning that Centrelink forgoes recovery.
A debt may be written off if it is irrecoverable at law, or the debtor has no capacity to repay it, or the debtor’s whereabouts are unknown after all reasonable efforts to locate him or her, or it is not cost-effective for the Commonwealth to take action to recover the debt: s 95. As none of these applies to Ms Glass, her debt cannot be written off.
A debt, or part of a debt, must be waived in some cases, and may be waived in others.
Any part of a debt that is attributable solely to an administrative error by Centrelink must be waived if:
(a)the debtor received the payment in good faith and he or she would suffer severe financial hardship if it were not waived: s 97(2); or if
(b)Centrelink does not raise the debt within a certain period: s 97(3). (We are satisfied that this provision does not apply to Ms Glass).
Any or all of a debt may be waived if:
(a)it did not result wholly or partly from the debtor or another person making a false representation or failing or omitting to comply with a provision of the family assistance law; 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 the write off some or all of the debt: s 101.
Must the debt be waived?
14.There is no dispute that the whole of Ms Glass’s debt is due to an administrative error by Centrelink, or that she received the payment in good faith. We have to decide whether she would suffer severe financial hardship if the debt were not waived.
15.Ms Glass has provided written information about her financial circumstances, and she spoke to us at a hearing on 25 February 2015.
By way of background, Ms Glass was born in Eramble Mission in NSW and is one of a large Aboriginal family. She and her six siblings were taken from their parents and placed in care. Her first child, a daughter who was born when Ms Glass was 16, was raised by another family, and Ms Glass’s attempts to have her returned to her care were unsuccessful. She is in regular contact with her daughter who has schizophrenia and whose own children have been taken into care.
After her mother died, Ms Glass moved to Western Australia where she met her first husband. Her first son was born in 1978. Shortly afterwards, she separated from her husband. In 1981 she completed a bridging course at university after which she was employed as a research assistant with the then Department of Aboriginal Affairs. She subsequently held a number of State and Commonwealth government positions.
In 1983 Ms Glass was diagnosed with bi-polar disorder and hospitalised. After treatment she returned to work and bought her own home. In 1989 she completed a Bachelor of Arts (Social Sciences) and was employed in a range of government positions. After completing a Graduate Diploma in Secondary Education in 1996, she was employed as a full-time secondary teacher.
Ms Glass was hospitalised again in 1993 following a long custody dispute with her first husband. She married her second husband in 1996. She sold her house and they combined their assets to develop a property where she now lives. After the birth of her second son in 2000, Ms Glass did voluntary work. Her third son was born in 2002. Ms Glass was hospitalised again after the children started school. She continues to see her mental health case manager regularly and has regular support from a number of mental health professionals. Ms Glass also has a number of serious physical health problems including renal failure.
In 2009, Ms Glass’s second marriage ended. She was hospitalised again and spent a period homeless. She lost all her money and incurred large debts. In 2010, she was granted a Disability Support Pension. Throughout this time, she and her husband had shared care of their sons. In 2013, orders were made in the Family Court regarding the boys’ care. Ms Glass home schools her sons, both of whom have serious health problems. Their health-related expenses, as well as her own, are high.
Ms Glass told us that, when she received the FTB payment in 2013, she spent it on items for the boys that she had been unable to afford. After her period of homelessness she had to buy household goods and furniture, and the family home where she and her sons were living required extensive maintenance.
Ms Glass also supports her eldest son. Each Friday she travels some distance to his home where she helps him and his wife with household chores and caring for their children. The travel costs are considerable. She feels obliged to help him and people in her community when they ask.
Ms Glass has provided a detailed statement of her monthly income and expenditure. As of March 2015, she received $4265.93 each month comprising:
Disability Support Pension 1553.40
FTB 388.36
Child Support 2324.17
4265.93
Ms Glass estimates her monthly expenditure at $4479.00, including repayments of $30 each month to Centrelink. This amounts to a shortfall, on average, of $213 each month, or $49 each week.
Ms Glass told us that her husband has only recently started making regular child support payments. He pays the mortgage on the house where she and her sons live. Ms Glass is in the process of negotiating a property settlement with him from which she expects to receive the house and “a bit of cash”. Once that happens, she says, the house will be unencumbered but she will pay the rates. In the meantime, Ms Glass told us she is struggling financially. She pays her utilities through Centrepay and has had to rely on non-government agencies for assistance.
What is “severe financial hardship”?
The Administration Act does not define “severe financial hardship”. The Family Assistance Guide, which is published by the Department of Social Services to assist with decision-making, provides guidance only to the extent of stating that severe financial hardship should be decided on an individual basis, taking into account circumstances such as the composition of the family, income and expenses, the minimum amount expected for debt repayment under Centrelink guidelines, available funds, and exceptional expenses such as funeral expenses or pharmaceutical costs: at 1.1.S.45.
In Stubbs and Secretary, Department of Family and Community Services [2003] AATA 729 the Tribunal described “severe financial hardship” as “financial suffering of a severe or extreme nature”. We are not bound by other Tribunal decisions but that description accords with the ordinary meaning found in the Australian Oxford Dictionary[1] which defines “severe” as:
1 rigorous, strict. 2 serious, critical. 3 vehement or forceful. 4 extreme
[1] Australian Oxford Dictionary, Oxford University Press, 1999
We accept that Ms Glass’s financial circumstances are difficult but her monthly expenditure includes a number of items which might be considered desirable, and which many families pay for, but which, in our view might be reduced without causing her severe financial hardship. For instance, $530 each month is accounted for by items described as fitness program/sports, children’s pocket money, birthday and Christmas, and entertainment/discretionary/emergencies. Ms Glass acknowledges that her motor vehicle expenses of approximately $2958 each year (excluding petrol) are high because of the type of car she has. In saying this we take into account that she does not have to find rent or mortgage payments.
Ms Glass has been making repayments at the rate of $15 each fortnight by way of deductions from her Centrelink payments. We are not satisfied she will suffer severe financial hardship if she is not relieved of those repayments.
Should any or all of the debt be waived?
The second question is whether there are any special circumstances that mean that some or all of Ms Glass’s debt should be waived.
The meaning of special circumstances has been considered by the Tribunal and the courts on many occasions. Most decisions concern provisions in the Social Security Act 1991 but they are for all purposes in identical terms to the Administration Act.
32.The expression “special circumstances” is “by its very nature incapable of precise or exhaustive definition”. While not necessarily unique, circumstances must be “unusual, uncommon, or exceptional” such that they “have a particular quality of unusualness that permits them to be described as special”: Re Beadle and Director-General of Social Security (1984) 6 ALD 1 per Toohey J. See also Groth and Secretary Department of Social Security (1995) FCA 1708; Angelakos v Secretary, Department of Employment and Workplace Relations (2007) FCA 25.
In Davy and Secretary, Department of Employment and Workplace Relations 94 ALD 693, Deputy President Forgie said:
… “special circumstances” are not merely directed to the person’s own circumstances. Rather, they are directed to those that are “special circumstances ... that make it desirable to waive”. That necessarily requires a consideration of the person’s individual circumstances but also a consideration of the general administration of the social security system.
In Davy, there being no injustice or unfairness to the applicant that was not “visited, or potentially visited, upon all other recipients of social security payments”, the Tribunal was not satisfied it was desirable to waive the debt under s 1237AAD of the Social Security Act 1991.
In support of her application, Ms Glass has provided statements and reports documenting her long-standing illness and difficult personal circumstances. A statement from her mental health case manager who documents her chronic illness and the stress that relationship and financial pressures place on her. He states that her debt is detrimental to her mental and physical health. Her treating doctor states that waiving the debt would remove one stress from her life and reduce the risk of relapse. We have no reason to doubt what they say.
There is no question that Ms Glass faces difficult personal circumstances but, while uniquely her own, they are not unusual, uncommon or exceptional. Nor are we satisfied that it would be unfair or unjust to require her to repay the debt. We are satisfied that it is within Ms Glass’s means to make the minimal repayments required of her. In coming to this decision, we have taken into account that Ms Glass had the benefit of the money that was paid to her in error and that Centrelink discovered its error and notified her of it quickly.
Taking into account all of the information before us, we are not satisfied that there are special circumstances that make it desirable to waive Ms Glass’s debt.
For the reasons provided above we affirm the decision under review that Ms Glass is required to repay the overpayment.
39. I certify that the preceding 38 (thirty-eight) paragraphs are a true copy of the reasons for the decision herein of Senior Member J F Toohey and Dr C Kendall.
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Associate
Dated 8 May 2015
Date(s) of hearing
25 February 2015
Further submissions received
Representatives for the Applicant
20 March 2015
Mr Chris Belcher, Welfare Rights Advocacy Service
Representatives for the Respondent
Ms Allyson Ladhams, Australian Government Solicitor
Key Legal Topics
Areas of Law
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Social Security Law
Legal Concepts
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Overpayment Recovery
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Financial Hardship
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Special Circumstances
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