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

[2017] AATA 1426

Cummins and Secretary, Department of Social Services (Social services second review) [2017] AATA 1426 (5 September 2017)

Division:GENERAL DIVISION

File Number:           2017/1058

Re:Heather Cummins

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Senior Member A C Cotter

Date:5 September 2017

Place:Brisbane

The Tribunal affirms the decision under review.

..................................[Sgd]......................................

Senior Member A C Cotter

CATCHWORDS

SOCIAL SECURITY – Newstart allowance – overpayment – where applicant provided information regarding income and employment in May 2016 upon commencing paid employment – where applicant provided different information upon review of entitlement to Newstart in June 2016 – whether applicant owed a debt to the Commonwealth in respect of overpaid benefit – whether debt ought to be recovered – whether special circumstances make it desirable to waive the debt

LEGISLATION

Social Security Act 1991 (Cth) ss 643, 1068, 1073D, 1073F, 1073G, 1073J, 1236, 1237A, 1237AAD

Social Security (Administration) Act 1999 (Cth) ss 68, 72, 94, 100

CASES

Director-General of Social Services v Hales (1998) 82 FCR 154

Dranichnikov v Centrelink (2003) 75 ALD 134
Groth v Secretary, Department of Social Security [1995] FCA 1708
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435
Re Davy and Secretary, Department of Employment and Workplace Relations (2007) 94 ALD 693
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Re Ivovic and Director-General of Social Services (1981) 3 ALN N95

Re Secretary, Department of Family and Community Services and Jonauskas (2001) 65 ALD 553

SECONDARY MATERIALS

Guide to Social Security Law, version 1.228, released 3 January 2017

Collins Australian Dictionary (5^th edition, 2003)

The Macquarie Dictionary (revised 6^th edition, 2013)

REASONS FOR DECISION

Senior Member A C Cotter

5 September 2017

BACKGROUND[1]

[1] The factual background to this matter is uncontroversial. Having satisfied myself as to its accuracy, I have therefore drawn on the succinct summary of events contained in the Secretary’s Statement of Facts, Issues and Contentions dated 25 July 2017, [3]-[13]: Exhibit 3. Where appropriate, I have included references to the primary material.

1. On 6 January 2016, the Department of Human Services (“Department”) issued a letter to Ms Heather Cummins, notifying her of her reporting obligations in respect of her Newstart Allowance (“NSA”) payments. Among other things, the letter said:

   When to Contact Us

   You must tell us within 14 days about events or changes in circumstances affecting your payment…

   What you must tell us

   -    if you start paid work or any form of profession, trade, business or self    employment…[2]

   [2] Exhibit 1, T Documents, T 4, page 40, letter from the Department of Human Services to Ms Cummins dated 6 January 2016.

2. On 3 May 2016, Ms Cummins commenced work with the Queensland Department of Communities, Child Safety and Disability Services.[3] At that time, she had a working credit balance of 1,000 credits.[4]

   [3] Exhibit 1, T Documents, T 23, page 132, Department’s file notes.

   [4] Exhibit 1, T Documents, T 22, page 120, Working Credit Balance Summary.

3. On 6 June 2016, Ms Cummins advised the Department of her employment and declared earnings of $1,501.74.[5]

   [5] Exhibit 1, T Documents, T 23, page 133, Department’s file notes.

4. On 15 June, Ms Cummins contacted the Department in respect of a review of her entitlement for NSA.[6]

   [6] Ibid, page 132.

5. On 20 June 2016, she provided different information in respect of her income from employment and advised the Department that from 3 May 2016 to 10 June 2016 she earned $6,443.22, comprised as follows:[7]

   [7] Exhibit 1, T Documents, T 23, page 133, Department’s file notes.

Period commencing	Period ending	Income earned
3 May 2016	13 May 2016	$1,999.62
14 May 2016	27 May 2016	$2,221.80
28 May 2016	10 June 2016	$2,221.80

6.Following receipt of that information, the Department raised a debt against Ms Cummins in the sum of $1,240.03 overpaid for the period 7 May 2016 to 2 June 2016.[8]

[8] Exhibit 1, T Documents, T 5, page 42, Department’s account payable letter to Ms Cummins dated 20 June 2016.

1. Ms Cummins sought a review of that decision by an Authorised Review Officer. It was unsuccessful, with the original decision being affirmed.[9] Ms Cummins’ application for first tier review by the Social Services & Child Support Division (“SSCSD”) of this Tribunal was likewise unsuccessful.[10]

   [9] Exhibit 1, T Documents, T 8, pages 58-63, letter (with notes) from Authorised Review Officer to Ms Cummins dated 22 August 2016.

   [10] Exhibit 1, T Documents, T 2, pages 4-9, Social Services & Child Support Division decision and reasons for decision dated 12 January 2017.

2. In the meantime, on 17 October 2016, the Department recovered the debt in full by way of a garnishee of Ms Cummins’ tax refund from the Australian Taxation Office.[11]

   [11] Exhibit 1, T Documents, T 21, page 117, Department Customer Record.

3. Dissatisfied with that outcome, Ms Cummins has sought a second tier review of the SSCSD’s decision by the General Division of this Tribunal.[12]

   [12] Exhibit 1, T Documents, T 1, pages 1-3, Ms Cummins’ application for review dated 20 February 2017.

   ISSUES FOR THE TRIBUNAL

4. The issues which fall for my determination are:

   (a)  whether Ms Cummins had a debt to the Commonwealth in the sum of $1,240.03 in respect of the period 7 May 2016 to 2 June 2016; and

   (b)  if so, whether that debt ought to be recovered.

5. I deal with those questions below. However, before I do so, it is useful to outline the key legislative provisions.

   THE LEGISLATIVE FRAMEWORK

6. Section 643 of the Social Security Act 1991 (Cth) (“Act”) provides that a person’s NSA rate is to be worked out using Benefit Calculator B at the end of s 1068 of the Act. A person’s ordinary income is one of the factors that affect the rate.

7. The working credit accrual and depletion rules apply to a person who is receiving a social security pension or benefit; whose rate of payment of the pension or benefit is worked out with regard to the income test module of a rate calculator in Chapter 3; who has not reached pension age; and to whom the student income bank does not apply.[13]

   [13] See Social Security Act 1991 (Cth), s 1073D.

8. Section 1073F of the Act sets out the method for working out accruals and depletions of working credits for social security beneficiaries for each day in an instalment period. Section 1073G goes on to provide that if a working credit balance is depleted on a particular day, the person’s rate of ordinary income on a fortnightly basis for that day is reduced by the working credit depletion amount applicable to that day, determined under step 6 of the method statement, multiplied by 14.

9. Section 1073J of the Act relevantly provides:

   (1)  If:

   (a)a person receiving …(NSA)… is a working credit participant; and

   (b)either:

   (i)    the participant commences to earn, derive or receive, or to be taken to earn, derive or receive, employment income; or

   (ii)   there is an increase in the employment income that is earned, derived or received, or taken to be earned, derived or received, by the participant; and

   (c)the participant has a working credit balance greater than nil at the start of the instalment period of the participant in which the commencement or increase occurs; and

   (d)but for the commencement or increase, the participant would have continued to be qualified for the payment mentioned in paragraph (a) until the earlier of :

   (i) a day determined under Division 8 or 9 of Part 3 of the Administration Act; or

   (ii)   the day on which the participant’s working credit balance is reduced to nil;

   the participant is to be treated as if he or she had continued to be so qualified until the earlier of the days determined as referred to in subparagraphs (d)(i) and (ii).

10. That leads to a consideration of the relevant provisions of the Social Security (Administration) Act 1999 (Cth) (“Administration Act”).

11. Section 68(2) of the Administration Act relevantly provides that the Secretary may give a person a notice requiring them to notify the Department of a change of circumstances, and to give the Department one or more statements about a matter that might affect the payment of a social security payment made to them. The person must notify the Department of such changes of circumstances within 14 days.[14]

    [14] Social Security (Administration) Act 1999 (Cth), s 72(3).

12. Section 100(1) of the Administration Act relevantly provides:

    (1)  Subject to subsection (2), if:

    (a)  a person who is receiving a social security payment is given  a notice under subsection 68(2); and

    (b)  the notice requires the person to inform the Department of the occurrence of an event or change of circumstances within a specified period (the notification period); and

    (c)  the event or change of circumstances occurs; and

    (d)  the person does not inform the Department of the occurrence of the event or change of circumstances within the notification period in accordance with the notice; and

    (e)  because of the occurrence of the event or change of circumstances, the rate of the social security payment is to be reduced;

    the social security payment becomes payable to the person at the reduced rate on the day on which the event or change of circumstances occurs.

13. Under s 94 of the Administration Act, where a person fails to notify the Department of an occurrence or event within the statutory timeframe required by a s 68(2) notice, and as a result:

    (a)the person ceases to be qualified to receive a social security payment;  or

    (b)the payment otherwise ceases to be payable to them; or

    (c)the person’s working credit balance is reduced to nil in an instalment period and the social security payment ceases to be payable to them,

    the person’s social security payment is cancelled.

    CONSIDERATION

    Did Ms Cummins have a debt to the Commonwealth in the amount calculated?

14. Ms Cummins denies having been indebted to the Commonwealth in the amount of $1,240.03. On the contrary, she says that there is a shortfall owing to her. There are two aspects to her argument. First, she says that although she started her employment on 3 May 2016, she was not told how much she would be paid; she did not find out until she received her first pay, which was some weeks after she started her employment. Put simply, she said that she could not supply information which had not been supplied to her and to which she had no access. Second, she did not think that her working credits had been correctly applied by the Department. It was her understanding, from speaking with half a dozen of her acquaintances, that working credits applied for two and a half weeks, which would have assisted her to set herself up with her new job. On her calculations, that totalled an amount of $1,617.00. After the amount of the raised debt is refunded, that gives a shortfall of $376.97 to be paid by the Department.[15]

    [15] Exhibit 2, Ms Cummins’ Statement of Issues lodged 30 June 2017, page 1.

15. As to Ms Cummins’ first argument, this matter involves not just late reporting, but also underreporting. The letter of 6 January 2016, outlining Ms Cummins’ reporting obligations, required her to tell the Department within 14 days about events or changes of circumstances affecting her payment. She was to tell the Department if she started paid work. Despite starting work on 3 May, Ms Cummins did not advise the Department of her employment until 6 June, over a month later. On that date she declared earnings of $1,501.74, when the correct amount was over four times that amount ($6,443.22). I am therefore unpersuaded by Ms Cummins’ first argument.

16. As she failed to comply with a s 68(2) notice, Ms Cummins’ NSA payment could be reduced, pursuant to s 100(1) of the Administration Act, from the day on which the change of circumstances occurred, being 3 May 2016.

17. However, prior to her commencing work on 3 May, Ms Cummins had a working credit balance of 1,000 credits. Those credits were used in the Department’s calculations to defer the date on which her earnings began to affect her payment, to 7 May 2016. From that date, her entitlements were reduced due to her earnings.[16]

    [16] See Exhibit 1, T Documents, T 13, pages 74-76, ADEX- Debt Explanation

18. While Ms Cummins maintained that her acquaintances had been dealt with more generously, I can only have regard to her particular circumstances. However, she made no specific criticism of the Department’s treatment of her working credits balance. In those circumstances, and having regard to ss 1073F and 1073G of the Act and the Guide to Social Security Law,[17] I am prepared to accept the Department’s workings in that regard.[18]

    [17] See 3.1.11.30 (Working Credit Depletion) and 3.1.11.40 (Working Credit Daily Calculation Examples). The Tribunal ought to apply lawful policy unless there are cogent reasons to the contrary: Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634.

    [18] Exhibit 1, T Documents, T 19, pages 100-108, Working Credit Balance Explanation.

19. Ms Cummins’ working credits were therefore fully depleted by 7 May. By reason of s 1073J(1)(d)(ii) of the Act, she was no longer qualified to be paid NSA from that date.

20. Section 1223(1) of the Act provides that if a social security payment is made and a person who obtains the benefit of the payment was not entitled to obtain it, the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.

21. The Secretary relied on the calculation of the overpayment in the sum of $1,240.03. I have perused that calculation and am satisfied with the methodology adopted by the Department. Apart from what I noted earlier, Ms Cummins made no criticism of the calculation itself.

22. In those circumstances, and absent any question or challenge by Ms Cummins, I am satisfied that Ms Cummins was overpaid the amount of $1,240.03 to which she was not entitled. Therefore, I find that Ms Cummins owed a debt to the Commonwealth in that amount in respect of the period 7 May 2016 to 2 June 2016.

    Is the debt to be recovered?

23. The Act contains a number of provisions giving the Secretary the power to write off debts or to waive the right to recover the whole or portion of the debt in certain circumstances. I deal with those provisions below.

    Debt write off

24. Under s 1236 of the Act, the Secretary may, on behalf of the Commonwealth, decide to write off a debt for a stated period or otherwise, and in certain circumstances. Those circumstances are: where the debt is irrecoverable at law; where the debtor has no capacity to repay the debt; where the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate him or her; and where it is not cost effective for the Commonwealth to take action to recover the debt.

25. The Secretary submitted that s 1236 has no application in the present matter. The debt is recoverable at law and has been fully recovered. It is said that in those circumstances it is inappropriate to write off the debt.[19]

    [19] Exhibit 3, Secretary’s Statement of Facts, Issues and Contentions dated 25 July 2017, [33].

26. I agree with, and accept, the Secretary’s submission. The term “write off” is not defined in the Act. It is therefore necessary to have recourse to its plain or ordinary meaning. The Macquarie Dictionary relevantly attributes the following meaning to the term: “to treat as an irreparable or non-recoverable loss”,[20] while the Collins Australian Dictionary gives the meaning: “to cancel (a bad debt or obsolete asset) from the accounts”.[21]  The debt has been fully recovered by the Commonwealth by means of a garnishee of Ms Cummins’ tax refund. There is nothing more to recover; the debt has already been repaid.  I therefore do not consider that write off is appropriate in the present matter.

    [20] The Macquarie Dictionary (rev 6^th ed.), Macquarie Dictionary Publishers Pty Ltd, 2013.

    [21] Collins Australian Dictionary (5^th Australian edition), Harper Collins Publishers Australia Pty Limited, 2003.

    Waiver of right of recovery

27. There are two provisions of the Act which deal with waiver and which are potentially relevant in the present case. The first provision deals with administrative error by the Commonwealth, while the second concerns special circumstances waiver. I deal with both below.

    Waiver - administrative error

28. Section 1237A of the Act provides that the Secretary must waive the right to recover the proportion of a debt that is attributable “solely” to an administrative error of the Commonwealth if the debtor received in good faith the payment(s) that gave rise to that proportion of the debt.

29. There is no suggestion by Ms Cummins that the debt arose as a result of an administrative error of the Department. Rather, the debt arose because of her failure to comply with her notification obligations and her failure to declare her income in a timely and accurate fashion, leading to an overpayment of NSA. I therefore do not consider that waiver under s 1237A is applicable in this instance.

    Waiver - special circumstances

30. Section 1237AAD of the Act provides:

    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.

    What are “special circumstances”?

31. This and similar provisions have been the subject of much consideration by the courts and the Tribunal over the years. It is unnecessary, for present purposes, to discuss those decisions in detail. However, there are a couple of observations which I should make.

32. First, paragraph (a) of the section makes it clear that a prerequisite for the exercise of the waiver is that the debtor did not “knowingly” provide false information or “knowingly” fail to comply with their obligations under the relevant legislation. The term “knowingly” is not defined. However, the deliberate use of that word requires that there be some element of intent in making the representations or in the failure to comply with the legislation.[22] 

    [22] See Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435, 445 [48] (DP Forgie); Re Davy and Secretary, Department of Employment and Workplace Relations (2007) 94 ALD 693, 714 [74] (DP Forgie) citing Re Secretary, Department of Family and Community Services and Jonauskas (2001) 65 ALD 553.

33. The term “special circumstances” is likewise not defined in the Act. It has often been said that the expression looks to circumstances that are unusual, uncommon or exceptional, or which “have a particular quality of unusualness that permits them to be described as special”.[23] It requires something to distinguish the person’s case from others, “to take it out of the usual or ordinary case”.[24]

    [23] See, for example, Re Beadle and Director-General of Social Security (1984) 6 ALD 1, 3 (Toohey J, Member Wilkins and Member Billings); and Dranichnikov v Centrelink (2003) 75 ALD 134, 148 (Hill J).

    [24] Groth v Secretary, Department of Social Security [1995] FCA 1708, at page 7. (Kiefel J).

34. It has also been emphasised that, in exercising the discretion in a particular instance, the decision-maker must have regard to the legislative intent of the Act:

    In the exercise of the discretion…, the decision-maker must have regard to whether, by exercising the discretion in a particular case, he will be achieving or frustrating ends or objects which are conformable with the scope and purpose of the…Act.[25]

    [25] Re Ivovic and Director-General of Social Services (1981) 3 ALN N95, [45].

1. In that context, French J in Director-General of Social Services v Hales observed that the taxpayer is entitled to expect that, in the ordinary course, money paid to people which they are not entitled to will be recovered.[26] In a similar vein, Deputy President Forgie remarked in Re Davy and Secretary Department of Employment and Workplace Relations:

   The “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. Waiver of the debt would mean that Mr Davy would have had the benefit of part of his DSP in circumstances in which he was not entitled to it…He has had the benefit of the money and there is no injustice in requiring him to repay the money of which he has had the benefit but not the entitlement…[27]

   [26] (1998) 82 FCR 154,155.

   [27] (2007) 94 ALD 693, [80].

   Ms Cummins’ circumstances

2. In her Statement of Issues lodged with the Tribunal on 30 June 2017, Ms Cummins reiterated that she did not receive her first pay until 20 May 2016. She was given little support by her job provider. She received one $30.00 fuel voucher and was told that she could spend up to $70.00 on clothes. As the fuel voucher would only cover two days of travel between Ipswich and Toowoomba, she was forced to stay in Toowoomba and sleep in her car for nine nights. That was during winter, and she experienced cold nights. As her car was parked about one and a half kilometres from her work (in order to save parking costs), she had to walk that distance to and from work each day. On one of those occasions, she was involved in an accident, when her coat was caught by a passing car, causing injury and bruising to her elbow and hip.[28]

   [28] Exhibit 2, Ms Cummins’ Statement of Issues lodged 30 June 2017, pages 1-3 and page 8.

3. Her Statement of Issues also catalogued a number of difficulties she encountered with her employer in terms of lack of support and guidance. In particular, she complained that she was unable to secure a password to start her computer and was unable to get an email address, preventing her from submitting timesheets for six weeks. She said that she sat and “warmed a seat” for six weeks, unable to do anything. Although she had been employed as an accounts clerk, she received no access to the accounting program. She continually asked for work, but was given minor and menial jobs. She was excluded by other employees and subjected to “passive bullying”.[29] Ms Cummins also said that she has a broken tooth that desperately needs attention.[30]

   [29] Ibid, pages 1-2, 6 and 8.

   [30] Ibid, page 4.

4. A Mod F (Business details) form completed by Ms Cummins on 16 November 2016 revealed that she has operated a business as a sole trader under the name, “Heather Cummins Enterprises”, since April 2015. The nature of the business was described as bookkeeping and crochet blankets. Ms Cummins estimated that she would spend a total of 15 hours per week working in the business, consisting of answering emails, dropping business cards, and introducing herself to potential clients. She acts as her own accountant.[31]

   [31] Exhibit 1, T Documents, T 15, pages 81-88, Ms Cummins’ Mod F form (Business details) dated 16 November 2016.

5. A Profit and Loss statement for 2015-2016 showed income from the business as $54,271.00 and expenses as $99,998.64, resulting in a loss of $45,727.64. In addition, four months of car payments, totalling $5,987.28, was included, taking the total loss to $51,714.92. The declared expenses included $51,091.24 in bad debts, $14,427.00 in depreciation costs, and $10,283.06 in respect of “50% rent & exp”.[32]

   [32] Exhibit 1, T Documents, T 16, page 90, Profit and Loss statement for 2015-2016, undated.

6. The balance sheet for the same year lists as assets three motor vehicles purchased on 24 December 2014 for a total of $55,751.21. During cross-examination, Ms Cummins explained that the cars had been purchased in anticipation of the business being awarded a contract with a major resort in Mackay, where the work would be undertaken on a “fly in, fly out” (“FIFO”) basis. The cars were for the use of Ms Cummins and two of her daughters whom she was hoping to join the business. I queried the need for the three cars when the anticipated contract was on a FIFO basis. Ms Cummins explained that she was hopeful in securing other contracts around Toowoomba, such as for farms. In February 2015, Ms Cummins was told that the contract with the Mackay resort would not proceed. The daughters did not join the business, but kept their respective cars even though the business continued to pay the loan repayments for them. According to the balance sheet, the cars had been depreciated by $8362.00 in 2014-2015 and by $14,215.00 in 2015-2016. Their value at 30 June 2016 was declared at $33,174.21. The business’ declared liabilities were in respect of the bank loans taken out to purchase the vehicles. The total liability after adjustments for repayments was shown as $66,413.97, resulting in a negative equity of $33,239.76.[33]

   [33] Exhibit 1, T Documents, page 91, business’ balance sheet for 2015-2016.

7. Ms Cummins’ balance sheet for the period revealed a loss of $8,746.06.[34]

   [34] Ibid, page 93, Ms Cummins’ balance sheet, undated.

8. Her tax return for 2015-2016 disclosed a loss for the year of $52,826.00 and deferred losses from a prior year of $59,342.00.[35]

   [35] Exhibit 1, T Documents, T 18, page 98, tax return for 2015-2016 dated 16 November 2016.

9. Ms Cummins detailed her expenses as at 28 June 2017 to be $1058.65 per week. Besides rent, utilities, fuel and food, that included repayment instalments on existing debts, as well as the costs relating to the three motor vehicles and a mobility scooter.[36] She said that she gave support to four other households, namely:

   (a)supplying a car and fuel to one daughter who was unemployed and in the advanced stages of pregnancy;

   (b)supplying accommodation, car and support to another daughter who was unemployed;

   (c)supplying white goods to another daughter whose son is severely disabled; and

   (d)paying for a mobility scooter for her father.[37]

   Under cross-examination, Ms Cummins explained that each of the five households (including her own) were in similar financial difficulties, and had decided to pool their money so as to ease out the highs and lows of their various debts. Ms Cummins said that she has control of the finances and where they go. She conceded that her statement of expense as at 28 June 2017 did not bring into account the payments received from the other households participating in the pooling arrangement. 

   [36] Exhibit 2, Ms Cummins’ Statement of Issues, lodged 30 June 2017, page 7.

   [37] Exhibit 2, Ms Cummins’ Statement of Issues, lodged 30 June 2017, page 4.

10. From 7 July 2017, Ms Cummins’ weekly expenses decreased to $977.65, on account of her returning to Ipswich and sharing new rented accommodation there. The moving costs were put at $1919.00. Ms Cummins said that the garnishee of her tax refund affected her budgeting.[38] She has, however, been able to successfully renegotiate some repayment arrangements, such as the loans in respect of the cars and her MasterCard account, which had been in default.[39]

    [38] Ibid, pages 4-5 and 7- 8.

    [39] Exhibit 2, Attachment, page 7, Latitude Financial Services default notice dated 13 June 2017.

11. Ms Cummins entered into a General tenancy agreement in respect of her Toowoomba accommodation in January 2017. The rent was $320.00 per week.[40] On 8 June 2017, she gave notice of her intention to leave the premises because it was “unsafe”.[41] The lessor gave a notice to remedy breach on 23 June 2017, claiming $594.29 in outstanding rent.[42] Mrs Cummins has since returned to Ipswich.[43] Notwithstanding that, she has recently made a claim against the lessor of the Toowoomba premises for rent reduction and compensation.[44]

    [40] Exhibit 1, T Documents, T 20, pages 109-112, General tenancy agreement dated 12 January 2017.

    [41] Exhibit 2, Attachment, page 11, Ms Cummins’ notice of intention to leave dated 8 June 2017.

    [42] Ibid, page 12, notice to remedy breach dated 23 June 2017.

    [43] Ibid, page 13, General tenancy agreement dated 7 July 2017.

    [44] Exhibit 4, letter from Ms Cummins to PRD Nationwide Toowoomba dated 16 August 2017.

12. At the hearing, Ms Cummins also recounted her dealings in recent times with the Commonwealth Bank (“CBA”). She said that she had, or was signatory to, three accounts with that bank. Two of them were closed by the bank in April/May 2016, while the third was closed by it in July 2016. The reason given for the closures related to an alleged fraudulent activity in one of the accounts. With the closure of the accounts, the balances were seized and reduced to nil. One of the accounts had previously had a balance of approximately $51,000.00, representing compensation proceeds Ms Cummins had received after a long running (16 years) industrial relations claim against a former employer. Another account contained approximately $10,000.00, received as a donation from a gambling fund to a charity of which Ms Cummins was treasurer (and signatory of the account). That latter amount had been earmarked to provide a bathing aid for Ms Cummins’ disabled grandson. I asked Ms Cummins what steps she had taken to recover the seized funds. She said that nothing had been done by her as yet in respect of the $51,000.00, because, from previous experience, she knew the police would not investigate it as the amount was too small. Ms Cummins said that she had experienced similar circumstances previously, in 1991 (involving the National Australia Bank) and 2006 (involving the ANZ Bank). In those circumstances, the plan was to have the charity seek the return of its money first. Ms Cummins told me that she had not pursued the bank as she did not have the resources or energy to fight it. Seeking legal aid had not crossed her mind. In the meantime, Ms Cummins treated the seized funds (or at least, those relating to her compensation proceeds) as a bad debt in the business’ Profit and Loss statement.[45]  

    Are Ms Cummins’ circumstances “special”?

    [45] See Exhibit 1, T Documents, T 16, page 90.

13. I do not consider that the problems which Ms Cummins experienced with her job provider and with her employer constitute “special circumstances”. It is not unusual or out of the ordinary for a person re-entering the paid workforce to experience difficulties and frustrations.

14. Nor do I think that Ms Cummins having to leave her rental accommodation in Toowoomba because it was unsafe amounts to a “special circumstance”. In that regard, I agree with, and accept, the Secretary’s submission, that such a matter is not unusual, uncommon or otherwise exceptional; rather, it is more properly described as one of the “vicissitudes of life”.[46] The same applies in respect of Ms Cummins’ broken tooth and her injuries and bruising from the car accident.

    [46] Exhibit 3, Secretary’s Statement of Facts, Issues and Contentions dated 25 July 2017, [54].

15. As to Ms Cummins’ financial circumstances, I am not persuaded that they are sufficiently “special” to warrant the exercise of the discretion in her favour. I say that for several reasons.

16. First, the documentation before me was incomplete and, in a number of respects, inaccurate. For instance, there was little or no supporting documentation substantiating the loan arrangements in respect of the vehicles and the other outstanding debts identified by Ms Cummins in her Statement of Issues and in the business’ Profit and Loss Statement. Nor was any documentation produced in respect of the CBA’s closure of Ms Cummins’ accounts and the seizure of the account balances.

17. Ms Cummins’ statement of her expenses as at 28 June and 7 July is clearly inaccurate, since it purports to “pool” a number of expenses which are referable to other households, without likewise “pooling” their income. That distorts any proper consideration of Ms Cummins’ own financial circumstances. It is equally wrong, and misleading, to treat the account balances seized by the CBA as “bad debts” of the business when the money had been received.

18. Second, I find some of the explanations offered by Ms Cummins to be implausible. The explanation concerning the closure of the CBA accounts and the seizure of the account balances was of recent origin, it having been raised for the first time during questions by me following the cross-examination of Ms Cummins by the Secretary’s lawyer. Because it emerged so late, I invited the Secretary’s lawyer to ask further questions concerning that topic by way of cross-examination. That said, I find it extraordinary that, despite the passing of over a year, Ms Cummins has taken no steps to retrieve the not inconsiderable amount of seized funds. That is especially so when one considers Ms Cummins’ 16 year pursuit of compensation from her former employer,  her recent demand for rent reduction and compensation from her former lessor, and her present pursuit of the current proceedings for a comparatively modest amount.

19. I also have difficulty with Ms Cummins’ explanation for the business’ purchase of three cars on Christmas Eve 2014, some four months before she says she commenced the business. Her two daughters, who were to be the recipients of two of the cars, had no previous involvement in the business, nor did they subsequently. The cars were purchased in anticipation of a contract to do work on a FIFO basis in Mackay, far from Toowoomba.  Apart from a hope that the business might win some other contracts locally, there was no apparent explanation as to why three cars were required for the business at that early stage.

20. For those reasons, I do not consider there is sufficient reliable evidence concerning financial hardship for me to be satisfied that “special circumstances” exist in this instance.

21. In any event, even if (contrary to my view) the financial circumstances were thought to be “special”, I do not consider they are such that would make it desirable to waive the right of recovery in this instance. To paraphrase Deputy President Forgie, waiver of the debt would mean that Ms Cummins would have the benefit of NSA to which she was not entitled. Put simply, the taxpayer rightly expects that money paid in such circumstances will be recovered.

22. It follows from what I have said that I do not consider that the circumstances of this matter are sufficiently special as to warrant the exercise of the discretion to waive all or part of the debt under s 1237AAD of the Act.

    CONCLUSION

23. I consider that Ms Cummins owed a debt of $1,240.03 to the Commonwealth in respect of overpaid NSA.

24. There being, in my view, no ground to write off or waive the recovery of that debt, I consider the Commonwealth was entitled to recover it.

25. Accordingly, the decision under review is affirmed.

I certify that the preceding 65 (sixty -five) paragraphs are a true copy of the reasons for the decision herein of Senior Member A C Cotter

................................[Sgd]........................................

Associate

Dated: 5 September 2017

Date of hearing:	24 August 2017
Applicant:	In person
Solicitors for the Respondent:	Ms Maleah Underhill Department of Human Services