Elfwing and Secretary, Department of Family and Community Services

[2004] AATA 452

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 452

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No W2002/45

GENERAL ADMINISTRATIVE DIVISION		)
Re		ANNETTE ELFWING

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Mr M Allen, Member

Date7 May 2004

PlacePerth

Decision

The decision of the Social Security Appeals Tribunal made on 3 January 2002 is set aside and the matter is remitted to the respondent for reconsideration in accordance with the following directions:

(a)      the applicant’s entitlement to PP in the period from 28 October 1999 until 24 January 2001 should be recalculated on the basis of an entitlement using an estimate of income of $24,174;

(b) recovery of the amount calculated under (a) should be waived pursuant to s 1237AAD of the Social Security Act 1991;

(c)      the difference between the amount calculated under (a) and the amount of $8,602.37 is a debt due by the applicant to the Commonwealth and is to be recovered.

.............(sgd M Allen)......................

Member

CATCHWORDS

Social Security – parenting payment – whether a debt due to the Commonwealth – use of incorrect income estimate – whether administrative error – whether debt attributable solely to administrative error – whether special circumstances exist – whether debt should be written off – finding of special circumstances sufficient to justify waiver of part of the debt – decision under review set aside and matter remitted to respondent

Social Security Act 1991 ss 503, 1068B, 1236, 1237, 1237A, 1237AAD

Social Security Administration Act 1999 s 68

Secretary, Department of Social Security v Hales (1998) 51 ALD 695

Re Jonauskas and Secretary, Department of Family and Community Services (2001) AATA 72

Re Beadle and Director–General of Social Security (1984) 6 ALD 1

REASONS FOR DECISION

7 May 2004 Mr M Allen, Member           

1.      This is an application by Mrs Annette Elfwing for review of a decision made by the Social Security Appeals Tribunal (“SSAT”) on 3 January 2002.  By that decision the SSAT affirmed a decision made by a delegate of the respondent on 30 January 2001 to raise and recover a debt of $8,602.37 in respect of an overpayment of Parenting Payments (“PP”) between 28 October 1999 and 10 January 2001.

2.      At the hearing of the matter the applicant represented herself with the assistance of her husband, Mr Johnny Elfwing, and the respondent was represented by Mr Ward, a member of Centrelink’s Advocacy and Administrative Law Team.  The Tribunal received into evidence the documents filed pursuant to Section 37 of the Administrative Appeals Tribunal Act (T1 – T7) and Exhibits R1 and R2.

3.      The respondent’s Statement of Facts and Contentions filed prior to the hearing had attached to it a further 63 pages of material, which I will refer to as R3.1 – R.63.  At the conclusion of the hearing both parties were invited to make written submissions and both did so.  The applicant’s material will be referred to as Exhibit A1.

Background

4.      The applicant and Mr Elfwing and their two teenaged children are immigrants to this country from Scandinavia.  Mr Elfwing arrived in Australia in October 1996 and the applicant and the children arrived in January 1997.  It was apparent from their evidence at the hearing that they both now have a good command of the English language and both said at the hearing that, although their English was not as good in the period from 1999 until 2001, it was nevertheless adequate for day-to-day purposes. Mr Elfwing is a chef and from about late 1998 was self employed, running a small café.

5.      The following facts were not in dispute and I make the following findings of fact.

6.      Up until October 1999 the applicant was receiving PP.  In September 1999 she was interviewed by an officer of the respondent as part of a random check of PP recipients, in the course of which the applicant was asked to provide copies of Mr Elfwing’s tax return for the year to 30 June 1999.  This was provided during October 1999 and it is not in dispute between the parties that it revealed that Mr Elfwing had income in that year that was greater than the permitted maximum that allowed PP to be paid to the applicant.  There is some discrepancy in the documentary material as to whether Mr Elfwing’s income in that year was $35,057 (as was taken to be the case by the SSAT) or $33,095 as appears from a Notice of Amended Assessment issued by the Australian Taxation Office.  Whichever number is correct does not affect the proceedings.

7.      On the basis of Mr Elfwing’s income in the year to 30 June 1999, on 21 October 1999 a delegate of the respondent cancelled the applicant’s PP benefits.  The applicant was advised of that decision by letter dated 22 October 1999 (R3.10) which, somewhat confusingly, informed the applicant that “we cannot pay you as much Parenting Payment because your income has increased” and informed her that her normal payment from “pay day” on 18 November 1999 would be “Parenting Payment $66.20”.

8.      As a result of receiving notification of the cancellation, the applicant went into her Centrelink office and sought to have her PP reinstated on the basis that the family’s income in the year to 30 June 2000 would not be as great as it had been in the year to 30 June 1999.  It appears that the applicant and Mr Elfwing completed a Centrelink form entitled “Changes to your income and assets” (T3) which appears to have been signed by them on 29 October 1999 but there is a Centrelink date stamp of 28 October 1999.  At question 9 of that form the applicant ticked the box signifying that her or her partner’s income had reduced since 30 June 1999.  In Section 12 of the form the applicant provided an estimate of taxable income for the 1999/2000 financial year showing that she would have income from Centrelink of $671 and that Mr Elfwing would have income from self employment of $23,503, giving a total combined estimated taxable income of $24,174.

9.      At the same time, Mr Elfwing provided Centrelink with a hand written document entitled “Loss and Profit” relating to his café business for the months of July – September 1999 (T7 at page 49).  That document also bears a Centrelink date stamp of 28 October 1999.  The document sets out the monthly sales and expenses for the business, and shows that in the 3 month period sales exceeded expenses by $3,340.  It appears that Centrelink multiplied that figure by 4 to arrive at an estimate of expected income in the year to 30 June 2000 of $13,363 and recorded that figure in its computer systems for the purpose of calculating the rate of PP to be paid to the applicant.

10.     On 28 or 29 October 1999 a delegate decided to reinstate the applicant’s PP payments and she was advised by letter dated 29 October 1999 (R3.13) that her normal payment would be $286.70 per fortnight.  That letter also advised the applicant that she must notify Centrelink if any of a number of specified changes in circumstances occurred, two of which were if her personal income exceeded $60 per fortnight or her husband’s personal income exceeded $515.40 per fortnight.  It is apparent from this advice that Centrelink was proceeding on the assumption that Mr Elfwing’s income for the year to 30 June 2000 would be approximately $13,400.

11.     On 29 October 1999 Centrelink also wrote to the applicant confirming the Family Allowance (“FA”) and Family Tax Payment (“FTP”) that she was receiving (R3.33).  The letter thanked her for her advice that her and her husband’s estimated income for the 1999/2000 year would be $24,174 but advised that this estimate would not be used for the purposes of FA and FTP because it did not exceed by more than 10% their income in 1997/1998 (which had been $23,170).  The letter went on to advise that if the actual income of the applicant and her husband for the 1999/2000 year was more than 10% higher than the estimate that had been provided, then all or some of the FA and FTP payments might have to be repaid and that the applicant should tell Centrelink if the estimate of $24,174 was wrong for any reason.

12.     By letter dated 19 November 1999 (R3.16) the applicant was advised that her normal PP payments would be $287 per fortnight, based upon her partner’s annual income of $13,413.40 and she was asked to notify Centrelink if Mr Elfwing’s personal income went over $514.93 per fortnight.

13.     By letter dated 13 January 2000 (R3.19) the applicant was advised that her normal PP payment would be $285.50 per fortnight based on an assumed income for her husband of $13,471.78 and she was asked to advise Centrelink if her husband’s income went over $517.16 per fortnight.

14.     On 24 June 2000 the applicant was advised (R3.26) that her normal PP payments would be $311.10 based on her husband’s income of $13,450.32 and she was to notify Centrelink if her husband’s income went over $513 per fortnight.  A similar letter was written to her on 3 July 2000 (R3.29).

15.     On 7 January 2000 the applicant and her husband provided Centrelink with a further hand written profit and loss statement for the business for the months of October, November and December 1999.  A copy of that document is not contained in the T documents and has not otherwise been provided to the Tribunal by the respondent.  However, document R3.4 contains a notation in the respondent’s computer system that the statement was received on that day, that sales exceeded expenses for the 3 months by $3,355.25, and when multiplied by 4 resulted in an annual profit of $13,421.  Document R3.7 records that a similar statement was received by Centrelink on 5 April 2000 for the months of January, February and March 2000 and revealed that the total profit for the 3 month period was $746.38 which, when multiplied by 4, gave an annual profit of $2,985.52.  It appears, however, from the letters that were sent to the applicant during the first half of 2000 that the applicant’s PP payments continued to be calculated on the basis of an anticipated income of approximately $13,400.

16.     Document R3.1 contains a record of an entry made in the computer system by an officer of the Random Review Team in December 1999.  The entry noted the estimate that had been recorded as $13,363 and records contact with an officer known as “Tanya” at the Midland Office of Centrelink.  The entry records Tanya advising that she had notified the applicant of the risk of an overpayment if the estimate was incorrect and advice from Tanya that the applicant had been sent a letter regarding family payments, that a letter had not yet been sent regarding PP, but that a letter would be sent regarding PP.  The computer entry does not record when this contact with Tanya occurred.

17.     Document R3.2 contains another entry made in the computer system on 27 March 2000 by a Mr Wright of the Random Review Team and records that he had spoken to the applicant about the risk of using estimates of income, and that the applicant had informed him that she did not know if they had been warned or not.  The entry records that Mr Wright explained that estimated income had to be accurate and that a debt could result if it was not.  The entry records that the applicant understood this.  The entry also records that the Random Review Team would request the 1999/2000 tax returns in August 2000.

18.     Mr Elfwing’s tax return was prepared in early October 2000 and appears to have been signed by him on or about 6 October 2000 (T6).  The evidence as to when a copy of the tax return was provided to Centrelink was in dispute, and will be referred to below, but Centrelink did not act on the return until January 2001.  On 24 January 2001 Centrelink cancelled the applicant’s PP payments with effect from 10 January 2001 on the basis that Mr Elfwing’s income in the year to 30 June 2000 had been $31,537, which exceeded the allowable limits.  On the same day Centrelink raised a debt of $8,602.37 in respect of overpayments made between 28 October 1999 and 10 January 2001.

Evidence of Mr Elfwing

19.     Mr Elfwing said that he had attended every interview at Centrelink offices with his wife.  When he and his wife had gone to the Centrelink office in October 1999 after cancellation of the applicant’s PP payments he had not been aware that it was possible to provide Centrelink with an estimate of expected income and Centrelink officers had suggested this option to them.  They had a conversation with Centrelink officers about what information Centrelink would require and how they should go about estimating future income.  At the time he did not understand the difference between PP payments and FA or FTP payments (and still does not).  He had provided the income estimate of $24,174 contained in T3 assuming that was what would be used by Centrelink for their purposes and he had not understood exactly why Centrelink officers asked him for quarterly profit and loss statements for his business.  He had explained to the officers that he had prepared these hand written statements based on the full amount of invoices that he had paid and that some of the amounts included a component of personal expenditure that would not be determined until his accountant finalised the business accounts at the end of the financial year.  Consequently, he had told the Centrelink officers that the final income may well be different from that shown in the quarterly statements.

20.     Mr Elfwing said that he had spoken to Mr Wright by telephone on about 6 – 10 occasions following receipt of a letter dated 21 March 2000 (R3.23) from Mr Wright requesting the applicant to contact him.  Mr Wright had explained to him what his (i.e. Mr Wright’s) duties and responsibilities were and had told him that he and his wife should give documents directly to Mr Wright so that Mr Wright did not have to get them from Centrelink offices – which Mr Wright said often lost documents and it took him a long time to get copies from Centrelink.  He said that he must have discussed the issue of estimating income with Mr Wright but he could not now recall precisely what had been said.  He thought that Mr Wright probably did tell him how important it was for estimates to be correct.  He believed that he had told Mr Wright about the private expenses adjustments that would need to be made to the quarterly income statements.  He had discussed with Mr Wright and with various Centrelink officers that the business income fluctuated considerably from month to month because of the seasonal nature of the café and that was why it would be difficult to do reliable estimates.

21.     Mr Elfwing said that he was told by Centrelink officers that income estimates needed to be reliable but that he could change the estimates up or down if circumstances changed.  He knew that Centrelink wanted estimates of income and that if his income went over certain levels it would reduce or stop the payment of benefits.  He was not familiar with the Centrelink system or the types of benefits and rules of eligibility and he had taken his business books into Centrelink and understood that they had taken photocopies of them. 

22.     Mr Elfwing said that in October 1999 he had genuinely expected his income in the year to June 2000 to be lower than in the previous year.  His business was only relatively new and a number of other new restaurants had opened in the district and he expected harder competition.  Mr Elfwing said that he always gives his financial information to his accountant at the end of July each year and the accountant takes 6 – 8 weeks to prepare the tax returns.  His accountant always gives him spare copies to give to Centrelink and he always gives Centrelink a copy within a day or two of receiving the tax returns from the accountant.  He was sure that he had taken the tax returns to a Centrelink office in October 2000 and he could not explain why Centrelink had no record of receiving the tax return before January 2001. In his experience Centrelink did not routinely put a date stamp on documents at the counter.

23.     Mr Elfwing said that when completing the income estimates in T3 he and his wife had received assistance from Centrelink officers.  They had told him to include for his wife only Centrelink payments that were taxable and that is where the figure of $671 had come from.  The amount shown for his income of $23,503 was the amount required to take the total to $24,174.  That figure must have been suggested by Centrelink officers.

24.     Mr Elfwing said that in the period from October 1999 to January 2001 his wife had received many letters from Centrelink regarding the payment of various benefits.  He and his wife always read the letters carefully and if they required forms or information to be sent to Centrelink they attended to that immediately, or they sought an appointment with Centrelink to discuss the situation.  They experienced considerable confusion because they were often told to go to different offices (Midland, Warwick or Mirrabooka) without explanation and they usually had to deal with a new officer each time.  Mr Elfwing said that he could not recall ever seeing a letter from Centrelink that required notification if his income had exceeded approximately $550 per fortnight, nor did he recall ever seeing letters where his annual income was said to be $24,000 approximately or $13,000 approximately.  He did recall seeing letters that required notification if his income exceeded approximately $900 per fortnight.

The Applicant’s Evidence

25.     The applicant gave evidence that corroborated that given by her husband.  She said that she did recall letters from Centrelink regarding payments of benefits and she understood that the payments were based upon her husband’s income.  She could not recall if the letters showed annual or fortnightly income, and she did not know what amount Centrelink was using as her husband’s income for the calculation of benefit payments.

Consideration

26.     Section 503 of the Social Security Act 1999 (“the Act”) provides that the rate of a person’s PP is to be worked out using a Rate Calculator contained in s 1068B of the Act.  Section 1068B relevantly provides that the income of the recipient of PP and his or her partner must be taken into account in calculating the rate of payment.  At the relevant time a person qualified for the maximum rate of PP if the person’s income was no more than $60 per fortnight.  This maximum entitlement was reduced when the person’s own income exceeded $60 per fortnight and the person’s partner exceeded $504 per fortnight.  The income used for these calculations can be either a previous year’s taxable income or an estimate of the current year’s income but, in the latter case, subject to the risk that if the estimate proves to be incorrect an overpayment may occur that is recoverable by the Commonwealth.

27.     It is apparent from the above evidence that the rate of PP paid to the applicant was calculated using an estimate of approximately $13,400 and that this estimate turned out to be substantially less than the combined income of the applicant and Mr Elfwing in the relevant period.  Had the correct income been used to calculate the entitlement there would have been no PP payable to the applicant during the period and, consequently, the applicant was overpaid by an amount of $8,602.37.

28.     The Authorised Review Officer (ARO), when conducting an internal review of the decision to raise and recover the overpayment, relied on s 1224 of the Act, which relevantly provides that “an amount that was paid to a person because the recipient or another person made a false statement or a false representation or failed or omitted to comply with a provision of the Act constitutes a debt due to the Commonwealth”. The ARO considered that the various letters that had been written to the applicant requiring notification of changes of her husband’s income constituted notices pursuant to s 68 of the Social Security (Administration) Act 1999 (the Administration Act) and that the applicant had failed to respond to those requirements to notify. The SSAT did not refer specifically to any provision of the Act or the Administration Act that would have rendered the overpayment a debt due to the Commonwealth by the applicant, but proceeded on the assumption that there was a debt.

29.     In the circumstances of this case I prefer to rely on s 1223 of the Act which relevantly provides that “if a Social Security payment is made to a person who was not entitled for any reason to obtain that benefit then the amount of the payment is a debt due to the Commonwealth by the person.”  In the present case the applicant did receive the payment of a benefit to which she was not entitled because of the use of the wrong income estimates and, accordingly, the amount of the overpayment does constitute a debt due to the Commonwealth.

Should the Debt be Recovered?

30.     Having determined that a debt does exist I must then consider the question of whether or not the debt should be recovered. 

31.     In relation to the general question of recovery of overpayments, French J observed in Secretary, Department of Social Security v Hales (1998) 51 ALD 695 at 695,696 as follows:

“From time to time in the administration of social security benefits overpayments occur.  Sometimes these are the result of innocent non-compliance with the requirements of the law which can be affected by the stress associated with the circumstances that led to the receipt of benefits in the first place.  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 and the circumstances of the persons concerned.  However, the confining of a recovery regime by rigid rules, particularly in this area of the law, is likely to be productive of unfair or harsh outcomes in some of the great variety of fact situations that can arises.  There are provisions in the Act which recognise that reality.  They relate to the writing off and the waiver of debts otherwise due to the Commonwealth.” 

Discretionary Write off under Section 1236

32.     Section 1236 of the Act permits a debt to be written off (ie. its collection delayed) for a stated period or otherwise, but only in the circumstances referred to in s1236(1A), namely:

“1236(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) the debtor is not receiving a social security payment under this Act and it is not cost effective for the Commonwealth to take action to recover the debt.

33.     

In the present case the only factor referred to in s 1236(1A) that may be relevant is (b) concerning whether the applicant has capacity to repay the debt.  Section 1236(1C) provides that for the purposes of the paragraph (b):

 “if a debt is recoverable by means of deductions from a person’s Social Security payment, the person is taken to have a capacity tor repay the debt unless recovery by those means would cause the person severe financial hardship.” 

The applicant is in receipt of Social Security payments and deductions are being made to reduce the amount of the debt outstanding.

34.     In Exhibit A1 the applicant provided information about her family’s regular outgoings which, excluding amounts spent on food and fuel and other consumables, amounted to approximately $570 per fortnight.  The family’s income, which consists only of Social Security benefits because Mr Elfwing has been unable to attain suitable employment since closing his business in late 2002, is approximately $900 per fortnight before a deduction of $40 per fortnight repayments to Centrelink.  Mr Elfwing said that he had borrowed $2,500 from his parents overseas to pay some bills on the basis that he would repay it when he could afford to do so.  Apart from that the family has no debt.  I have no doubt that the family’s financial circumstances are precarious but I do not consider that it could be said that the continuing deductions from the benefits payable would cause the applicant severe hardship.  Accordingly, I do not consider that the debt should be written off pursuant to s 1236 of the Act.

Mandatory Waiver under Section 1237A

35. Section 1237(1) of the Act grants to the Secretary, and hence to this Tribunal by virtue of s43(1) of the AAT Act, the ability to waive the Commonwealth’s right to recover the whole or part of a debt due from a debtor only in the circumstances described in a number of specified sections of the Act. Two waiver sections are relevant in the current proceeding, namely s1237A and s1237AAD.

36.     Section 1237A(1) of the Act provides that (subject to the proviso in s1237A(1A), which is not relevant in the present case) 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.”

37.     In my opinion there was an administrative error on the part of Centrelink in the way it went about calculating the rate of the applicant’s PP payments.  I was informed at the hearing that document T3 is a document intended to be used only in relation to the administration of FA and FTP benefits and has no application in relation to PP payments.  I assume for present purposes that that is correct, but the fact remains that on the same day (28 October 1999) Centrelink officers took from the applicant and her husband document T3 showing an estimated income in the year to 30 June 2000 of $24,174 and yet at the same time, proceeded to enter into Centrelink’s computer system an estimate of approximately $13,400 for the calculation of PP benefits based upon “raw” business income and expenditure information that Mr Elfwing informed them was not a complete picture of the profitability of his business, because the expense component had not been adjusted to reflect personal expenditure.  Such adjustment would reduce the amount of business expenditure and thereby increase the profits of the business.

38.     In my opinion, Centrelink’s reliance on what was a very low estimate of income when it was in possession of an estimate that was substantially higher for the same income period was an administrative error.  I agree with the comment of the SSAT (at paragraph 15 of its decision) that the “best figure” for the combined income of the applicant and her husband should have been arrived at, using all the available evidence and the use of raw trading figures, despite a quite different and much more realistic figure being given, was not justifiable.  Had Centrelink used the higher estimate then the amount of PP paid to the applicant would have been substantially less, and the overpayment would have been less.

39.     In that sense, I conclude that the debt was attributable partly to the administrative error made by Centrelink.  However, as is clear from the words of s 1237A(1), for there to be a requirement for the debt to be waived it must be attributable solely to the administrative error.  In the present case it is clear that other errors were made.  Specifically, it is apparent that the applicant and her husband received a number of letters from Centrelink that informed the applicant of the amount of PP benefits that she was to be paid, the assumptions regarding income that Centrelink had made and requiring notification to Centrelink of any changes in her husband’s income over fortnightly amounts that equated to approximately $13,400 per annum. They did not notify Centrelink accordingly. 

40.     I accept the applicant’s evidence that they read correspondence from Centrelink carefully and that they were aware that the rate of payment was dependent upon levels of income.  That being so, the applicant should have appreciated that Centrelink’s assumptions regarding her husband’s income were not consistent with the estimate that she had provided to Centrelink in October 1999 in T3 and she should have made that known to Centrelink at the earliest possible time.  It is not necessary to determine whether the failure to do so was deliberate or inadvertent.  What is clear is that there was such a failure and that constituted an error that also contributed to the creation of the continuing overpayment and the creation of the debt.

41.     I find, therefore, that the debt that arose was not attributable solely to the administrative error made by Centrelink and accordingly the requirements for a mandatory waiver of the debt under s 1237A are not satisfied.

Discretionary Waiver under Section 1237AAD

42. Section 1237AAD relevantly provides that the whole or part of a debt may be waived in the exercise of a discretion to do so if the Secretary (or the Tribunal) 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 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.

Note:    Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth.

43. In relation to the requirements of s 1237AAD(a), neither the applicant nor Mr Elfwing were questioned at the hearing in a way that suggested that the respondent asserted that they had knowingly made a false statement or false representation or failed to comply with a requirement of the legislation. In the written submissions filed subsequently the respondent did not make any assertion regarding the requirements of this paragraph.

44.     On the evidence before me I am satisfied, on balance, that the failure of the applicant to notify Centrelink that their assumptions regarding her husband’s income were incorrect was not a knowing failure in the sense of having actual knowledge of an obligation and making a deliberate choice to not meet that obligation: see Jonauskas and Secretary, Department of Family and Community Services (2001) AATA 72 at [68] – [73] per Deputy President Forgie. I accept the evidence of the applicant and Mr Elfwing that they were quite confused about the various benefits and believed throughout that the estimate of $24,147 was being used by Centrelink for the purpose of calculating their benefits. In the circumstances I am satisfied that s 1237AAD(a) is satisfied.

45. In relation to the requirements of s 1237AAD(b) concerning special circumstances, what should be regarded as special circumstances is an issue that confronts this Tribunal regularly. Reference is frequently made, with approval, to the decision of the Tribunal in Re Beadle and Director–General of Social Security (1984) 6 ALD 1 at 3, that one should look for circumstances that are unusual, uncommon or exceptional. They need not be unique, but they must have a particular quality of unusualness that permits them to be described as special. In Boscolo v S,DSS (1999) 53 ALD 277 at 281, 282 French J described the core of the requirement as being that there be something unusual or different to take the matter out of the ordinary course, but without requiring that the case be extremely unusual, uncommon or exceptional.

46.     In the present case Mr Elfwing said that his period of unemployment had been a very stressful one for the family.  He has applied for hundreds of jobs without success, usually being told that he is “over qualified” for the positions applied for.  The family is struggling financially and during the first half of 2003 his family in Scandinavia had paid for him to return for several months to look after his father who was ill and who had died during 2003.  His immediate family in Australia have no health problems.

47.     The principal circumstance relied on by the applicant to justify waiver of debt is that it has substantially arisen because of what are perceived to be errors by Centrelink in the handling of her case.  The respondent has submitted that there is no evidence of circumstances that could be regarded as extraordinary even though it is conceded that the family’s financial circumstances are straitened.

48.     In my opinion there is something unusual or different that takes the applicant’s case out of the ordinary course.  The applicant and her husband were relatively new arrivals in Australia and new to the social security system.  They did not understand with any clarity the various benefits to which they may have been entitled and were significantly dependent upon assistance from Centrelink officers for information and guidance.  In my opinion it was entirely reasonable for the applicant to believe that Centrelink would use the estimate of $24,174 that was provided in October 1999 at the time when her PP payments were reinstated.  She should, of course, have appreciated subsequently that Centrelink’s assumptions were incorrect over the ensuring period of time but I accept her evidence and that of her husband that they continued to believe that the October estimate was being used.  The argument advanced by the respondent that the estimate provided in the form T3 was only for FA and FTP purposes may well be correct – but it is troubling that the same Centrelink officers can receive on the same day a form that provides one estimate of income for one purpose and yet proceed to put into the computer system a different and much lower estimate that will then be used to calculate another benefit payment.  That is in my opinion unusual, uncommon or exceptional, even if not extremely so.  It follows that I consider that there are special circumstances that make it desirable to waive all or part of the debt.  I return to the point of whether all or part of the debt should be waived at paragraph 50 below.

49. The third requirement for a waiver under s 1237AAD is that specified in paragraph (c) of that section, that it is more appropriate to waive than to write off all or part of the debt. I have concluded above that it would not be appropriate to write off the debt and it must, therefore, be more appropriate to waive it than to write it off: see Hales (supra) at p704.

50. As to whether the whole or only part of the debt should be waived, it appears to me that it would be appropriate if the applicant was liable to repay some of the debt. In all the circumstances I consider that a fair outcome would be if the amount of overpayment was recalculated on the basis that the applicant was entitled to receive whatever PP payments she would have received using an estimated combined income of $24,174. The difference between that amount and the amount that she actually received during the relevant period should be regarded as the debt due by her to the Commonwealth and which should be recovered from her. The balance of the debt should be waived pursuant to s 1237AAD.

51.     My decision is that the decision of the SSAT made on 3 January 2002 is set aside and the matter is remitted to the respondent for reconsideration in accordance with the following directions:

(a)the applicant’s entitlement to PP in the period from 28 October 1999 until 24 January 2001 should be recalculated on the basis of an entitlement using an estimate of income of $24,174;

(b)recovery of the amount calculated under (a) should be waived pursuant to s 1237AAD;

(c)the difference between the amount calculated under (a) and the amount of $8,602.37 is a debt due by the applicant to the Commonwealth and is to be recovered.

I certify that the 51 preceding paragraphs are a true copy of the reasons for the decision herein of Mr M Allen, Member

Signed:         ................(sgd V Wong)...............................
  Associate

Date/s of Hearing  19 December 2003
Date of Decision  7 May 2004

Counsel for the Applicant         In person assisted by Mr J Elfwing

Counsel for the Respondent     Mr C Ward
Solicitor for the Respondent     Service Recovery Team, Centrelink