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

Drake and Secretary, Department of Social Services (Social services second review) [2022] AATA 376 (4 March 2022)
Division:GENERAL DIVISION
File Numbers: 2019/8038, 2019/8039
Re:Scott Drake
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Mr Rob Reitano, Member
Date:4 March 2022
Place:Sydney

I affirm the decision under review.
....................................[sgd]....................................
Mr Rob Reitano, Member
CATCHWORDS
SOCIAL SECURITY – cancellation of Newstart Allowance – failure to regularly report income protection payments – debt raised – whether debt must be waived due to sole administrative error – whether special circumstances exist – decision under review affirmed
LEGISLATION
Social Security Act 1991(Cth) ss 1236, 1237A, 1237AAD
Social Security Administration Act 1999 (Cth) s 66A
CASES
Read v The Commonwealth [1988] HCA 26; (1988) 167 CLR 57
Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190
REASONS FOR DECISION
Mr Rob Reitano, Member
4 March 2022

On 25 November 2019 the Social Services and Child Support Division of the AAT (AAT1) affirmed two decisions of an authorised review officer on 13 August 2019. The first decision was a decision to cancel Scott Drake’s (Mr Drake) Newstart Allowance. The second decision was to raise a debt for the overpayment of Newstart Allowance to Mr Drake for the period 21 January 2015 and 23 April 2019.
On 6 December 2019 Mr Drake filed an application to have the decisions of AAT1 reviewed by the Tribunal. Mr Drake indicated that he did not wish to pursue his application to have the decision cancelling his Newstart Allowance reviewed so this decision is only concerned with the issues associated with the decision to have Mr Drake repay his overpaid Newstart Allowance.
I stand in the shoes of the AAT1 and am to consider the matter afresh. I am required to apply the Social Security Act 1991 (Cth) (Act) and the Social Security Administration Act 1999 (Cth) (Administration Act) to arrive at the correct decision.
I have decided to affirm the decision of AAT1 and these are my reasons for doing so.
FACTS
From 2 January 2013 until 23 April 2019 Mr Drake was in receipt Newstart Allowance. Newstart Allowance is an income support payment made to people in their adult life who are unemployed. It is paid to them to provide them with an income while they are trying to obtain employment.
On 2 January 2013 the Department of Social Services (who I will refer to as ‘Department’ or ‘Centrelink’ in these reasons) wrote to Mr Drake telling him the Department was basing its calculation of his entitlement to the allowance on information that he was in receipt of a total fortnightly income of $566.12. The letter could not have been clearer so far as it stated the fortnightly income the calculation was based on. The letter contained a heading about ‘Important Information’ in capital letters and bold with a large bold pointer immediately next to it. It would have been hard to miss the words. Underneath the words ‘Important Information’ some of the things that were written include:
Your Reporting Statement (Application for Payment) is enclosed. If you are using Self Service (online or phone), you do not need to return this form. You must report your earnings and other information on the Due Date. You can use Self Service by going online or calling your reporting line 13 3276 (13 ‘EARN’).
Your last form asked for an estimate of earnings. If you earned more or less than you estimated, please tell us the correct gross amount when you lodge this form.
If your family income has changed from what you previously told the Family Assistance Office, please phone 13 6150 to provide a new estimate for Family Tax Benefit.
That letter also said that Mr Drake was required to tell the Department ‘. . .within 7 days if you or your partner become aware that you will receive or have received compensation’. It should be emphasised that the word ‘compensation’ in context obviously had a different meaning to ‘fortnightly income’. One of them referred to the regular fortnightly amount Mr Drake would receive as income the other was referred to payments that were different to that and which were compensatory in nature.
Mr Drake said he did not recall receiving the letter of 2 January 2013 which is not surprising given that it was sent some eight or so years before he was asked about it. Given that the copy had his address on it, it is more probable than not that it was sent to him. It is also relevant that Mr Drake said that most of the correspondence he received from the Department said basically the same things. It follows that he must have been aware of what the correspondence said in order to conclude most of it basically said the same thing.
In September 2014 Mr Drake provided information to the Department about income protection payments he had been receiving under a policy of insurance. The reason why he was receiving those payments related to an accident Mr Drake had had some time earlier. Mr Drake claims he had told the Department about those payments previously and was told by the Department that ‘it will be fixed up when he hands in his tax returns’. The reference to ‘it’ can only be sensibly read as referring to any possible under or over payment that might result from a failure to report payments of income when they were made. There was no evidence other than Mr Drake’s say so about what he was told and even then, much of what he claims to have been told was not particular.
On 18 September 2014 Mr Drake gave the Department a ‘Compensation and Damages Form’. That form disclosed the existence of the income protection payments which Mr Drake indicated were ‘intermittent’, would ‘stop and start’, were not regular and were sought ‘only as suitable’. A copy of a tax return was attached.
On 8 December 2014 the Department wrote to Mr Drake again. That letter told him a figure of $555.86 as ‘Total fortnightly income’ was being used to calculate his regular payment. That letter also contained some other information. In particular, under a heading which was in bold ‘What you must tell us’ the following appeared:
You must tell us within 14 days about events or changes in circumstances affecting your payment. A list of the events you need to report is shown below. If you get a Reporting Statement, report your earnings or changes in circumstances on your due date. If you do not get a Reporting Statement, you can tell us about any changes via self service (online or phone), in writing (fax or post), or by attending any of our service centres.
…
·You or your partner start to receive or stop receiving income, your or your partner’s income changes from the rate last notified or the income shown above is incorrect.
·You or your partner claim or receive compensation (regular payments or lump sum)
Again, the difference between fortnightly income and compensation was apparent. Also, under a heading ‘What is income’ the following appeared:
Income includes, but is not limited to: personal earnings, sick or holiday pay, sick or accident insurance, compensation, bank interest, net profit from a shop or business, gifts or allowances of a regular nature (including an allotment or a dependent’s allowance), superannuation, retiring allowance or similar payments, payments for long service leave, income assessed from financial investments under the extended deeming rules (see above), an annuity, income from a deceased estate, income from rent, boarders or lodgers, miner’s pension, overseas pension, war (disability) pension, government assistance, receipt of a lump sum payment of money or one-off payment from any source, the value of board and/or lodging received in return for services, and profit on withdrawal from some managed investments or rollover/superannuation funds in some situations.
The letter was fairly clear about what needed to be reported within 14 days which included ‘accident insurance’ and ‘compensation’. There were other things, but those things assume some relevance for reasons that will become clear. It is sufficient here to observe that income protection payments being made as a consequence of an accident reasonably fall within one or other of those descriptions.
On 15 December 2014 Mr Drake was sent a ‘Reporting Statement’ which told him that ‘This form tells you how to report your employment income and other changes in circumstances on your reporting days’. The letter was clear that Mr Drake was to report his income ‘every 12 weeks’ and nominated 3 March 2015 as the date he was to next report. It directed him to a website under a heading in bold ‘What you must report for each Centrelink Reporting Period’:
If any of your circumstances have changed:
·you must tell us of your new circumstances within 14 days of the change occurring. There is important information about what you must tell us on the back of this letter.
The letter recorded that it was ‘an information notice given under law’ and that there was an ‘obligation to provide all information that is relevant to your payment’. It referred to the fact that giving false or misleading information was an offence.
On the back of this letter there was a heading ‘Changes you must tell us about’ under which appeared amongst other things the words:
‘If you do not tell us about changes, you could have a debt, you may have to pay all or some of the money back.’
One of the changes under the heading ‘Income, Assets and Investments’ was ‘get any money from any source’ noting that the bold was in the original. Also, under the heading ‘Compensation’ the words ‘You must tell us within seven days if you (or your partner) have received compensation or become aware that you will receive compensation’. Again, the bold was in the original.
Between 15 December 2014 and 21 January 2019 Mr Drake received about 22 similar letters. Over a not dissimilar period Mr Drake received notices telling him the basis of which his payments had been calculated. In particular from 8 February 2016 the notices said his payments had been calculated on a fortnightly income of $17.95.
On 19 March 2015 the Department sent Mr Drake a letter that said:
If you receive any payment of weekly compensation or a lump sum compensation payment, some or all of the Centrelink payments paid to you and your partner since the date of injury may have to be paid back.
Information about when you have to tell Centrelink about compensation payments is on the back of this letter.
On the back of the letter after the words in bold ‘This is an information notice given under social security law’ the following appeared:
What you must tell us
You must tell us within seven days if you or your partner (including de facto) receive, or are likely to receive, any compensation payment. You must also tell us within 14 days if your weekly compensation payment rate changes. You can tell us about these changes by writing, calling, going online or visiting one of our services centres. You can find contact details by going to humanservices.gov.au/contact
The letter of 19 March 2015 again was very clear so far as it forecast the fact that if ‘any payment of weekly compensation or a lump sum compensation payment’ was received there might be a need to pay benefits received from the Department back. The obligation in bold was spelt out requiring Mr Drake in no uncertain terms to tell ‘us’ within seven days and 14 days respectively. The fact that the instruction was clear and in written terms is important.
On 30 April 2015 Mr Drake submitted a ‘Compensation Personal Sickness and Accident Claim’ form to the Department. The form referred to a previously disclosed income protection policy. The form said that payments had been made from 24 February 2012 and were not continuing. It said the payments had ceased from 3 March 2014. It said the payments ceased because of ‘Non receipt of financial information to support claim. Now with Ombudsman’. The form recorded ‘the claim’ was likely to proceed and it was ‘unknown’ if money would be released to Mr Drake. It disclosed the claim number. It is reasonable to presume that as of 30 April 2015 the information available to the Department indicated that Mr Drake was at least from that date not in receipt of compensation payments whether as income protection payments or otherwise.
On 12 June 2015 the Department presumably responding to the 30 April 2015 form sought details of all income protection payments Mr Drake had received since 5 July 2014 to 12 June 2015.
On 28 July 2015 Mr Drake informed the Department he had received $29,074.84 in income protection payments in the relevant financial year. A debt for $3,341.19 representing overpayments was raised. From that time Mr Drake knew, and at least should have known, if he did not know before then, that a failure on his part to report income protection payments when he was receiving them might well result in him having to repay money to the Department. It is important for reasons that will become clear later that none of what happened on this occasion was responsive to Mr Drake having provided his income tax returns to the Department and was, it appears, completely responsive to the Department having asked Mr Drake for the information, interest in which had been most likely been generated initially by the 30 April 2015 form being provided.
On 1 February 2016 Mr Drake advised that he had received another $18,000 as income protection payments which he had received in December the previous year. A further debt of $483.59 was raised and again, if nothing else was clear the prospect of being overpaid and a debt resulting from not reporting income protection payments should by then have been reasonably obvious. Again, it assumes some significance that the advice from Mr Drake about the compensation paid to him was not provided as a result of him giving his income tax returns to the Department.
On 27 June 2018 Mr Drake had a conversation by telephone with an employee of the Department in which Mr Drake raised in general terms the requirement that he had as a self-employed person to provide information about his business income. He did not in that conversation say anything specifically about the income he was receiving or the income protection payments he was receiving. Nothing at all was said about what business income and other payments Mr Drake was receiving at the time.
In the conversation there was particular reference to the fact that Mr Drake had not provided his tax return for the 2015/2016 tax year to the Department. Mr Drake suggested it was ‘almost 12 months behind’ but did not identify when the tax return would have been due or why it was ‘behind’. His statement about the 2015/2016 tax return not having been lodged was in response to the suggestion by the Department employee that he was referring to the 2016/2017 tax return and which Mr Drake responded by saying he was referring to the 2015/2016 tax return. He said he would get ‘that one in and then get him [referring to his accountant] to start on a new one, and hopefully it’s a bit quicker. But it’d be about 6 to 8 months’.
In his evidence, Mr Drake when confronted with the proposition that by 27 June 2018 he had not provided the Department with his 2015/2016 or 2016/2017 tax returns (and could not by then have provided his 2017/2018 tax return because the tax year had not concluded) tried to suggest he had provided the 2015/2016 return on 1 September 2017. I reject his evidence about that because there is no reason to believe that he was not telling the Department employee in the telephone call the truth especially having regard to the fact that the conversation acknowledged that he still had on that day one other return outstanding. The other outstanding return could only have been, as at the date of the call, the 2016/2017 return.
It is not necessary to say much more about Mr Drake’s conflicting evidence about the tax return because in the conversation Mr Drake was told the last time his income was ‘updated…- the income on the record - was 14 October 2015’. Mr Drake did not challenge that statement during the conversation and did not say anything about it in his evidence. Had he provided his tax returns or other information about his income on 1 September 2017 or, in fact, at any time before that conversation that statement would clearly have been incorrect. Needless to say, there was also no documentary or other evidence that supported Mr Drake’s evidence that he provided the relevant tax returns at some time before the phone call on 27 June 2018. I am satisfied that Mr Drake had not provided his tax returns or any information about his income protection payments for the 2015/2016 or 2016/2017 financial years to the Department by 27 June 2018.
There is another reason why that telephone conversation is important. As I have already observed in the conversation Mr Drake said nothing at all about his receipt of income protection payments including when they were received, what amounts were being received, what he had been told about reporting them and so on. Nor did he say anything about what he claimed to have been told on other occasions to the effect that he should not report his income protection payments in accordance with what he had been told in the letters and notices I have referred to. I will return to this later but here it is only necessary to observe that the amounts of income protection payments he was receiving by then were significant: he received income protection payments totalling $21,556, $33,962 and $26,569 in the 2015/2016, 2016/2017 and 2017/2018 financial years. The payments were made in amounts that were spread over the years. If he was trying to make sure he was doing everything he could to do things correctly there is no sound basis for why he did not tell the Department employee about his income protection payments and at least some of the detail about them especially when by then they were in such significant amounts.
On 3 October 2018 there was another telephone call with another Department employee. During that phone call Mr Drake discussed matters concerned with his job service provider and even though reference was made to his income protection payments he did not at all refer to anything about reporting what he was receiving by income protection payments and nor was he concerned with inquiring about anything to do with them.
If these calls were typical of the kinds of conversations Mr Drake had with the Department, and there is no reason to doubt that they are not, it seems that whatever Mr Drake was being told by the Department was not based on anything to do with income protection payments or compensation he was receiving from income protection payments. In the conversations as I have said the detail of any payments was not being raised by the one person who knew about them, Mr Drake. Mr Drake’s evidence that he did not mention the income protection payments in those calls because he had raised them so many times before does not really ring true in the context that he had also mentioned, on his version of events, the fact of his business income many times before. Again, Mr Drake’s suggestion that he had said that many times before does not really explain why he did not say it again especially when he says he was trying to make sure he was doing things correctly.
Mr Drake also said that he raised the letters and notices he was receiving from the Department with Department employees many times on the phone and at Department Offices. His evidence was in very general terms. Mr Drake said that he raised the matter of income protection payments with Department employees because he ‘wanted to make sure he complied with his obligations’. He repeated this several times in his evidence by saying things like ‘I would specifically make sure I’m doing the right thing’. These statements are curious given that the letters the contents and number of which spelt out very clearly what his obligations were in written form what ‘doing right thing’ involved.

There is no evidence that Mr Drake raised a particular payment in a particular amount and any attempt to report it. Mr Drake said he took the letters and notices he received to the Department and was told ‘Don’t worry about that. We don’t have a form that comes for your situation. This is what you do…’. He said he was told to report his regular income as nil. There is nothing that would allow a conclusion that Mr Drake was saying anything specific about income protection payments on any of those occasions and much to suggest, in particular the phone conversation in June 2018, that what was being spoken about was his business income. On the two earlier occasions when he did tell the Department about large income protection payments he had received, a debt was raised and neither of those occasions were responsive to him providing tax returns to the Department.
Mr Drake said he was specifically told on every occasion that he discussed reporting with Department employees not to report his income every fortnight because ‘if I received one of these large payments, then the payments [referring to his Newstart Allowance] will stop and will be cancelled’ so that he would continually be having his Newstart Allowance cancelled. I have emphasised the word ‘large’ not just because that was in the answer Mr Drake initially gave when questioned but also because it is a significant qualification to the kinds of payments that, on Mr Drake’s evidence, he was told not to report. Mr Drake on his evidence at least on one occasion was not told to ‘not report’ every payment but only ‘large’ ones. Although at times some of the things he said departed from this it is significant that the word ‘large’ was the word he used in the first answer where the issue arose.
Mr Drake said that in some telephone calls he was told to ‘hand in [his] tax return every 12 months, and that would be all that you were required to do by way of reporting your income’. Mr Drake also said he was told that this process was not unusual for small businesspeople. That was confirmed by one of the phone calls I have referred to. Of course, what made Mr Drake’s circumstance ‘unusual’ was that he was receiving income protection payments. That was something that he did not mention in the phone call I have referred to.
I referred earlier to the fact that Mr Drake had not provided either of his tax returns to the Department for 2015/2016 or 2016/2017 by 27 June 2018 and had not by that date updated his income with the Department since 14 October 2015. He did not provide his 2017/2018 tax return to the Department until 7 March 2019 after being asked to do so by the Department. If he had been told to provide his tax returns every twelve months to report his income his conduct was inconsistent with what he says he was being told, or alternatively he just ignored what he was told.
In any event I do not accept Mr Drake’s evidence that he was told not to report his income protection payments or was told to report them annually when he lodged his income tax returns to the Department for several reasons.
First, Mr Drake’s evidence was general and failed to provide a single specific example of an occasion where he had a conversation about income protection payments and what the terms of that conversation were. Second, his evidence about what he claims to have been told was at odds with the two occasions where records of telephone calls were available. Third, his evidence about being told to provide his tax returns annually was different to what he in fact did. The lack of correlation between what he was told and what he did is not decisive but taken with other factors it points in a particular direction. Fourth, his attempt to suggest that he had had provided his 2015/2016 tax return in September 2017 when he agreed on the telephone with a Department employee on 27 June 2018 that the last time he updated his income was 14 October 2015 damaged his credit on matters of significance. Fifth, over a long time when Mr Drake says he was being told these things by different Department employees there is not a single record that corroborates what he says he was being told and at the same time very many letters and other documents that run contrary to what he claims he was being told. Sixth, I am reluctant to accept Mr Drake’s evidence because it was largely self-serving and uncorroborated. Finally, overall, I found the manner in which Mr Drake gave evidence unpersuasive and was left with the distinct impression that he was attempting to give evidence in a way that he considered best helped his case rather than telling it as it happened.
On 4 March 2019 the Department became aware that Mr Drake had received further income protection payments in the period from 28 December 2017 to 14 February 2019.
On 7 March 2019 Mr Drake provided the Department with a list of all of the compensation payments he had received between 1 January 2013 and 19 February 2019. He also provided copies of his income tax returns for the last three financial years which disclosed that he had been paid $21,556, $33,962 and $26,569 in the 2015/2016, 2016/2017 and 2017/2018 financial years in income protection payments.
On 18 March 2019 the insurer told the Department that it had paid a total of $224,286.62 to Mr Drake in the period 1 January 2013 to 13 March 2019.
On 9 May 2019 Mr Drake’s Newstart Allowance was cancelled with effect from 21 September 2018 because his combined income exceeded the amount that was permitted to be received by a person receiving Newstart Allowance.
On 10 May 2019 a debt in respect of overpaid Newstart Allowance of $52,047.41 was notified to Mr Drake. The debt related to overpayments to Mr Drake of Newstart Allowance in the period 21 January 2015 to 23 April 2019. Mr Drake did not suggest that the quantification of the debt he owed to the Department was incorrect.
ISSUES
There are two issues. First, whether the debt owed by Mr Drake to the Department must be waived under s.1237A of Act because they are attributable to sole administrative error on the part of the Commonwealth and the payments made to Mr Drake were received by him in good faith. Second, there is an issue about whether there are special circumstances such that the debt should on discretionary grounds be waived under s.1237AAD of the Act.
There was no issue about the amount of income protection payments received by Mr Drake over the relevant period, the fact that they were ‘income’ within the meaning of the Act or the quantification of the amount of the debt owed by him to the Commonwealth. I am satisfied that the debt of $52,047.41 is owed by Mr Drake to the Commonwealth because he was overpaid Newstart Allowance between 21 January 2015 and 23 April 2019.
There was no issue raised that suggested that there was a basis for writing off the debt under s.1236(1) of the Act. I am satisfied that there is no reason to believe that the debt is irrecoverable at law, that Mr Drake has no capacity to repay it, that Mr Drake’s whereabouts are unknown or that it is not cost effective to try and recover it.
SOLE ADMINISTRATIVE ERROR
Sub-section 1237A(1) of the Act provides:
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.
The phrase ‘attributable solely to an administrative error’ requires consideration of the reason why a debt arose in the first place. The word ‘solely’ where it qualifies the words ‘to an administrative error’ means ‘only’ or to the ‘exclusion of other things.’ There is no reason why the word in context should not be read as having its ordinary English meaning. The inquiry is concerned with why there is an overpayment and whether objectively the only cause for the debt is an administrative error on the part of the Commonwealth. If the debt is attributable to some other fact or circumstance, even partly so, then the section is not engaged because it is not something that is ‘solely’ attributable to administrative error. In Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190 at [35] Selway J with whom RD Nicholson J agreed said:
The ordinary or usual interpretation of the phrase ‘attributable solely to’ is that it refers to the single or sole cause of the relevant act or event. The word ‘attributable’ means ‘capable of being attributed’. It involves an objective assessment of causation. The words ‘a debt attributable solely to an administrative error’ can be paraphrased as meaning that the only cause that objectively can be ascribed to the relevant debt is an administrative error…
It is important not to lose sight of the fact that the issue involves ascertaining not what the cause of the debt was, but whether administrative error on the part of the Commonwealth was the sole cause of it.
The difficulty for Mr Drake in relation to sole administrative error is that he was told over and over again what the reporting obligations were over a very long period of time. In particular the notices that he received over the period from 15 December 2014 to 21 January 2019 were regular and frequent. They were unambiguous about what was required.
Those notices reflected the legal obligation in s.66A(2) of the Administration Act which provides:
(2) If:
(a) either:
(i) a social security payment (other than utilities allowance or energy supplement under Part 2.25B of the 1991 Act) is being paid to a person; or
(ii) a person holds a concession card; and
(b) an event or change of circumstances occurs that might affect the payment of that social security payment or the person's qualification for the concession card;
the person must, within 14 days after the day on which the event or change occurs, inform the Department of the occurrence of the event or change.
I have rejected Mr Drake’s suggestion that he was told not to report his income protection payments so that his failure to report them very obviously contributed to the error which gave rise to the debt. Had Mr Drake reported the income protection payments when he received them as he was told many times in written form the debt would not have arisen. Mr Drake’s failure to do what the notices he was sent required of him contributed to the error. Having been told over and over again as to what his obligation was to report income that he received by way of lump sum or regular compensation or insurance payments his failure to do that contributed to his debt.
Further, even if it be accepted that Mr Drake was told to report the income protection payments annually by providing his tax returns, he did not do that either. Had he done so the Department would not only have had his business income available but would have known then of the significant amounts of income protection payments that were being paid to Mr Drake in each of the relevant years so that it would have been possible to adjust the Newstart Allowance being paid to Mr Drake for the past and for the future so that any overpayments would not continue to be made. On this alternative analysis the failure to provide that information at the time undoubtedly contributed to the debt. It meant that overpayments would continue to be made over the entire period because as Mr Drake well knew the payments made to him would be adjusted based on the income figures provided. Had Mr Drake provided his tax returns at the end of each 12 months in a timely way the debt would not have arisen as his Newstart Allowance payments would have been adjusted at the end of each financial year to take into account the income protection payments that had been received by Mr Drake. If the tax returns were not provided until sometime well after the end of the relevant financial year because for some reason the accountant had not prepared them or simply because Mr Drake had omitted to hand them over that is not an administrative error attributable to the Commonwealth.
I do not accept that Mr Drake did ‘everything he could possibly do to ensure [he] was complying and being entirely correct in procedures and conduct any reporting and provision of any/all information that was required of [him] as directed by Centrelink staff’. I have set out some of the things that he did not do such as report his income protection payments when he received them, comply with the terms of the notices and letters regularly sent to him by the Department, read those notices carefully and thoroughly and, even if he was told what he says he was told, have prepared and provided to the Department his income tax returns in a timely way each twelve months at the end of the relevant financial year.
To the extent it can be said there was an error on behalf of the Commonwealth, and it is difficult in the circumstances to identify what that may have been, it is certainly not possible to say it was solely an administrative error of the Commonwealth when had Mr Drake complied with his obligations the debt would not have arisen.
As there was no sole administrative error on the part of the Commonwealth the section cannot be satisfied so it is not necessary to consider whether the payments were received in good faith. Section 1237A has no application to the circumstances.
SPECIAL CIRCUMSTANCES
Section 1237AAD 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.
It is not necessary to consider the matters in s.1237AAD(a) because of the view I take about ‘special circumstances’.
‘Special circumstances’ is a broad concept that has its objective enabling a decision maker to deal with the infinite variety of cases that might arise in which some might lead to hardship or unfairness if a debt were to be recovered. The words ‘unusual’ or ‘uncommon’ generally speaking provide some guidance about what may be regarded as ‘special’ but it is best not to lose sight of the fact that the section has as its object the potential need to respond appropriately to particular circumstances. The personal circumstances of a debtor and any financial hardship that may confront them are matters relevant to special circumstances.
It also needs to be borne in mind that the special circumstances are ones that must make it ‘desirable to waive’ such that the scheme of the Act and the Administration Act and their objectives will generally be relevant. In that respect the observations of Brennan J in Read v The Commonwealth [1988] HCA 26; (1988) 167 CLR 57 at 69 albeit in a different context that ‘public expenditure is directed to those who stand in actual need of [the] periodic support…’ should be kept in mind.
In this case there is not much to suggest that there are circumstances that could be described as ‘special’. The fact that Mr Drake, his wife and his son have medical conditions does not of itself indicate the circumstances are ‘special’ in any way. That kind of thing afflicts many members of the community in an infinite variety of circumstances
Mr Drake did not point to anything that would assist in establishing financial hardship. He owns his own house which is unencumbered. He has received and continues to receive income protection payments of about $35,000 per annum. His son receives youth allowance. There does not appear to be any objectively identifiable financial hardship. There is nothing in Mr Drake’s circumstances that indicate there is any objective basis for his ‘fear’ of being unable to support his family if the debt were to be recovered. This is even more so in circumstances where the Department has indicated that Mr Drake can enter into a repayment plan and that it would not require Mr Drake to sell his house.
I am not persuaded that these things are special in so far as providing a basis for waiving a debt that should be repaid to the Commonwealth. The amounts paid by the Commonwealth to Mr Drake which are significant should not have been paid to him. Had he complied with his obligations, they would not have been paid at all. I do not know what happened to the money that should not have been paid to him except some of it was put into Mr Drake’s business to cover business expenses. In any event he is in a better position than most applicants in his situation because of his good fortune in being insured.
There is certainly no injustice to Mr Drake in requiring him to repay what should not have been paid to him in the first place. It would be inimical to one of the main legislative objectives, which to provide for those in need, to waive the debt. There are no special circumstances and far less such circumstance that would make it desirable to waive Mr Drake’s debt to the Commonwealth especially having regard to the fact that over the 2015/2016, 2016/2017 and 2017/2018 financial years he received significant amounts by way income protection payments of $21,556, $33,962 and $26,569.
I am unable to find that there are special circumstances that make it desirable to waive the debt.
CONCLUSION
I affirm the decision under review.

I certify that the preceding 67 (sixty-seven) paragraphs are a true copy of the reasons for the decision herein of Mr Rob Reitano, Member

..................................[sgd]......................................
Associate
Dated: 4 March 2022

Dates of hearing: 10-11 May 2021

Applicant: Self-represented

Solicitors for the Respondent: S Thompson, Services Australia

[2022] AATA 376

4 March 2022

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Procedural Fairness

Statutory Construction

Remedies

Appeal

Dates of hearing:	10-11 May 2021
Applicant:	Self-represented
Solicitors for the Respondent:	S Thompson, Services Australia