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

Administrative Appeals Tribunal
ADMINISTRATIVE APPEALS TRIBUNAL )
) No: 2016/6314

General Division )
Re: Stephen Cook

Applicant
And: Secretary, Department of Social Services
Respondent
CORRIGENDUM
TRIBUNAL:              Member D K Grigg
DATE:   8 August 2017
PLACE:                    Brisbane

The Tribunal directs the Registrar, pursuant to subsection 43AA(1) of the Administrative Appeals Tribunal Act 1975, to alter the text of the decision in this application:

Paragraph 39 is amended to read as follows:
“Mr Cook does not have capacity to pay the outstanding balance of the PP Debt and FTB Debt and therefore they should be written off pursuant to section 95(2) of the Administration Act and section 1236(1A) of the Social Security Act.”

The heading before paragraph 41 “Conclusion – Write-Off” is deleted.

Paragraph 41 is deleted.

Paragraph 62 is amended to read as follows:
“The outstanding balance of the PP Debt and FTB Debt, totalling $1,834.99, which arose during the period of 18 September 2015 and 12 October 2015, should be written off pursuant to section 95(2) of the Administration Act and section 1236(1A) of the Social Security Act.

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Member D K Grigg

Cook and Secretary, Department of Social Services (Social services second review) [2017] AATA 1236 (2 August 2017)
Division:GENERAL DIVISION
File Number: 2016/6314
Re:Stephen Cook
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

Decision
Tribunal:Member D K Grigg
Date:2 August 2017
Place:Brisbane

The Tribunal sets aside the decision under review.
..................................[Sgd]......................................
Member D K Grigg
Catchwords
FAMILY ASSISTANCE – family tax benefit – parenting payment – overpayment – where no administrative error – where no special circumstances – decision under review set aside
Legislation
A New Tax System (Family Assistance) Act 1999
A New Tax System (Family Assistance) (Administration) Act 1999
Social Services Act 1991 (Cth)
Cases
Beadle and Director-General of Social Security (1984) 6 ALD 1
Gammaldi and Secretary, Department of Social Services [2016] AATA 1028
Groth v Secretary Department of Social Security [1995] FCA 1708
Riddell v Secretary, Department of Social Security [1993] FCA 261; (1993) 42 FCR 443
Secretary, Department of Social Security v Hales [1998] FCA 219; (1998) 82 FCR 154
Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones [2012] 89 ATR 267; [2012] FCA 639
Secretary, Department of Family & Community Services v Sekhon [2003] FCA 76
Secretary to the Department of Family & Community Services v Allan [2001] FCA 1160
Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190
Ward v Commissioner of Taxation [2016] FCAFC 132
Secondary Materials
Guide to Social Security Law, the Family Assistance Guide (2017, Cth)
REASONS FOR DECISION
Member D K Grigg
2 August 2017
INTRODUCTION & CLAIM HISTORY

Between 18 September 2015 and 12 October 2015 Mr Cook was paid a family tax benefit (FTB) and parenting payment (PP).[1] On 21 September 2015, Ms Proctor, Mr Cook’s former partner, advised the Department of Human Services (“Centrelink”) that she had separated from Mr Cook on 18 September 2015 and that their children had not been in Mr Cook’s care since that date.[2] On 21 October 2015, Mr Cook advised Centrelink that he had separated from Ms Proctor on 30 August 2015 and the children were no longer in his care.[3]
[1]           Exhibit 1, T Documents, T34, pages 136 – 137, Debt Calculation.
[2]           Exhibit 1, T Documents, T6, pages 38 – 44, Extract of Ms Proctor's Claim for Family Tax Benefit and Childcare
Benefit dated 22 September 2015.
[3]           Exhibit 1, T Documents, T9, pages 49 – 51 Claim for New Start Allowance dated 21 October 2015.
Given that Mr Cook no longer had any dependent children under 6 years of age living with him, his PP and FTB was cancelled on 21 October 2015.[4]
[4] Exhibit 1, T Documents, T7, pages 45 to 46, Letter from Centrelink to Mr Cook regarding cancellation of
parenting payment dated 21 October 2015; T8, pages 47 – 48, Letter from Centrelink to Mr Cook regarding cancellation of family assistance payments dated 21 October 2015.
In December 2015, Centrelink determined that Mr Cook had separated from Ms Proctor on 18 September 2015 and had therefore been in receipt of FTB and PP in a period (that is between18 September 2015 and 12 October 2015) in which he was not entitled to that money. As a result on 22 December 2015, Centrelink raised an FTB debt in the amount of $1828.80 (FTB Debt)[5] and a PP debt of $949.58 (PP Debt).[6]
[5] Exhibit 1, T Documents, T 11, pages 56 – 57, Determination: Account Payable for Family Tax Benefit
Overpayment dated 22 December 2015.
[6] Exhibit 1, T Documents, T10, pages 54 – 55, Determination: Account Payable for Parenting Payment
Overpayment dated 22 December 2015.
On 23 December 2015, Mr Cook confirmed with Centrelink that he had separated from Ms Proctor on 19 September 2015, not 30 August 2015 as he had previously advised.[7]
[7] Exhibit 1, T Documents, T 13, pages 66 – 72, Claim for Family Tax Benefit dated 23 December 2015.
On 5 January 2016, Ms Proctor informed Centrelink that she had entered into a parenting plan agreement with Mr Cook which commenced on 26 December 2015.[8] Pursuant to the parenting plan, executed by both Mr Cook and Ms Proctor in December 2015, it was agreed that the children of the relationship would live with Ms Proctor and that Mr Cook would spend one weekend a month with his children.[9] On 6 January 2016, Mr Cook provided Centrelink with a childcare arrangement details form in which he indicated that the date of separation from Ms Proctor was 15 October 2015 and confirmed that he had entered into a parenting plan with Ms Proctor which commenced on 26 December 2015.[10]
[8]           Exhibit 1, T Documents, T 14, pages 73 – 84, Childcare Arrangements Details Form completed by Ms Proctor
dated 5 January 2016.
[9]           Exhibit 1, T Documents, T 12, pages 58 – 65, Parenting Plan Agreement dated 23 December 2015.
[10]         Exhibit 1, T Documents, T 15, pages 85 – 93, Childcare Arrangements Details Form completed by Mr Cook dated
6 January 2016.
On 6 January 2016, Ms Tammy Gosling, Mr Gary Cook and Ms Marrianne Cook provided letters in which they all stated that the children of the relationship had been in Mr Cook’s care since 26 December 2015 at his place of residence.[11] On 11 January 2016, Ms Felicity Borg, St Mary’s Conference of the Society of St Vincent De Paul, wrote a letter to say that the children had been in Mr Cook’s full-time care and that he had been in contact with St Vincent De Paul, in November and December 2015, for support and assistance as he was in dire financial stress supporting himself and his 4 children on Newstart benefit.[12]
[11] Exhibit 1, T Documents, T 16, page 94, Letter from Tammy Gosling dated 6 January 2016; T 17, page 95, Letter
from Mr Gary Cook dated 6 January 2016; T 32, page 134, letter from Marrianne Cook.
Exhibit 1, T Documents, T 18, page 96, Letter of support from Ms Felicity Borg of Society of St Vincent De Paul dated 11 January 2016.
As a result of the information provided by Mr Cook to Centrelink in January 2016, Centrelink wrote to Ms Proctor informing her that Mr Cook had advised that she had no children in her care and to provide additional information so that Centrelink could ensure she was receiving the correct amount of FTB and income support payment.[13]
[13] Exhibit 1, T Documents, T 19, pages 97 – 98, Letter from Centrelink to Ms Proctor dated 5 April 2016.
On 18 April 2016, the Federal Circuit Court made orders that, until such time as Mr Cook relocated to where Ms Proctor resided, that Mr Cook would only have access to his children one weekend a month.[14]
[14] Exhibit 1, T Documents, T 20, pages 99–104, Parenting Orders of the Federal Circuit Court dated 18 April 2016.
Mr Cook sought a review of Centrelink’s original decision to raise the FTB Debt and PP Debt by an Authorised Review Officer (“ARO”). The appeal to the ARO was unsuccessful. The ARO found that no “special circumstances” existed to waive the debts.[15] Mr Cook then lodged an application for review with the Social Services and Child Support Division (“SSCSD”) of this Tribunal. The SSCSD rejected Mr Cook’s claim and affirmed the ARO’s decision on 25 October 2016.[16]
[15] Exhibit 1, T Documents, T 23, pages 114 – 119, Decision of Authorised Review Officer and notes dated 21 June
2016.
[16] Exhibit 1, T Documents, T 3, pages 6-9, SSCSD’s Decision and Reasons for Decision dated 25 October 2016.
Mr Cook has sought a review of the SSCSD’s decision by this Tribunal and submits that he is in financial hardship and/or that special circumstances exist such that the debts should be written off or waived.[17]
[17] Exhibit 1, T Documents, T 2, pages 3-5, Application for Review dated 18 November 2016.
ISSUES FOR DETERMINATION
The issues for determination are whether or not:
(a)Mr Cook has been overpaid PP and FTB;
(b)the PP Debt and FTB Debt are recoverable; and, if yes
(c)the PP Debt and FTB Debt should be written off; or
(d)the PP Debt and FTB Debt should be waived due to administrative error; or
(e)“special circumstances” exist such that the PP Debt and FTB Debt should be waived.
For the reasons set out below, I have set aside the decision under review. Circumstances exist such that the PP Debt and FTB Debt should be written off.
WAS Mr Cook OVERPAID PP and FTB PAYMENTS?
Pursuant to section 22 of the New Tax System (Family Assistance) Act 1999 (“Family Assistance Act”), entitlement to FTB is dependent upon a person having an FTB child. If an individual's percentage of care for a child during a care period is less than 35%, the child is taken not to be an FTB child: section 25 of the Family Assistance Act. Schedule One of the Family Assistance Act sets out how the rate of a parent’s FTB is determined. That rate will depend in part on the parent shared care percentage under section 59 of the Family Assistance Act.
Pursuant to section 500 of the Social Security Act 1991 (Cth) (“the Social Security Act”), entitlement to PP is dependent upon a person having a PP child. One of the criteria of someone who has a PP child is that they are the principal carer of that child: section 500D of the Social Security Act.
Despite the fact that Mr Cook had previously advised a different date of separation from that of Ms Proctor, Mr Cook and the Respondent confirmed that there is no longer any dispute that the date of separation was 18 September 2015.
Once Centrelink became aware that Mr Cook had been separated from Ms Proctor from 18 September 2015, and that the children of the relationship were no longer in his care, the FTB and PP payments to Mr Cook were cancelled and Centrelink raised the FTB Debt and PP Debt.
Section 71 of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (“Administration Act”) and section 1223 of the Social Security Act provide that overpaid FTB and PP debts are debts due to the Commonwealth.
Mr Cook does not dispute the calculations of the amounts of the PP Debt and FTB Debt.
ARE the PP debt and ftb DEBT RECOVERABLE?
Even if a debt is owed, the Secretary may write off, or waive, a debt in certain circumstances (see sections 1236, 1237A and 1237AAD of the Social Security Act; sections 95, 97 and 101 of the Administration Act).
Should the PP Debt and FTB Debt be written off?
The Secretary may write off a debt in certain circumstances set out in sections 95(2) of the Administration Act and section 1236(1A) of the Social Security Act. Those sections provide that a debt may be written off, relevantly, where:
(a)the debt is irrecoverable at law; or
(b)the debtor has no capacity to repay the debt; or
(c)it is not cost effective for the Commonwealth to take action to
recover the debt.
A debt is taken to be irrecoverable at law if, and only if there is no proof of the debt capable of sustaining legal proceedings for its recovery: section 1236(1B) of the Social Security Act; section 95(3) of the Administration Act.
If a debt is recoverable by means of (section 1236(1C) of the Social Security Act; section 95(4) of the Administration Act):
(a)deductions under section 84 of the Family Assistance Act; or
(b)deductions under section 1231 of the Social Security Act; or
(c)setting off under section 84A Family Assistance Act; or
(d)application of an income tax refund under section 87 Family Assistance Act; or
(e)setting off under section 87A Family Assistance Act against a payment referred to in paragraph 82(2)(a);
the person is taken to have a capacity to repay the debt unless recovery by those means would cause the person severe financial hardship.
(my emphasis)
Is the debt irrecoverable at law? (section 95(3), Administration Act; section 1236, Social Security Act)
None of the circumstances set out in section 95(3) and section 1236(1) exist in this case and therefore I find the debt is not irrecoverable at law.
Does Mr Cook have the capacity to repay the debt? (section 95(4), Administration Act; section 1236(1C), Social Security Act)
If a debt is recoverable by means of deductions from social security payments, income tax refunds or family assistance payments, the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship.
The issue is whether Mr Cook is suffering from “severe financial hardship”.
Between May 2016 and June 2017 Mr Cook had been repaying the debt by way of fortnightly deductions of $15.00 from his Newstart allowance.[18]
[18] Exhibit 2, Secretary's Statement of Facts, Issues and Contentions dated 26 May 2017, Attachment A Centrelink
Customer Record; Secretary’s Supplementary Statement of Facts and Contentions dated 10 July 2017,
Attachment D, Centrelink records.
The Secretary submits that Mr Cook is not suffering from severe financial hardship and has a clear capacity to repay the debt by instalments deducted from his fortnightly Newstart payments.[19] The Secretary referred the Tribunal to previous Tribunal decisions where it has been found that severe financial hardship needs to involve severe or extreme financial suffering and that a person’s entire financial position would need to be materially less than the current rate of their pension.[20]
[19] Exhibit 2, Secretary’s Statement of Facts, Issues and Contentions dated 26 May 2017, para 29.
[20] Re Lumsden and Secretary, Department of Social Security [1986] AATA 228; Stubbs and Secretary, Department
of Family and Community Services [2003] AATA 729; L and Department of Social Security [1995] AATA 159;
Secretary, Department of Family and Community Services and Birgden [2003] AATA 67.
On 8 September 2016, Mr Cook provided a Statement of Financial Circumstances which set out that he was receiving $666.80 per fortnight in Centrelink payments and had expenses of $510/fortnight for rent, $50/fortnight for electricity and $40/fortnight for telephone costs. Mr Cook also said that he had a National Australia Bank credit card debt with a balance owing $13,295 and a loan from Celtic Credit Corp for which he paid $20 a fortnight.[21] As at September 2016 Mr Cook told the Tribunal that the National Australia Bank had suspended his obligation to make contributions towards the credit card debt, because he was in financial hardship, but that the obligation has now been reinstated and he currently paying $20/fortnight.
[21] Exhibit 1, T Documents, T 27, pages 124 – 128, Statement of Financial Circumstances prepared by Mr Cook
dated 8 September 2016.
The Electronic File Records of Centrelink record that in January 2016 Mr Cook told Centrelink that he was experiencing financial hardship.[22] Between December 2015 and June 2016, Mr Cook advised Centrelink that he was having ongoing Family Court issues regarding the parental arrangements for his children and that his ex-partner had been taking money out of his account to provide care for his children. Mr Cook also said he was paying rent on his ex-partner’s accommodation because his children were living there. In May 2016, Mr Cook told Centrelink that he was currently not receiving any FTB payments and that having his children in his care on occasion has been placing him in further financial hardship and he requested that the debt repayments be lowered.[23]
[22] Exhibit 1, T Documents, T 37, page 159, Electronic File Notes (Centrelink).
[23] Exhibit 1, T Documents, T 37, page 163, Centrelink records.
On 10 June 2016, Mr Cook advised Centrelink that in September 2015 he was away from home on a road trip but continued to pay the rent to support his children and his partner continued to have access to his bank account and she used those funds to pay bills and for food. Mr Cook said he returned home in October 2015 and he and Ms Proctor separated. Mr Cook then moved into a caravan park and took his name off the lease of their family home. Mr Cook said that half the bond money was returned to him so he then signed a lease at the caravan park. Mr Cook says he did not have any access to his children until December 2015 at which point he and Ms Proctor executed the parenting plan which entitled him to have access to his children for half the school holidays and one weekend a month. Mr Cook told Centrelink that in or around 24 March 2016 he again had access to his children and that he filed a notice of risk with the Federal Circuit Court as he was concerned for the safety of his children. On 18 April 2016, the Federal Circuit Court ordered that he return the children to their mother. Mr Cook said he decided to move back to Gympie on 16 June 2016 which meant that he would have access to his children every 2^nd weekend.[24] Mr Cook says he continued to pay all the bills including rent and food until October 2015. Mr Cook also told Centrelink that he had been a victim of domestic violence and had filed an apprehended violence order application against Ms Proctor and she had done the same to him.[25]
[24] Exhibit 1, T Documents, T 37, page 165, Centrelink records.
[25] Exhibit 1, T Documents, T 37, page 174, Centrelink records. See Exhibit 1, T documents, T 25 – T 26, pages 1 to
2 – 123, Protection Orders made by Ms Proctor and Mr Cook dated 17 August 2016.
In Mr Cook’s application for review by this Tribunal Mr Cook says that after he has paid off expenses each fortnight he only has $46.80 remaining and this does not include the debt recovery by Centrelink and a $34/month re-payment on a loan. Mr Cook says he sees his children every alternate weekend and half of the school holiday period and that during those visits he needs to make his New Start payments stretch to cover his children’s needs as well as his own, including any medical expenses. Mr Cook says he also has legal expenses (in relation to his court actions and the domestic violence order applications). I note that Mr Cook was self represented in those court proceedings, however, Mr Cook says that he still had to pay for his initiating court application, for the full-time care of his 4 children and he is trying to seek legal representation.[26]
[26] Exhibit 1, T Documents, T 2, pages 3 – 5, Application for Review of Decision dated 18 November 2016.
Mr Cook contends that those circumstances demonstrate that he is suffering from severe financial hardship and that the PP Debt and FTB Debt should be waived.
Mr Cook clearly had some significant financial difficulties in the past – for example, I note that in November and December 2015 Mr Cook sought assistance (in terms of food vouchers, beds and linen) from St Vincent De Paul.[27] This indicates that at that time Mr Cook was in significant, if not severe financial hardship.
[27] Exhibit 1, T Documents, T 18, page 96, Letter of support from Ms Felicity Borg of Society of St Vincent De Paul dated 11 January 2016

Since 8 June 2016, Mr Cook’s FTB payments have increased and he is now receiving $986/fortnight, which is $300 more per fortnight than he was receiving in September 2016. The amount of FTB Mr Cook is now receiving reflects the fact that the parenting plan originally entered into between Mr Cook and Ms Proctor has been discharged and the Federal Circuit Court has now ordered that Mr Cook have equal shared parental responsibility for the children of the relationship.[28]
[28] Secretary’s Supplementary Statement of Facts and Contentions dated 10 July 2017, Attachment B,
Court Orders made by the Federal Circuit Court on 21 March 2017.
Mr Cook is managing to house himself and to care for his children when he has access to them. At the hearing, Mr Cook told the Tribunal that the increase in payments from Centrelink will allow him to start clearing some debts and he thinks he will be left with approximately $30 – $40/fortnight once he has paid all his expenses and debt obligations.
However, subsequent to the hearing, the Secretary provided up-to-date Centrelink customer records which indicate that Centrelink has recognised that Mr Cook is experiencing financial hardship and as a result it has written off recovery of the debts for the period 26 June 2017 to 29 September 2017.[29] The records show that the balance owing prior to write off action is $1834.99. Mr Cook informed Centrelink that he currently has no income and is just receiving Newstart allowance and FTB, has high rent and expenses and is unable to afford repayments. Centrelink records set out that Mr Cook’s gross fortnightly income is $1002.08 with total deductions of $974.31. In addition, Centrelink notes that Mr Cook still has many other expenses such as phone bills, school uniforms and transportation. As a result of this information provided by Mr Cook, Centrelink determined that Mr Cook was experiencing financial hardship.
[29] Secretary’s Supplementary Statement of Facts and Contentions dated 10 July 2017, Attachment D, Centrelink
records.
I find that the evidence supports a finding that Mr Cook suffers from severe financial hardship. I note that this finding is also consistent with the current view of Centrelink and with the Guide to Social Security Law, which is used by Centrelink, and sets out in section 1.1.S.45 that:
For the purpose of considering a waiver or a write-off, or reducing or suspending recovery of an FTB advance a person would be subject to severe financial hardship if their net fortnightly income (after reasonable expenses are deducted from gross income) over the debt repayment period (for both debts and advance recovery) would be less than the minimum fortnightly amount the person would be allowed to repay under the flexible repayment arrangements for FA debts.
The Tribunal is not bound to apply the Guide but it may, and it should, apply it in exercising its discretion unless it is unlawful or “tends to produce an unjust decision”.[30]
[30] Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634, at 645.
Mr Cook does not have capacity to pay and therefore the PP Debt and FTB Debt should be written off pursuant to sections 95(2) of the Administration Act and section 1236(1A) of the Social Security Act.
Is it cost-effective for the Commonwealth to recover the debt? (1236(1A)(d), Social Security Act; section 95(2)(d), Administration Act)
There is no indication from the Secretary that it is not cost-effective for it to recover the debt.
Conclusion – Write-Off
There is no basis for the PP Debt or the FTB Debt to be written off under section 95 of the Administration Act or section 1236 of the Social Security Act.
SHOULD THE PP DEBT AND FTB DEBT BE WAIVED DUE TO ADMINISTRATIVE ERROR (SECTION 97, ADMINISTRATION ACT; SECTION 1237A, SOCIAL SECURITY ACT)
The Secretary must also 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: section 97 of the Administration Act; section 1237A of the Social Security Act.
If administrative error was the sole cause for the debt arising, the Secretary must waive the right to recover the debt. The debt “must be "attributable solely" to administrative error. It is not enough that, in the absence of administrative error, the debt would not have arisen. Administrative error must be the sole cause, not merely one of multiple causes: Secretary, Department of Family & Community Services v Sekhon[2003] FCA 76, per Wilcox J (at [41]) and on appeal to the Full Federal Court Sekhon v Secretary, Department of Family and Community Services[2003] FCAFC 190, at [23].
The PP Debt and FTB Debt arose due to a reconciliation by Centrelink of the PP and FTB amounts paid to Mr Cook during a time when he was not eligible to receive those payments. Mr Cook does not dispute the reconciliation calculations.
The PP Debt and FTB Debt did not arise solely from, or in relation to any, administrative error.
There is no basis for the PP Debt and FTB Debt to be waived under section 97, Administration Act or section 1237A of the Social Security Act. Mr Cook does not contend that there has been any administrative error.
ARE THERE SPECIAL CIRCUMSTANCES THAT MAKE IT DESIRABLE FOR THE PP dEBT AND FBT DEBT TO BE WAIVED (SECTION 101, administration act; section 1237AAD, SOCIAL SECURITY ACT)
The Secretary may also waive a debt owed, under section 101 of the Administration Act and section 1237AAD of the Social Security Act, if satisfied:
(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 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 to write off the debt or part of the debt.
There are a few elements to be satisfied before a debt may be waived under section 101 of the Administration Act or section 1237AAD of the Social Security Act. First, the debt must not have arisen from the debtor; that is, Mr Cook must not have knowingly made a false statement or a false representation or knowingly failed or omitted to comply with a provision of the Social Security Act or the Administration Act. Second, there must be special circumstances (other than financial hardship alone) that make it desirable to waive the debt. Third, it must be more appropriate to waive than to write off the debt or part of the debt.
The Secretary does not contend that Mr Cook “knowingly” failed to comply.
The issue, therefore, is whether special circumstances exist.
What does “special circumstances” mean?
The Act does not define what constitutes “special circumstances”.
There has been considerable judicial consideration of the phrase in the context of other social security legislation, for example:
·“Special” denotes something different from the usual or ordinary: Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541, at 545 per Kiefel J (as she then was).
·French J (as he then was) said in Secretary, Department of Social Security v Hales (1998) 82 FCR 154, at 162:
The concept of special circumstances is broad. A constellation of factors, including financial circumstances, may fall within it. The express exclusion of financial hardship alone as a special circumstance is an indicator that it would otherwise be included. This gives some measure of the range of circumstances which will qualify as special. But as a matter of grammar and ordinary logic, the exclusion of financial hardship alone as a special circumstance does not mandate its inclusion in the range of matters constituting such circumstances for the purpose of enlivening the Secretary's discretion… It is inappropriate to constrain that flexibility by imposing a narrow or artificial construction upon the words. It may be that there will be few cases in which the Secretary will be satisfied that there are special circumstances in the absence of financial hardship. It may be that there are few cases in which having found special circumstances to exist, the Secretary would exercise the discretion to waive in the absence of financial hardship. But to anticipate the limits of the categories of possible cases by imposing on the language of the section a fetter upon its application which is not mandated by its words, is to erode its useful purpose.
·The Full Federal Court in Riddell v Secretary, Department of Social Security (1993) 42 FCR 443 held, at 450:
Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other.
·Jacobson J in Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones [2012] 89 ATR 267; [2012] FCA 639 explained the effect of the authorities as follows [emphasis added]:
[51] ...the phrase “special circumstances”, although lacking in precision, is sufficiently understood as including events or things that render the operation of the statue in a particular case as unfair, unintended or unjust. What is required is something that takes the case out of the ordinary, and unfairness or unintended consequences may show that this exists. Moreover, the circumstances of the case are not confined to matters that are external to the operation of the statutory scheme: see Smith per von Doussa J at 60, 61–62; Groth per Kiefel J at 545, Kertland v Secretary, Dept of Family and Community Services (1999) 95 FCR 64 per Merkel J at 71, 73; Kirkbright v Secretary, Dept of Family and Community Services (2000) 106 FCR 281 per Mansfield J at [22], [26]–[27] and [31]–[32]; see also Secretary to Centrelink of Family and Community Services v Allan (2001) 116 FCR 1 per Heerey J at [17].
The AAT has also considered the phrase and held that the interpretation in Beadle and Director-General of Social Security (1984) 6 ALD 1, at [12] (i.e. that the circumstances must be unusual, uncommon or exceptional), applies to the Act.[31]
[31]See Hunnibell and Secretary, Department of Family and Community Services [2004] AATA 992, at [19]; Papps and Secretary, Department of Family and Community Services [2005] AATA 660, at [37].
In summary, the circumstances relied upon to be “special” must be unusual, different, uncommon or exceptional.[32]
[32]The core requirement for “special reasons” is that there be something “unusual or different”: French J in Boscolo v Secretary, Department of Social Security [1999] FCA 106; (1999) 90 FCR 531, at [18]; Barker J in Kazmierczak v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] FCA 1084,
Do special circumstances exist?
The Secretary submits that no special circumstances exist and that therefore the discretion to waive the debt cannot be invoked.[33]
[33] Exhibit 2, Secretary’s Statement of Facts and Contentions dated 26 May 2017, paras 45-46.
Section 101 of the Administration Act and section 1237AAD of the Social Security Act specifically provide that financial hardship alone will not constitue a special circumstance. However, Mr Cook has also raised the fact that he had had some mental health issues. The medical evidence provided by Mr Cook indicates that in October 2016, Mr Cook was depressed due to his marital and financial situation and was experiencing poor sleep, a low mood, and anxiety and that his past, current and planned treatment included psychotherapy.[34]
[34] Exhibit 1, T documents, T 28, page 129, medical certificates by Dr Mahinath Bandara dated 26 October 2016.
There are no medical reports from a psychiatrist or psychologist, although I note that Mr Cook told the Tribunal that the doctors would not write a report. Mr Cook explained to the Tribunal that the separation and subsequent court battle with his wife over the children has been extremely stressful which is understandable, and combined with his financial hardship issues he had been quite anxious and depressed. Mr Cook told the Tribunal that for the last 12 months he was given a waiver from Centrelink which exempted him from looking for work because of his mental health. The medical certificates lodged by Mr Cook with Centrelink over the last 12 months exempting him from seeking employment were not available at the hearing and as a result I directed that the Secretary obtain that material. The Secretary provided that material to the Tribunal and Mr Cook on 14 July 2017.[35] The medical records obtained indicate that:
(a)Mr Cook was suffering from depression and anxiety between October 2016 and at least January 2017;
(b)the doctors consider the condition is temporary but report that it is uncertain as to how long the condition would continue affect Mr Cook’s capacity to work;
(c)as a result of Mr Cook’s mental health he was exempt from looking for work in the following periods:
(i)9 June 2016 – 7 August 2016;
(ii)29 October 2016 – 25 November 2016;
(iii)1 December 2016 – 13 January 2016; and
(iv)24 January 2017 – 18 March 2017.
[35] Secretary’s Supplementary Statement of Facts and Contentions dated 10 July 2017, Attachment C, Medical Conditions Summary Screen and Details.
The Secretary submits that ill health and medical circumstances alone is not a special circumstance and cites Kulakov and Secretary, Department of Social Security [1991] AATA 668 (“Kulakov”).[36] Kulakov was concerned with whether or not any special circumstances existed to reduce a preclusion period as a result of a lump sum payment pursuant to section 156 of the Social Security Act 1947 (as it then was). The Tribunal in Kulakov found (at [21]) that, relying on Secretary to the Department of Social Security and Bolton (1989) 18 ALD 464, that ill health alone cannot be held to be a “special circumstance”. However that is not what Deputy President R K Todd decided in Bolton. What Deputy President Todd did was consider the whole of the circumstances which included an argument of financial hardship, incorrect legal advice and ill health. Deputy President Todd noted that the ill health factor was very prominent in that case because of the respondent’s deterioration, but that because of other circumstances specific to that case it did not constitute a special circumstance.
[36] Secretary’s Supplementary Statement of Facts and Contentions dated 10 July 2017, para 9.
Further, the Full Court of the Federal Court recently found in Ward v Commissioner of Taxation[2016] FCAFC 132 that the Tribunal had erred by taking too narrow a view of what may constitute special circumstances in the context of the Income Tax Assessment Act 1997 (Cth). Heerey J in Secretary to the Department of Family & Community Services v Allan[2001] FCA 1160 also said (at [17]) that:
It is not sensible to lay down precise limits or precise rules as to what may constitute special circumstances: Beadle v Director General of Social Security [1984] AATA 176; (1985) 60 ALR 225 at 228. Ill health, financial circumstances and the unfairness of a strict application of the Act are some matters which may in an individual case, constitute special circumstances: Kirkbright v Secretary, Department of Family and Community Services [2000] FCA 1876; (2000) 32 AAR 120 at 123, 127; see also Kertland v Secretary, Department of Family and Community Services [1999] FCA 1596; (1999) 95 FCR 64 at 71.
While I accept that Mr Cook has had some mental health issues since June 2016, there is no evidence to indicate that this is an exceptional or uncommon situation. Marital issues, busy work, family commitments and the normal vicissitudes of life are not “uncommon”, “out of the ordinary”, or “exceptional” circumstances. They are not, generally, “special circumstances” for the purposes of the Act.[37]
[37] See Gammaldi and Secretary, Department of Social Services (Social services second review) [2016] AATA 1028 where the Tribunal found that even where the Applicant had had a difficult year, with family health issues, business challenges, and increased responsibilities, this did not constitute uncommon or unusual occurrences and were not “special circumstances”.
On the available evidence, I am unable to find that Mr Cook’s health issues constitute a “special circumstance”. There is no basis for the PP Debt and FTB Debt to be waived under section 101 of the Administration Act and section 1237AAD of the Social Security Act.
CONCLUSION
The PP Debt and FTB Debt should be written off pursuant to sections 95(2) of the Administration Act and section 1236(1A) of the Social Security Act.
The decision under review is set aside.

I certify that the preceding 63 (sixty -three) paragraphs are a true copy of the reasons for the decision herein of Member D K Grigg

.................................[Sgd].......................................
Associate
Dated: 2 August 2017

Dates of hearing: 23 June 2017

Date final submissions received: 28 July 2017

Applicant:

Solicitors for the Respondent:

By phone

Ms Julia Driver
Department of Human Services

at [37].

[2017] AATA 1236

2 August 2017

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