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

[2023] AATA 2017

Dwyer and Secretary, Department of Social Services (Social services second review) [2023] AATA 2017 (12 July 2023)

Division:GENERAL DIVISION

File Number:2020/2757 & 2020/2758          

Re:Conor & Marlene Dwyer  

APPLICANTS

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Member Andrew McLean Williams

Date12 July 2023

Place:Brisbane

(1)The Applicants have age pension debts totalling $57,646.77 in the case of Mr Conor Dwyer, and $57,348.65 in the case of Mrs Marlene Dwyer, each referable to the period from 23 November 2011 until 16 January 2019;

(2)The Commonwealth’s right to recover that proportion of the debts accrued in the following periods is now waived, pursuant to s.1237A of the Social Security Act 1991 (Cth):

-    4 December 2015 to 31 July 2016; and

-    1 March 2018 to 16 January 2019.

......................[SGD]......................

Member Andrew McLean Williams

CATCHWORDS

SOCIAL SECURITY – Overpayment of age pension – where Applicants erroneously indicated they held market-linked income stream instead of allocated income –  whether debt attributable solely to administrative error by the Commonwealth – whether debt or part of debt would be waived or written off – whether special circumstances apply – decision under review varied

LEGISLATION

Administrative Appeals Tribunal Act 1975 (Cth)

Security (Administration) Act 1999 (Cth)

Social Security Act 1991 (Cth)

CASES

Angelakos v Secretary, Department of Employment and Workplace Relations

[2007] FCA 25

Beadle v the Director-General of Social Security (1984) 6 ALD 1

Davy v Secretary, Department of Employment and Workplace Relations [2007] AATA 1114

Gerhardt v Secretary, Department of Employment, Education and Training [1996] AATA 173

Groth v Secretary, Department of Social Security (1995) FCA 1708,

Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484

Panacci v Secretary, Department of Employment and Workplace Relations [1] (2008) AATA 30

Secretary, Department of Family and Community Services v Sekhon [2003] FCA 76

Secretary, Department of Social Services v Hales (1998) 82 FCR 154

REASONS FOR DECISION

Member Andrew McLean Williams

12 July 2023

BACKGROUND AND CONTEXT:

1. Mrs Marlene Dwyer and Mr Conor Dwyer (together ‘the Applicants’) are husband and wife. Their separate applications for review (matters 2020/2757 and 2020/2758 respectively) have been heard together, on the basis that their cases are essentially identical, and arise out of the same set of facts and circumstances.

2. The Applicants are the beneficiaries of the Yorkdene Pty Ltd Superannuation Fund (‘the Yorkdene Fund’), a self-managed superannuation fund (‘SMSF’). They retired on

   
   

   1 July 2006, whereupon the Yorkdene Fund went into what is termed the ‘pension’ phase.

3. From 1 July 2006 until November 2011 the Applicants lived as fully self-funded retirees, drawing all of their financial requirements from the Yorkdene Fund.

4. In November 2011, and following an increase in the asset test limit for eligibility to receive the age pension, the Applicants lodged claims for aged pension as well as the pension bonus, with Centrelink (‘the Agency’). As part of that, the following forms were completed and signed by the Applicants and lodged over the counter, at the Robina Branch:

   ·Claim for Age Pension and Pension Bonus, signed on 24 November 2011;

   ·Income and Assets form, signed on 24 November 2011;

   ·

   Details of Income Stream Product form – Conor Dwyer, signed by Mr Dwyer on

   
   

   29 November 2011;

   ·Details of Income Stream Product form – Marlene Dwyer, signed by Mrs Dwyer on 29 November 2011.

5. The two Details of Income Stream Product forms dated 29 November 2011 become especially relevant on this Application for Review. On each form, the Applicants had indicated that they were 50% owners of the Yorkdene Fund. Question 10 on page three of the form required that the Applicants indicate the type of income stream that they received from the Yorkdene Fund. It posited four possible alternatives: ‘Allocated’, ‘Lifetime, Life Expectancy or Term’, ‘Market-Linked’, or ‘Defined Benefit’. Of the four available options, only the meaning of ‘Defined Benefit’ was explained on the form.

6. It was Mr Dwyer who had completed the necessary forms in the application for age pension on behalf of both himself and his wife. When answering question 10, Mr Dwyer checked the box indicating that he and Mrs Dwyer had ‘market-linked’ income streams.

7. With the great benefit of hindsight, this choice was mistaken, as the Applicants did not ever receive ‘market-linked’ income streams from the Yorkdene Fund. Rather, theirs were always ‘allocated’ pensions, not that this had been understood by Mr Dwyer at the time.

8. Mr Dwyer explained the rationale for his having checked the ‘market-linked’ box on the form as follows:

   As the asset value of our Self-Managed Superannuation Fund was based on the value of shares on the Australian stock market and value of units in investment funds managed by financial institutions, we ticked market-linked income stream. Our rationale in marking market-linked income stream was/is in line with money moneysmart.gov.au issued by [the] Australian Security and Investments Commission [which] defines market-linked as [a] “pooled investment scheme where the value of the investment depends on the movement of a particular market”. It further states “How we revalue them: - market-linked investment values change as markets go up and down. We revalue your market-linked investments shares and securities on 20 March and 20 September each year. We either get the new values from the latest unit prices we have, or ask you for the latest values”.

   Furthermore, the Cambridge Business English Dictionary defines ‘market-linked’ as: “used to describe a financial product that is related to the performance of the stock market”. The lack of explanation in the definition of terms [on the form], led to [our] confusion in providing information.[1]

   [Emphasis in original]

   [1] Witness statement of the Applicants, signed on 11 September 2021, paragraph 5.

9. During the Tribunal hearing on 29 September 2022, Mr Dwyer elaborated on this:

   I’ve been involved in the financial services industry for a career. When I opened that form, I looked at market-linked and, to me - [who] hadn’t been involved with ASIC for many years - the description of market-linked in ASIC is a relationship between the value of products and [the] market which goes up and down, and I also, at the time, looked up a business definition of market-linked, and I got one from the Cambridge University, and it’s a similar definition as per ASIC. So, that was my reason for ticking market-linked. On top of that, the form that I completed, did not actually define market-linked within the terms of the Social Security Act. So, I acted on the knowledge that I had over a period of many years.[2]

   [2] Transcript, 29 September 2022, p.22 lines 8 – 17.

10. On 21 January 2012, the Agency wrote to the Applicants to advise that they were to be granted the age pension. That letter expressed, in part: ‘Thank you for your recent claim for age pension. After carefully considering your individual circumstances, a decision has been made to grant this payment from 23 November 2011.’

11. For a number of years thereafter the Applicants continued to receive age pension, in varying amounts, until this was suspended, on 8 January 2019, because of concerns that had arisen by that stage that Mr and Mrs Dwyer had not ever been eligible to receive the age pension.

12. An investigation ensued. On 25 January 2019 each of the Applicants’ age pension entitlement were cancelled, it by now having been determined that their combined total assets exceeded the asset test limit for receipt of the age pension.

13. On 17 October 2019, Centrelink – by now re-styled as ‘Services Australia’ (yet still here ‘the Agency’) – raised age pension debts against Mr Dwyer in the amount of $52,398.91 for a debt covering the period from 23 November 2011 to 16 January 2019; and against

    
    

    Mrs Dwyer in the amount of $52,151.15 covering the period from 23 November 2011 to

    
    

    2 January 2019. Both debts were expressed as having arisen because the Applicants’ allocated superannuation pension from the Yorkdene Fund had been incorrectly assessed as emanating from a ‘market-linked’ income stream (‘the original decision’).

14. Each of the Applicants requested a review of the original decision.

15. On 11 December 2019 an Authorised Review Officer (‘ARO’) varied the original decision. The change made at this stage by the ARO was only in respect to the quantum of the debts, and was expressed as having become necessary in consequence of a prior computational error, as detected by the ARO, arising because of an incorrect application of asset values during a particular period in the original decision’s calculations of their age pension entitlements.

16. Now, after correction, the debts were revised upwards, and assessed as $57,646.77 in the case of Mr Dwyer, and $57,348.65 in the case of Mrs Dwyer (‘the internal review decision’)

17. On 5 February 2020 Mr and Mrs Dwyer sought another review, this time of the internal review decision, before the Social Security and Child Support Division (‘the SSCSD’) of the Tribunal.

18. The matter was heard on 2 April 2020 by telephone by Member Byers. Mr and Mrs Dwyer were represented during the SSCSD Review by their accountant, Mr Alan Miller, of Byrne & Miller. Member Byers set aside the internal review decision on 11 December 2019. Instead, the SSCSD substituted a decision that:

    1Mr and Mrs Dwyer each had aged pension debts as previously calculated by the ARO; yet

    2the proportion of each debt accrued during the period from 1 March 2018 until 16 January 2019 should be waived, due to ‘sole administrative error’ by the Agency (‘the SSCSD decision’)

19. On 6 May 2020 the Agency acted in furtherance of the direction embodied in the SSCSD decision and implemented the 1 March 2018 to 16 January 2019 debt waiver. In consequence, the aged pension debts reduced somewhat, and became $47,959.92 and $47,979.17, respectively (‘the age pension debts’)

20. On 11 May 2020, the Applicants each filed separate Applications for Review in the General Division of the Tribunal seeking another review, this time in respect of the decision made by Member Byers in the SSCSD.

21. In that part of the application for review form that requests Applicants to express the reasons why they believe that the decision under review to be wrong, Mrs Dwyer expressed her view as follows:

    I do not understand why Centrelink agreed that my husband and I were entitled to a part pension back in 2011, and then seven years later say we were not entitled and that we had to pay back all [the] payments made to us. Why did it take seven years for Centrelink to inform us of that decision?

    We accepted the payments in good faith, believing we had supplied the correct details right from the outset. I believe Centrelink have been negligent in allowing our situation to fester for so long.[3]

    [3] T Documents (Marlene Dwyer) (‘MT’), T1, p.4

22. In his Application for Review, Mr Dwyer expressed the reasons for seeking another review in these terms:

    I believe the decision is not reasonable and that [the] evidence provided supports the view that the waiver of the debt should be effective from an earlier date.

    I have concerns that discussions were primarily based on documentation provided by Centrelink and that information provided by me and my representative was secondary.

    I also find the Tribunal member’s comment “the fact Mr and Mrs Dwyer are able to repay the debts” in paragraph 49 of reason for discussion [sic] to be most concerning and presumptive. In these uncertain times, due to Covid -19. As a self funded retiree, I received no benefits under the social security system.

    Factual Circumstances:

23. Although there remains a considerable difference of opinion regarding the conclusion that should now be drawn by the Tribunal regarding the treatment of the age pension debts, the factual circumstances giving rise to the debts is a matter that is largely uncontentious. The factual circumstances necessary to unpack and understand the nature of the problem are as follows:

24. On 23 November 2011, and after a number of post-retirement years in which Mr and Mrs Dwyer had lived as fully self-funded retirees, the Applicants contacted the Agency expressing an intention to claim for an age pension.[4]

    [4] T Documents (Conor Dwyer) (‘CT’) T103, p.1238; MT89, p.1265.

25. On 6 December 2011 the Applicants lodged claim forms for age pension and the ‘pension bonus’ with the Agency.[5] As part of the application process the Applicants also each lodged Details of Income Stream Product forms.

    [5] CT103, p.1238; MT89, p.1265.

26. In these forms, the Applicants declared:

    (a)they were the joint owners of the Yorkdene Pty Ltd Super Fund, which was an income stream paid from an SMSF.

    (b)

    the income stream was a ‘market-linked’ income stream, purchased on

    
    

    1 July 2006.

    (c)The income stream met the required characteristics under section 9BA of the Social Security Act 1991 (Cth) such that it was eligible to retain ‘asset test exempt’ status;

    (d)the initial purchase price had been $464,586.99. On the form, an initially inserted higher amount of $929,173.98 had been struck out, before the lesser amount (i.e. half the original figure) had been inserted instead;

    (e)the account balance of the income stream (as at 1 July 2011) was $318,816.08. Similarly, a higher amount of $637,632.16 had been struck out, before this lesser sum (half the original figure) had been inserted instead; and

    (f)the current account balance of the income stream (as at 31 October 2011) was $286,861.47. Again, an originally inserted figure, twice the final amount ($573,722.94) had been struck out, before being replaced by the final hand-written lower figure.

27. On 21 January 2012, the Agency wrote to the Applicants to advise that they were to be granted an age pension, with effect from 23 November 2011.[6] This correspondence also advised that the Agency had recorded an amount of $423,740.00 as the Applicants’ total combined asset amount, and that the Applicants were required to advise the Agency within 14 days if their combined assets, other than financial investments, were more than $421,520.00.

    [6] ST), page 18; CT103, page 1241; MT89, page 1265.

28. On 21 January 2012 the Agency also provided the Applicants with an Income and Assets Statement, outlining the income and asset details that the Agency now held on file for the Applicants.[7] This correspondence similarly requested that the Applicants advise the Agency within 14 days if any of the details contained in the statement were incorrect, and specified that the Agency had recorded the Applicants as having an allocated income stream, with an asset value of $143,430.00.

    [7] ST3, p.24.

29. On 23 January 2012 the Agency provided the Applicants with a Centrelink statement which outlined various information about the Applicants’ pension payments, income, and other details.[8] This correspondence again requested that the Applicants contact the Agency within 14 days if their circumstances had changed, or if the details listed in the statement were incorrect, and specified that the Agency had recorded the Yorkdene Fund as having a total asset value of $143,430.00.

    [8] ST4, p.28-32.

30. On 11 April 2012 the Agency wrote to the Applicants advising that their rate of age pension had been reduced, because the total value of their combined assets had increased to $475,426.00.[9] This correspondence also advised the Applicants that they were required to advise the Agency within 14 days if their combined assets, other than financial investments, were more than $364,934.00, and if their combined financial investments were more than $168,566.00.

    [9] ST5, p 38.

31. On 18 April 2012 the Agency provided the Applicants with another Income and Assets Statement outlining the income and assets details that the Agency held on file for the Applicants.[10] The correspondence requested that the Applicants notify the Agency within 14 days, in the event that any of the details in the statement were incorrect, and also stated that the Agency had recorded the Applicants as having an allocated income stream, with an asset value of $143,430.00.

    [10] ST6, p.44.

32. On 19 April 2012 the Agency provided the Applicants with a Centrelink statement which outlined information about the Applicants’ age pension payments, income and other details.[11] The correspondence requested that the Applicants contact the Agency within

    
    

    14 days in the event that their circumstances had changed or if the details listed in the statement were incorrect, as well as advising the Applicants that the Agency had recorded the Yorkdene Fund as having a total asset value of $143,430.00.

    [11] ST7, p.48.

33. On 30 May 2012 the Agency provided Mr Dwyer with an Income and Assets Statement outlining the income and asset details the Agency held on file for the Applicants.[12] The correspondence requested that Mr Dwyer advise the Agency within 14 days if any of the details in the statement were incorrect, as well as advising that the Agency had recorded the Applicants as having an allocated income stream, with an asset value of $143,430.00.

    [12] CT18, p.297.

34. On 13 November 2012 the Agency wrote to the Applicants, requiring they provide necessary information regarding any income streams being paid from a self-managed superannuation fund.[13] These forms had been pre-filled by the Agency to reflect that the Applicants held ‘allocated’ income streams from an account-based pension, and requested that the Applicants provide the account balances as at 1 July 2012. The form also requested the Applicants provide updated details in the event that any of the information already contained on the form was incorrect.

    [13] CT20, p.301; MT17, p.294; ST8, p.60.

35. On 19 December 2012 the Applicants provided the Agency with the completed income stream forms.[14] Mr Dwyer advised that his account balance as at 1 July 2012 was $360,580.00 and Mrs Dwyer advised that her account balance was $254,464.00.

    [14] CT22, p 305; MT19, p.297.

36. On 26 February 2013 an employee within the Agency amended the Agency’s internal records, to reflect the Applicants as holding market-linked income streams instead of allocated income streams. Although no evidence was lead before the Tribunal to explain the basis for this change, it was seemingly made after the Agency staff member had identified that the Applicants had originally declared that they held market-linked income streams. The effect of this change was that the Applicants were now recorded as having market-linked income streams with a value of $180,290.00 and $127,232.00 respectively (these amounts being 50% of the amounts previously declared by the Applicants on

    
    

    19 December 2012).[15]

    [15] MT89, p.1274.

37. On 26 February 2013 the Agency wrote to the Applicants and advised that the amount of their aged pension had reduced, because the combined value of their total assets had increased.[16] The 26 February 2013 correspondence also advised the Applicants that the Agency had recorded an amount of $496,088.00 as the Applicants’ total combined asset amount, and that the Applicants were required to advise the Agency within 14 days if the value of their combined assessable assets change by $1,000.00 or more, or if there was a change of $2,000.00 or more to the Applicants’ financial investments.

    [16] CT25, p.311; MT21, p.300.

38. On 4 July 2013 the Agency wrote to the Applicants to advise of their ongoing age pension payment rates.[17] This correspondence also advised the Applicants that the Agency had recorded an amount of $496,088.00 for the Applicants’ total combined asset amount and that the Applicants were required to tell the Agency within 14 days if the value of their combined assessable assets change by $1,000.00 or more, or if there was a change of $2,000.00 or more to the Applicants’ financial investments.

    [17] CT27, p.316.

1. On 5 August 2013 and on 13 November 2013, the Agency wrote to the Applicants requiring that they provide information regarding any market-linked income streams being paid from a self-managed superannuation fund.[18] These forms had been pre-filled by the Agency so as to state that the Applicants held a ‘market-linked’ income stream from self-managed superannuation, yet requested that the Applicants provide updated details in the event that any of the information contained on the form was incorrect.

   [18] CT30, p.321; ST9, p.65.

2. On 11 December 2013, the Applicants provided the Agency with the completed income stream forms.[19] Mr Dwyer advised that his account balance as at 1 July 2013 was $368,154.00 and Mrs Dwyer advised that her account balance was $274,944.00.

   [19] MT28, p.334.

3. On 11 December 2013, an employee within the Agency processed the income stream forms that had been provided by the Applicants earlier that day. After processing, the Applicants were recorded as having market-linked income streams with a value of $184,077.00 and $137,472.00 respectively (these amounts being 50% of the amounts declared by the Applicants on 11 December 2013).[20]

   [20] CT103, p.1259.

4. Also on 11 December 2013, the Agency wrote to the Applicants and advised that their aged pensions had reduced, because the combined value of their total assets had increased.[21] The Agency also advised that it had recorded an amount of $510,115.00 as the Applicants’ total combined asset amount and that the Applicants were required to advise the Agency within 14 days if the value of the combined assessable assets change by $1,000.00 or more, or if there was a change of $2,000.00 or more to the Applicants’ financial investments.

   [21] CT32, p.325; MT26, p.309.

5. On 10 March 2014 the Agency wrote to the Applicants to advise of their ongoing age pension payment rates.[22] This correspondence also advised that the Agency had recorded an amount of $504,979.00 as being the Applicants’ total combined asset amount and that the Applicants were required to advise the Agency within 14 days if the value of their combined assessable assets change by $1,000.00 or more, or if there was a change of $2,000.00 or more to the Applicants’ financial investments.

   [22] CT36, p.355; MT32, p.344.

6. On 24 October 2014 the Agency again wrote to the Applicants to advise of their ongoing age pension payment rates.[23] The letter advised that the Agency had recorded an amount of $504,979.00 as being the Applicants’ total combined asset amount and that the Applicants were required to advise the Agency within 14 days if the value of their combined assessable assets change by $1,000.00 or more, or if there was a change of $2,000.00 or more to their financial investments.

   [23] CT40, p.362; MT34, p.347.

7. On 21 November 2014 the Applicants provided the Agency with the requested material, via an online update.[24] In the update, Mr Dwyer reported that his account balance was $415,815.00 as at 1 July 2014, and Mrs Dwyer reported that her account balance as at that date was $286,011.00.

   [24] CT103, p.1262; MT89, p.1278.

8. On 3 December 2014 the Agency wrote to the Applicants and advised that their age pension entitlement had reduced, because the combined value of their total assets had increased.[25] This correspondence also advised that the Agency had recorded an amount of $534,343.00 as the Applicants’ total combined asset amount and stated that the Applicants were required to advise the Agency within 14 days if the value of their combined assessable assets change by $1,000.00 or more, or if there was a change of $2,000.00 or more to the Applicants’ financial investments.

   [25] CT42, p.365; ST11, p.81.

9. On 4 August 2015 and on 16 November 2015 the Agency wrote to the Applicants requiring that they provide information regarding their market-linked income streams.[26] These forms were pre-filled by the Agency to already indicate that the Applicants held market-linked income streams from a market-linked income stream provider.

   [26] CT45, p.372; MT37, p.352; ST12, p.83.

10. On 3 December 2015 Mr Dwyer provided the Agency with the requested material, via an online update.[27] In the update, Mr Dwyer reported that the amount in the account as at

    
    

    1 July 2015 was $339,772.00.

    [27] CT103, p.1263.

11. On 4 December 2015 the Applicants provided Centrelink with pension payment information statements for the Yorkdene Pty Ltd Superannuation Fund for the 2015 – 2016 financial year.[28] The financial statements reported that:

    [28] CT46, p.375.

    (a)

    Mr Dwyer held two account-based pensions that were purchased on

    
    

    1 July 2007, and that their account balances as at 1 July 2015 were $85,501.04 and $339,772.84; and

    (b)

    Mrs Dwyer held two account-based pensions that were purchased on

    
    

    1 July 2007, and that their account balances as at 1 July 2015 were $86,510.42 and $206,367.97.

12. On 4 December 2015 and on 2 May 2016 the Agency wrote to the Applicants to advise of their ongoing age pension payment rates.[29] This correspondence reported that the Applicants had a combined annual income of $28,698.20 and $28,664.16 respectively, yet did not advise a total combined assets figure.

    [29] CT47, p.379; CT50, p.389; MT39, p.359; MT41, p.366.

13. On 1 August 2016 and on 14 November 2016 the Agency wrote to the Applicants requiring that they provide information regarding their market-linked income streams.[30] These forms had been pre-populated, to state that the Applicants held market-linked income streams from a market-linked income stream provider.

    [30] CT53, p.396; MT44, p.373; ST13, p.95.

14. On 3 December 2016 the Agency wrote to the Applicants and advised that their age pension had changed, due to a change in their circumstances.[31] This correspondence also advised the Applicants that the Agency had recorded an amount of $542,505.50 for the Applicants’ total combined asset amount and indicated that the Applicants were required to advise the Agency within 14 days if the value of their combined assessable assets change by $1,000.00 or more, or if there was a change of $2,000.00 or more in the Applicants’ financial investments.

    [31] CT54, p.398; MT45, p.375.

15. On 7 December 2016 the Applicants provided the Agency with the requested material, via an online update.[32] In this update Mr Dwyer reported his account balance (as at
    

    [32] CT103, p.1266; MT89, p.1281.

    [33] Secretary’s Statement of Facts and Contentions dated 22 December 2020, at paragraph 122.

    1 July 2016) had been $390,673.00, and Mrs Dwyer reported that her account balance was $261,205.00. These two figures, when combined, mean that the Applicants had combined assets of $651,878.00, meaning that the Applicants had duly advised the Agency within 14 days of the notice dated 3 December 2016 of their having combined assets exceeding the Agency-recorded amount of $542,505.50. Although the Respondent Secretary contends[33] that the Applicants had ‘failed’ to notify the Agency within 14 days if their combined assets exceeded $542,505.50, that contention cannot be accepted by the Tribunal, as it is clear that Mr and Mrs Dwyer did advise the agency in the manner required by means of their information update to the Agency on 7 December 2016. It would seem therefore that the only error that persisted after 7 December 2016 was the failure by the Applicants to correct the Agency having recorded them as the recipients of market-linked income streams.

16. On 19 April 2017 the Agency wrote to Mr Dwyer and advised him about his ongoing age pension payment rate.[34] This correspondence also advised that the Agency had recorded an amount of $542,505.50 as the Applicants’ total combined asset amount.

    [34] CT56, p.404.

17. On 9 October 2017 the Agency wrote to the Applicants to advise them of their ongoing age pension payment rates.[35] This correspondence advised the Applicants that they had a combined annual income of $28,175.72, yet did not advise of a total combined assets figure.

    [35] CT59, p.409; MT48, p.381.

18. On 31 July 2017 and on 13 November 2017 the Agency wrote to the Applicants requiring that they provide information regarding their market-linked income streams.[36] Forms sent by the Agency had been pre-populated to indicate that the Applicants held market-linked income streams from a market-linked income stream provider.

    [36] CT60, p.411; MT48, p.379; ST14, p.107.

19. On 15 November 2017 the Applicants provided the Agency with the requested material, via another online update.[37] In this update Mr Dwyer reported that his account balance was $418,168.00, as at 1 July 2017, and Mrs Dwyer reported that her account balance was $280,438.00.

    [37] CT103, p.1268; MT89, p.1283.

20. On 16 February 2018 the Agency suspended the Applicants’ age pension as they had not responded to an income stream review letter.[38] On 20 February 2018 Mr Dwyer provided the Agency with the previously requested income stream details, reporting the account balance was $418,168.00, as at 1 July 2017.[39]

    [38] CT62, p.415; MT49, p.383.

    [39] CT103, p.1272.

21. On 20 February 2018, the Agency wrote to Mr Dwyer to advise him of his ongoing age pension payment rates.[40] This correspondence advised Mr Dwyer that the Applicants had a combined annual income of $34,399.56, yet did not advise of the total combined assets figure.

    [40] CT64, p.420.

22. Also on 20 February 2018, the Agency was contacted by Ms Tracy Bashford, an employee of the Applicants’ accountants, Byrne & Miller MGA Pty Ltd. File notes indicate that Ms Bashford spoke to the financial information service telephone service and advised the Agency that the Applicants each held two account-based pensions. The file note also indicates that the Applicants had been recorded as having market-linked pensions, based on their reporting in the Details of Income Stream Product forms; and that further material was requested from Ms Bashford, in order to perform an assessment, as market-linked pensions include a 50% asset exemption.[41]

    [41] CT103, p 1273.

23. On 20 February 2018, and 21 February 2018 the Agency wrote to the Applicants to advise that their age pension had been recommenced.[42] On 21 February 2018, the Agency wrote to the Applicants and provided a Centrelink statement for age pension.[43] By means of the statement, the Agency advised the Applicants that they had been recorded as having market-linked income streams with current account balances of $390,673.00 and $261,205.00 respectively, with those streams having assessable balances of $195,336.00, and $130,602.00.

    [42] CT65, p.422; MT50, p.385.

    [43] CT66, p.425; MT51, p.388.

24. On 21 February 2018 the Agency was further contacted by Ms Bashford, this time via
    

    [44] CT67, p.429; MT52, p.391.

    email, requesting that material regarding the Applicants’ initial age pension claim and material regarding internal changes made to the Applicants’ pension status be provided to her.[44]

25. On 2 May 2018 Mr Dwyer confirmed with the Agency that the Applicants held account-based income streams, and not market-linked streams as had been recorded by the Agency.[45] The Agency then wrote back to Mr Dwyer and requested that he complete and provide a Details of Income Stream Product form, for both himself and for Mrs Dwyer, provide current member statements for all income stream products he and Mrs Dwyer held, as well as to provide the most recent self-managed super fund tax return.[46] On 10 May and 13 May 2018 the Agency received these requested materials from the Applicants.[47]

    [45] CT103, p.1275.

    [46] CT69, p.431.

    [47] CT70, p.434; CT71, p.504; MT54, p 393; MT55, p.499.

26. On 31 July 2018 and on 13 November 2018, the Agency wrote to the Applicants requiring that they provide information regarding their market-linked income streams.[48] These forms had been pre-filled by the Agency and still indicated that the Applicants held market-linked income streams from a market-linked income stream provider.

    [48] CT73, p.585; MT57, p.580; ST15, p.119.

27. On 4 December 2018 and 5 December 2018, the Applicants provided the Agency with the requested information, via an online update.[49] In this update, Mr Dwyer reported that his account balance was $415,129.00 as at 1 July 2018, and Mrs Dwyer reported that her account balance was $277,800.00 as at that same date.

    [49] CT103, p.1279; MT89, p.1287.

28. On 8 January 2019 the Applicants’ age pension entitlements were initially suspended,[50] and on 25 January 2019 the Applicants’ age pensions were altogether cancelled, once it had been determined that their total combined assets exceeded the asset test limit for eligibility to receive the age pension.[51]

    [50] CT78 p.596; MT61 p.589.

    [51] CT103, p.1282; MT89, p.1289.

29. On 17 October 2019, the Agency raised debts of $52,398.91 and $52,151.15 respectively against the Applicants for the period 23 November 2011 - 16 January 2019, and
    

    [52] CT91, p.919; MT76, p.947.

    23 November 2011 - 2 January 2019. These debts were raised on the basis that the Applicants had been overpaid during the debt periods, due to the correct asset amount of the income stream not having been taken into account.[52]

30. On 11 December 2019 an Authorised Review Officer reviewed the decisions to cancel the Applicants’ age pension and to raise the age pension debts. In the internal review decision, the ARO:

    (a)Affirmed the decision to cancel the Applicants’ age pension on the basis that the Applicants’ total combined assets amount of $876,359.00 exceeded the assets test limit of $848,000.00; and

    (b)Varied the decision to raise aged pension debts against the Applicants, noting that the initial debt calculation was incorrect, finding instead that the Applicants had aged pension debts of $57,646.77 and $57,348.65 respectively for the period 23 November 2011 until 16 January 2019[53] (‘the internal review decision’).

    [53] CT92, p.922; MT78 p.951.

31. On 2 April 2020 the SSCSD set aside the internal review decision, and substituted a new decision, affirming the age pension debts as had been calculated by the ARO, yet waiving that portion of the debts accruing in the period between 1 March 2018 and 16 January 2019 on the basis of ‘sole administrative error’.[54] When doing so, Member Byers had noted that Ms Bashford had advised the Agency on 20 February 2018 that the Applicants were erroneously recorded by the Agency as having income streams from market-linked investments, when in reality these were derived from an account-based source. Yet, despite Ms Bashford’s correcting advice, the Agency had persisted in calculating their age pension entitlements on an incorrect basis.

    [54] CT2, p.9.

32. On 11 May 2020 the Applicants commenced this Application for Review.[55]

    [55] CT1, p.1; MT1 p.1.

    Contentions before the Tribunal

33. In their Statement of Facts Issues and Contentions (‘SFIC’) given in reply,[56] the Applicants ultimately summarised their contentions before the Tribunal as follows:

    ·the age pension debts (the amount of which is not in dispute) arose solely because of administrative error, by the Agency;

    ·notwithstanding that the Applicants had erroneously indicated on their original age pension application forms that their income stream from the Yorkdene Fund was ‘market-linked’, when the Agency assessed the applications, it had deemed the income streams to be from an ‘allocated’ income stream;

    ·the Agency had applied a ratio of 50% of combined asset values in calculating the amount of age pension entitlement, instead of 100% of combined asset values, which applies in the case of an allocated income stream. Again, this is an instance of ‘sole administrative error’, by the Agency;

    ·The amendment made by the Agency in February 2013 in respect to the type of product was incorrect. Had the Agency properly considered the content of the Applicants’ files in February 2013, then the Agency would have realised that the required change related to the percentage ratio applicable to an allocated income stream, rather than for a change to the type of product from ‘market-linked’ to ‘allocated’. Again, this was an instance of ‘sole administrative error’ by the Agency.

    [56] Submitted to the Tribunal under cover of correspondence dated 4 April 2021.

34. Conversely, the Respondent Secretary now contends:

    (a)the Applicants received age pension payments in excess of their entitlement during the period from 23 November 2011 until 16 January 2019;

    (b)at law, these excess payments are now categorizable as debts due to the Commonwealth;

    (c)those portions of the debt accrued between 4 December 2015 and 31 July 2016 and between 1 March 2018 and 16 January 2019 can be waived, pursuant to section 1237A of the Act (ie: ‘sole administrative error’ by the Agency); and

    (d)there are no other legal grounds by which to either ‘write-off’ or ‘waive’ any of the remainder of the debts.

    Issues for Resolution by the Tribunal:

35. On the hearing of this Application for Review, the issues become:

    (a)Whether the Applicants were paid in excess of their entitlement to aged pension during the period from 23 January 2011 until 16 January 2019;

    (b)If there was an overpayment, whether that now constitutes ‘a debt to the Commonwealth’; and;

    (c)If there is a debt to the Commonwealth, whether any part of it may be either ‘written-off’, or ‘waived’.

    Relevant law and policy:

36. The applicable legislative regime is contained in the Social Security Act 1991 (Cth) (‘the Act’); and in the Security (Administration) Act 1999 (Cth) (‘the Administration Act’). Eligibility for age pension is means tested, meaning that those applicants who are assessed as having sufficient independent means to provide their own income in retirement will not qualify for an age pension. To this end, s.55(a) of the Act provides that a person’s age pension rate is determined in accordance with Pension Rate Calculator A, as is set out at the end of s.1064 in the Act.

37. Relevantly, Pension Rate Calculator A includes, as part of the rate calculation process, a requirement for reductions in age pension entitlements in the case of both income from other sources, and because of the ownership of assets. If both of these are applicable, then only the greater of two is applied, such that the rate of age pension payment is calculated on the basis that whichever of either the ‘income test’ or the ‘asset test’ results in a lower rate of pension. Paragraph 4.2.3 of the Guide explains how the ‘pensions assets test’ applies:

    The pensions assets test applies to all pensions. The assets test is only applied where a person’s assets exceed the allowable limits for full pension. If assets exceed the allowable limits pension entitlement is assessed by:

    ·calculating the rate payable under the assets test, and

    ·comparing that with the rate payable under the income test.

    The asset test only applies if it produces a lower rate of payment than the income test.

38. The Respondent Secretary contends that, for the period from 23 November 2011 to

    
    

    31 December 2016, the Applicants were paid age pension, yet without taking into account their correct total combined asset amount as required by the Act, such that the Applicants were paid more than their legal entitlement. Furthermore, during the period from

    
    

    1 January 2017 until 16 January 2019, the Applicants held total combined assets that well-exceeded the asset value limit for age pension entitlements, meaning that they had ‘nil’ entitlement to age pension during that period because they held too many assets.

39. The actual total combined asset values for the assets held by the Applicants – after these had been re-assessed by the Secretary after the provision of further information by the Applicants to the Agency in 2018 and 2019 – are as now set out at CT98, p.1038, and at MT84, p.1066.

40. In the Applicants’ cases, the correct application of the assets test – so as to properly calculate the rate of their age pension entitlement over the duration of the debt period – is as is now shown in the debt calculations produced at CT98,[57] at page 1007, and at MT84,[58] page 1035. The overpayments calculated on that basis are $57,646.77 and $57,348.65 respectively.

    [57] CT being the T Documents referable to Mr Conor Dwyer.

    [58] MT being the T Documents referable to Mrs Dwyer.

1. The value of their combined assets was not challenged by the Applicants when they were previously before the SSCD, such that the Tribunal here proceeds on the footing that the asset values are agreed.

   Legal Characterisation of an Overpayment of Age Pension:

2. Section 1223(1) of the Act provides that if a social security payment is made, and the person who obtains the benefit of that payment was not for any reason entitled to that benefit, then the amount of the payment becomes a ‘debt’, due to the Commonwealth.

3. At the outset, it is to be noted that there is an expectation that public monies that are paid to individuals as social security payments who are not entitled to those payments will then be recovered. In Secretary, Department of Social Services v Hales (1998) 82 FCR 154 at 155, Justice French (as he then was), explained the public policy intent underpinning s.1223 in these terms:

   The taxpayer is entitled to expect that in the ordinary course money paid to people which they are not entitled to receive will be recovered, albeit in a way appropriate to the circumstances which led to the overpayment in the circumstances of the persons concerned.

4. The Tribunal can see no basis to dispute the calculation of the age pension overpayments. And, indeed, the Applicants do not seek to challenge the calculation of the quantum of the overpayment, having chosen instead to concentrate their firepower on the question as to who should now be responsible for the fact of the overpayment, which the Applicants contend should only be the Respondent. This becomes the ‘key issue’ for resolution by the Tribunal.

   Avoidance of a Debt Arising Under s.1223 of the Act:

5. There are only two mechanisms available under the Act that might permit a properly raised debt of social security overpayment to not be recovered from the recipient of the overpayment. These are either write-off, or waiver.

   Ability to ‘Write-off’ a Social Security Debt

6. Section 1236 of the Act gives the Secretary the power to write-off the debt for a stated period, on the proviso that one or more of the pre-requisites in s.1236(1A) have been met. If a debt is written off pursuant to s.1236, then the debt will not be recovered at the point in time when it is written off, however the debt still exists, and it may still be recovered at some stage in the future.

7. Relevantly, s.1236 provides:

   Secretary may write off debt

   (1)Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.

   (1A)The Secretary may decide to write off a debt under subsection (1) if, and only if:

   (a)the debt is irrecoverable at law; or

   (b)the debtor has no capacity to repay the debt; or

   (c)the debtor's whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or

   (d)it is not cost effective for the Commonwealth to take action to recover the debt.

   (1B)For the purposes of paragraph (1A)

   (a), a debt is taken to be irrecoverable at law if, and only if:

   (b)there is no proof of the debt capable of sustaining legal proceedings for its recovery; or

   (c)  the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or

   (d)the debtor has died leaving no estate or insufficient funds in the debtor's estate to repay the debt.

   (1C)For the purposes of paragraph (1A)(b), if a debt is recoverable by means of:

   (a)deductions from the debtor's social security payment; or

   (b)deductions under section 84 of the A New Tax System (Family Assistance) (Administration) Act 1999 ; or

   (c)setting off under section 84A of that Act;

   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.

   (2)A decision made under subsection (1) takes effect:

   (a)if no day is specified in the decision--on the day on which the decision is made; or

   (b)  if a day is specified in the decision--on the day so specified (whether that day is before, after or on the day on which the decision is made).

   (3)Nothing in this section prevents anything being done at any time to recover a debt that has been written off under this section.

   [Emphasis added]

8. There is no evidence before the Tribunal that the Applicants’ age pension debts are either irrecoverable; or that they have no capacity to repay the debts; or that their whereabouts are unknown; or that it would be ‘cost ineffective’ for the Commonwealth to seek to take action against the Applicants in an effort to recover these debts. For each of these reasons, debt ‘write-off’ pursuant to s.1236 of the Act does not become an available option.

   Power to ‘Waive’ the Debts

9. Section 1237A of the Act requires the Commonwealth to waive the right to recover a debt if it is attributable solely to administrative error by the Commonwealth and the person who has received the payment has received it in ‘good faith’.

10. The meaning of the word ‘solely’ was discussed in Gerhardt v Secretary, Department of Employment, Education and Training [1996] AATA 173, where the Tribunal had stated at [33]:

    There is nothing… which indicates that any meaning should be given to “solely” other than its ordinary meaning. Applying those ordinary meanings to the subsection mean that the Secretary must waive the right to recover the proportion of the debt that is attributable only to the Commonwealth’s administrative error. The Secretary’s duty to waive does not extend to those debts which are attributable to errors or other factors which are independent of the Commonwealth’s administrative error. It makes no difference that those other errors or factors are minor. If those other errors or factors follow as a result of the Commonwealth’s administrative error (i.e. they are incidental to the Commonwealth’s error), then it may be that the debt is attributable solely to the Commonwealth’s administrative error. Whether it is or is not attributable in that situation to the Commonwealth’s administrative error will be a question of fact.

11. The concept of sole administrative error was also considered by the Federal Court of Australia in Secretary, Department of Family and Community Services v Sekhon [2003] FCA 76 at [41]:

    However, it seems to me, the Tribunal failed to consider the significance of the inclusion, in section 1237A(1), of the word “solely”. For the subsection to have effect, the “proportion” of the debt – in this case, it is common ground, that would be the whole of it – 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.

12. In order to satisfy s.1237A(1), the Applicant must have received the payments giving rise to the debt in ‘good faith’. In Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484 the Federal Court at [41] stated:

    A person does not act in good faith where a person turns a blind eye to circumstances which raise doubt as to the entitlement of the person to receive and retain the payment or refuses to make reasonable enquiries we doubt exists.

13. In Panacci v Secretary, Department of Employment and Workplace Relations [1] [2008] AATA 30 the Tribunal at [25] stated:

    An absence of good faith does not amount to fraudulent conduct on the part of the recipient of a benefit but it does mean that the recipient acts without an honestly held belief of entitlement to receive and retain the payment. The state of mind of the recipient must be examined and the test of good faith is entirely subjective.

14. In this case there is no suggestion that the Applicants have ever acted other than in good faith. In this sense, at least, one of the two necessary limbs in s.1237A has been satisfied by the Applicants.

    Respondent’s Concession:

15. Before proceeding to consideration of the totality of the remainder of the debts arising over the debt period, the Respondent acknowledges that, on 4 December 2015, the Applicants had provided the Agency with pension payment information statements for the Yorkdene Pty Ltd Superannuation Fund. These information statements indicated that the Applicants held two income streams each; that the income streams were ‘account-based’ pensions and that their account balances as at 1 July 2015 were $85,501.04, $339,772.84, $86,510.42 and $206,367.97 respectively. Despite provision, these vital pieces of information were not then actioned by the Agency, and the Applicants’ records were not updated, with the new information.

16. The Respondent now accepts that the failure to process this information when it was received from the Applicants on 4 December 2015 amounts to an instance of ‘sole administrative error’; thereafter, the Applicants’ age pension payments were received by them in good faith. As such, the Respondent concedes that those portions of the Applicants’ age pension debts that relate to the periods between 4 December 2015 and 31 July 2016; and between 1 March 2018 and 16 January 2019 are now attributable to ‘sole administrative error’ by the Department, such that it becomes appropriate that at least this component of the two debts be waived under s.1237A.

17. What however remains in contention is the correct attribution for the remainder of the age pension debts, attributable to the following further periods:

    ·the debt arising between 23 November 2011 and 3 December 2015; and

    ·the debt arising between 1 August 2016 to and 28 February 2018.

    Age Pension Debt Arising Between 23 November 2011 and 3 December 2015:

18. The Respondent Secretary contends that that portion of the debts that accrued between

    
    

    23 November 2011 and 3 December 2015 cannot be categorised as attributable to ‘sole administrative error’.

19. At the very outset, when first applying for an age pension, the Applicants had lodged Details of Income Stream Product forms, dated 23 November 2011. In these forms, the Applicants had advised the Agency that their income streams were market-linked income streams that were eligible to retain asset test exempt status, and that, as at 1 July 2011 and

    
    

    31 October 2011, the account balances were $318,816.08 and $286,861.47, respectively. This however was incorrect information, that went on to become the ‘fountainhead’ for the overpayments that flowed subsequently. In actuality, the Applicants each held two allocated (otherwise also known as ‘account-based’) income streams, and these were not eligible to retain ‘asset-test exempt’ status; the account balances were twice the figures now submitted by the Applicants.

20. Mr Dwyer has told the Tribunal that the original figures written onto the forms by him had been amended (reduced by 50%) in the few moments immediately prior to their lodgement over the counter of the Robina Branch of Centrelink, after he had been advised to make that amendment by an employee of the Agency. To the extent that this was not the correct advice, it does amount to administrative error by the Agency; yet that is only part of the problem, as Mr Dwyer had – of his own volition – previously inserted on the form that he and his wife had market-linked income streams, and presumably in consequence of that indication, the Agency employee had then incorrectly told Mr Dwyer to go ahead and halve the amounts listed on the form.

21. Although Mr Dwyer’s thinking at the time regarding the concept of market-linked income streams was entirely explicable, and was not unreasonable, it was nonetheless erroneous, and was not something that arose in consequence of any advice given to Mr Dwyer by the Agency regarding the differences between market-linked and allocated income streams in retirement. Thus, the mistakes made that day were really instances of compounding combined errors[59] by each of Mr Dwyer and by the Agency employee who had attended to Mr Dwyer upon the lodgement of the forms; and cannot be categorised as ‘sole’ administrative error, by the Agency.[60]

    [59] Here, Secretary, Department of Family and Community Services v Sekhon [2003] FCA 76, [84].

    [60] This conclusion would obviously be different, had it been the case been that Mr Dwyer had been encouraged to select the market-linked option on the basis of advice received from the Agency counter staff.

22. On 21 January 2012 the Agency sent the Applicants information notices in which the Applicants were advised that they were recorded as having an allocated income stream with an asset value of $143,430.00 and the Agency had recorded their total combined asset value as $423,740.00. This notice also advised the Applicants that they were required to advise the Agency within 14 days if their combined assets – other than financial investments – were more than $421,520.00.[61] The asset values recorded by the Agency in the information notice as sent on that date were not correct, yet there is no evidence to indicate that the Applicants duly advised the Agency within 14 days of the notice dated

    
    

    21 January 2012 that either of the balances were incorrect. Subsequently, further information notices were sent to the Applicants on 23 January 2012, on 11 April 2012, and on 19 April 2012 specifying the value the Agency had recorded as either the Applicants’ total combined asset amounts, or as the value of their income streams, and again requesting that the Applicants contact the Agency within 14 days if any of the details listed in the information notices were incorrect.[62] The listed asset values were still incorrect, yet there is no evidence that the Applicants advised the Agency within 14 days of the receipt of the notices about that inaccuracy.

    [61] ST2, p.18; ST3, p.24.

    [62] ST4, p.28; ST5, p.38; ST7, p.48.

23. It is the case that these early notices from the Agency did refer to the Applicants as holding allocated income streams, notwithstanding the Applicants having initially told the Agency that they held market-linked income streams. It is further true that, on 26 February 2013, an employee within the Agency had acted unilaterally and had amended the Applicants’ records to reflect – incorrectly – their holding market-linked income streams. In the Tribunal’s assessment, this unilateral act by an employee within the Agency cannot be categorised as sole administrative error, because the impetus for the amendment was the original incorrect categorisation of the income streams in the information on the Detail of Income Stream Product, as had been provided by Mr Dwyer on the forms dated

    
    

    29 November 2011.

24. In addition, periodic information notices continued to be sent to the Applicants on multiple further occasions in 2013 and 2014, by which the Applicants were advised that the Agency had recorded their total combined asset amount by using a figure that remained incorrect. Yet, there is no evidence that the Applicants had contacted the Agency at any stage within 14 days after their receipt of any of the notices to advise the Agency of the error, or to query why the Agency was now specifying that they held market-linked income streams in circumstances in which previously received information notices had stated that the Applicants held allocated income streams. On that basis, that portion of the debt that accrued in the period between 23 November 2011 and 3 December 2015 cannot be said to be attributable to sole administrative error by the Agency. The fountainhead for the error remained the incorrect information that had been originally provided by the Applicants, in the Details of Income Stream Product forms dated 29 November 2011, which had been accepted at face-value by the Agency, and then used by the Agency as a basis to determine age pension payment rates. That original error was then only exacerbated, when Mr and Mrs Dwyer did not correct the erroneous information specified in the periodic information notices sent to them by the Agency, that revealed the Agency to have a mistaken understanding of the combined asset values controlled by them.

    Age Pension Debt Arising Between 1 August 2016 and 28 February 2018:

25. On 1 August 2016 and on 14 November 2016, the Agency sent information notices to the Applicants requiring them to provide information regarding the income streams. As had been the case with the information notices sent to the Applicants in August and

    
    

    November 2013, 2014, and 2015, these information notices had also been pre-filled by the Agency and advised the Applicants that the Agency regarded them as having market-linked income streams. Again, this is because of the original information provided by the Applicants on the forms dated 29 November 2011.

26. Further information notices requiring information from the Applicants were again sent in August and November 2017. These were similarly pre-filled and advised that the Agency understood the Applicants to hold market-linked income streams. Although the Applicants contacted the Agency on 15 November 2017 to provide 1 July 2017 account balances ($418,168.00 and $280,438.00), the Applicants did not advise the Agency at that time that these related to account-based rather than market-linked pensions.

27. On 3 December 2016 the Applicants were sent another information notice advising them that the Agency had recorded their total combined assets as being $542,505.50. Again, they were asked to tell the Agency within 14 days if the value of their assets had changed by $1,000.00 or more (CT54, p.398; MT45, p.375); yet a year prior to this notice the Applicants had provided pension payment information statements which reported that the total value of the Applicants’ income stream was $718,152.27 (CT46, p.375), and shortly after 3 December 2016 the Applicants advised the Agency that the value of the income streams was $651,878.00 (CT103, p.1266; MT89, p.1281).

28. Although the Tribunal is satisfied that the Applicants’ response to the 3 December 2016 information notice satisfactorily advised the agency that their combined assets were valued by more than $1,000.00 greater than the Agency recorded figure of $542,505.50, it still remains difficult to categorize the debt that accrued between 1 August 2016 and

    
    

    28 February 2018 as solely attributable to administrative error by the Agency. This is because there was still an element of contribution by the Applicants, by reason of the Applicants not telling the Agency that incorrect information regarding the type of income stream was still being used by the Agency when calculating their age pension entitlement.

    ‘Special Circumstances’:

29. Section 1237AAD of the Act allows for all or part of the debt to be waived in special circumstances and states in part as follows:

    The Secretary may waive the right to recover all or part of the 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 false representation; or

    (ii)failing or omitting to comply with a provision of this Act, the Administration Act or the 1947 Act; or

    (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 write off the debt or part of the debt.

30. The Tribunal notes that the Applicants have not specifically raised special circumstances, yet for completeness the Tribunal will consider the matter here.

31. The Applicants have provided a statement of financial circumstances dated 7 March 2020 which indicates that they have a combined monthly income of $3,300.00 and that indicates that their monthly expenses at that time were approximately $2,506.92. In addition, they have in excess of $15,000.00 in savings, which is in addition to their SMSF income streams. There is nothing about the Applicants’ financial circumstances that puts them into a ‘different category of case’, such that the debts should now be waived, because of ‘special’ circumstances. Though ‘special circumstances’ are not defined in the Act, these do have a recognised meaning. In Beadle v the Director-General of Social Security (1984) 6 ALD 1 the Tribunal had stated at [12]:

    ….An expression such as special circumstances is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon, or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be describe the special.

    [Emphasis added]

1. In Groth v Secretary, Department of Social Security (1995) FCA 1708, the Federal Court stated, at [12]:

   The phrase “special circumstances”, it has been said, although imprecise is sufficiently understood not to require judicial gloss…. It is sufficient to observe that it would require something to distinguish Mr Groth’s case from others, take it out of the usual ordinary case. That was, I consider, the only enquiry to be undertaken in this case. It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary…

2. In Angelakos v Secretary, Department of Employment and Workplace Relations

   
   

   [2007] FCA 25, the Federal Court stated, at [33]:

   … There is less risk of overstatement if the words “unusual” or ”uncommon” are emphasised. Those words indicate, correctly in my view, the fact that there must be something that distinguishes the case from the ordinary or usual case…

3. In Davy v Secretary, Department of Employment and Workplace Relations [2007] AATA 1114, the Tribunal stated at [80]:

   …“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… The system of administration of the Social Security Act does not visit any injustice for many if not all Social Security recipients but it did not lead to any injustice or unfairness on Mr Davy that is not visited, or potentially visited, upon all other recipients of social security payments under the Act. Therefore, I am not satisfied that there are special circumstances that make it desirable to waive the debt under section 1237AAD of the Act…

   DECISION

4. Mr and Mrs Dwyer have every right to feel jaded by the circumstances now confronting them. The Tribunal considers that the questions and options presented on the Details of Income Stream Product form that Mr Dwyer was required to complete on

   
   

   29 November 2011 were, in many respects, as inscrutable as the Sphinx.

5. In the Tribunal’s view, it was an abject instance of public administration for the Agency to even contemplate the promulgation of a pension form for completion by ordinary (oftentimes elderly) Australians that was so replete with technical options – such as those posed at question ten – that had specific detrimental consequences in the event of an incorrect selection, yet without any accompanying explanation of the meanings attributed by the Agency to the terms used in the categories that needed to be selected. In these circumstances it was foreseeable that Mr Dwyer would invoke an ordinary understanding of the term ‘market-linked’. Unfortunately, that ordinary understanding was incorrect in the specific context of social security legislation, such that Mr Dwyer proceeded on the basis of an incorrect assumption, yet without his seeking any clarification from the Agency as to the ramifications flowing from his choice.    

6. As unpalatable as these circumstances may now seem, and because of the legal authorities (excerpted above) that are binding on the Tribunal and which have the effect of affording the Tribunal very little decision discretion ‘left and right of arc’, this original, erroneous understanding by Mr Dwyer is unable to be categorised by the Tribunal as an instance of ‘sole administrative error’, by the Agency.  Had it been the case that Mr Dwyer been guided in that mistaken choice by an officer of the Agency, then the Tribunal would regard the problem as one flowing from sole administrative error, by the Agency.

7. Having expressed that view, the Tribunal can only hope that the Respondent Secretary will at least pause to consider the need for far greater simplicity in the labyrinthine forms that social welfare applicants are expected to navigate.

8. The Tribunal determines that:

   (a)the Applicants have age pension debts totalling $57,646.77 and $57,348.65 for the period 23 November 2011 to 16 January 2019; and

   (b)

   the Commonwealth’s right to recover the proportion of each debt accrued in the period between 4 December 2015 and 31 July 2016 and in the period between

   
   

   1 March 2018 and 16 January 2019 should be waived on the basis of sole administrative error, pursuant to section 1237A of the Social Security Act 1991 (Cth).

I certify that the preceding 117 (one-hundred and seventeen) paragraphs are a true copy of the reasons for the decision herein of Member Andrew McLean Williams

........................[SGD]........................

Associate

Dated: 12 July 2023

Date of hearing:	29 September 2022
Applicants:	Mr Conor Dwyer and Mrs Marlene Dwyer
Applicant’s representative:	Mr Alan Miller Byrne and Miller Accountants
Solicitors for the Respondent:	Ms Jasmine Forsyth Mills Oakley Lawyers