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

Finnigan and Secretary, Department of Social Services (Social services second review) [2021] AATA 2887 (17 August 2021)
Division:GENERAL DIVISION
File Number: 2020/0090
Re:Paul Finnigan
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Brigadier AG Warner, AM LVO (Retd), Member
Date:17 August 2021
Place:Perth

The Reviewable Decision, being the decision of the Social Services & Child Support Division of the Tribunal dated 4 December 2019, is affirmed.
........................[Sgd]..............................................
Brigadier AG Warner, AM LVO (Retd), Member
CATCHWORDS
SOCIAL SECURITY – Newstart Allowance debt – whether Applicant was overpaid Newstart Allowance – whether debt due to Commonwealth – whether debt should be recovered – whether write off or waiver provisions available – sole administrative error – whether overpayment received in good faith – special circumstances – decision affirmed
LEGISLATION
Social Security Act 1991 (Cth) – ss 9, 11, 611(1), 643, 1068, 1223(1), 1236, 1237A, 1237AAD
Social Security (Administration) Act 1999 (Cth) – ss 66A, 68, 72

CASES
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Jazazievska v Secretary, Department of Family and Community Services (2000) 65 ALD 424
Re Drake v Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Re Gerhardt v Secretary Department of Employment, Education and Training [1996] AATA 173
Re McKnight and Secretary, Department of Social Security (1994) 83 SSR 1212
Secretary, Department of Employment, Education, Training and Youth Affairs v Prince (1997) 152 ALR 127
Secretary, Department of Family & Community Services v Sekhon (2003) 73 ALD 41
Secretary, Department of Social Services v Hales (1998) 51 ALD 695
SECONDARY MATERIALS
Social Security Guide – Guides to Social Policy Law, Version 1.284 – 6.7.3.30
REASONS FOR DECISION
Brigadier AG Warner, AM LVO (Retd), Member
17 August 2021
INTRODUCTION

Mr Finnigan seeks review of a decision of the Social Services & Child Support Division of the Administrative Appeals Tribunal (the AAT1) made on 4 December 2019 (Reviewable Decision). The Reviewable Decision affirmed a decision of an Authorised Review Officer (ARO) of the Department of Human Services, now Services Australia (Centrelink), dated 12 September 2019, which raised a Newstart allowance (NSA) debt of $13,173.64 for the period 25 October 2017 to 13 December 2018 (the Relevant Period) (ARO Decision).
Jobseeker Payment replaced NSA when it stopped in March 2020. NSA was an income support payment that was available to people who were at least 22 years old but under age for the purpose of receiving a pension, were looking for work (there were some exceptions to this condition), and were under the income and assets test limits.
The application was heard by the Tribunal on 19 July 2021. Mr Finnigan was self-represented, and the Respondent was represented by Mr Ashley Burgess of Sparke Helmore Lawyers. Mr Finnigan gave evidence at the hearing and was cross examined by Mr Burgess.
The Tribunal notes that during the progress of this matter in the Tribunal, Centrelink further scrutinised Mr Finnigan’s payment of NSA and advised him on 15 December 2020 that he had been overpaid $1,671.64 during the period 13 February 2017 to 24 October 2017 because his income from real estate was not taken into account (Exhibit A9). However, the Tribunal is not considering this debt in the present review.
BACKGROUND
Mr Finnigan was born in 1961 and was granted NSA commencing on 13 February 2017 (T4/62). Whilst in receipt of NSA, Mr Finnigan was notified repeatedly of his obligation to report any change of circumstances including in relation to his income and assets (see for example T4/72 and T4/81).
On 31 October 2017, Mr Finnigan contacted Centrelink using an online form on the website in which he stated (T20/174; Exhibit R1, Annexure A):
Hi, I currently receive NSA. As I am 56, and have insufficient cashflow for current needs, I have decided to take a Transition to Retirement (TTR) option from one of my super funds. I still am looking for work however. My TTR will give me a nett fortnightly payment of $559.45, which I believe will still leave me eligible for continuing NSA as well. Your advice appreciated. Thanks & regards Paul Finnigan
Email Address: [email redacted]
Telephone: [phone number redacted]
State: WA
On 8 November 2017, a Centrelink officer attempted to contact Mr Finnigan on the telephone number that Mr Finnigan had provided in his correspondence to Centrelink on 31 October 2017. The officer left a message on the message bank providing the telephone number for the relevant business line that Mr Finnigan can contact Centrelink on (T20/174).
The Agency has no record of any further contact by Centrelink or Mr Finnigan in relation to his online message (Exhibit R1, para 4.4).
On 30 November 2017, Mr Finnigan contacted Centrelink on the website and stated (T20/177):
Hi, I was previously advised that in submitting my fortnightly reports for the NSA payment, I had incorrectly being reporting my wife's nett income, not her gross. My report of today is also nett, not gross, because my wife is away, and I don't know her gross payment. Hopefully I can give correct data next time,
Email Address: [email redacted]
Telephone: [phone number redacted]
State: WA
On 6 December 2017, a Centrelink officer actioned the “email” by again ringing Mr Finnigan and leaving a message on the identified message bank (T20/177).
On 16 November 2018, as a result of information received from the income stream provider MyLifeMyPension (T20/180), Centrelink requested further information in relation to Mr Finnigan’s income stream product (T5/98). On 4 December 2018, Mr Finnigan provided the requested information regarding the income stream (T6/101).
On 17 July 2019, Centrelink decided to raise the NSA debt and issued Mr Finnigan with an account payable notice in relation to overpayment of NSA in the amount $13,173.64 during the Relevant Period due to increase in the value of his assets, in particular, his MyLifeMyMoney Superannuation Fund (T8/106).
On 22 July 2019, Mr Finnigan requested an ARO review of the decision to raise the NSA debt (T9/109), and on 12 September 2019, the ARO affirmed Centrelink’s decision that Mr Finnigan had a NSA debt of $13,173.64 for the Relevant Period (T12/112–118).
On 24 September 2019, Mr Finnigan requested a review of the ARO decision by AAT1 (T14/121–127). In the application for review Mr Finnigan stated that the debt was due to “sole administrative error”. He claimed that the ARO decision is wrong and states in part (T14/123):
The Dept claims they contacted me by phone on 8/11/17, (thus confirming my informing them on 31/10/17) in response to my advising them on my receiving the new Income Stream (Transition to Retirement) from my Super on 31/10/17. I have no record of ever receiving this call. Given that I was aware of the importance of keeping the Dept advised of any changes in my circumstances (hence my email of 31/10/17 advising of the TTR), I would have reacted to the Dept's call if I had been aware of it – I wasn't. I also find it strange that it appears the Dept made no reasonably practicable other attempts (eg there was no attempt to send me correspondence via my MyGov mailbox, following their claim of an unreturned phone voicemail) to further discuss the matter in the near term. Given I had been proactive in advising the Dept of my TTR income, I would have likewise been proactive in responding directly to their call / voicemail, had I been aware of it.
The Dept knew from 31/10/17 I was ineligible for the NSA payments, since I had advised them on that date of my TTR income stream – I believed I had discharged the obligations on me to keep the Dept informed of any changes in my circumstances. The onus was then on the Dept to make the correct decision based on my provided information and circumstances. They did not, nor did they make all reasonable practicable efforts to contact me to further discuss the matter in the near term, but continued to pay me the NSA.
On 4 December 2019, the AAT1 affirmed the ARO decision, finding that Mr Finnigan had a nil entitlement to NSA from 25 October 2017 and had a NSA debt of $13,173.64 for the Relevant Period. The AAT1 was not satisfied that there was any basis for non-recovery of the debt (T2/12–19).
16.On 7 January 2020, Mr Finnigan applied for further review by this Tribunal (T1/1–11). Mr Finnigan’s reasons for the application appear in paragraph [22] below, and state in part (T1/4):
In my opinion it is quite clear that my email of 31/10/17 provided all the relevant details that would have allowed the Dept to make an informed decision on my continuing eligibility (or not) for Newstart ...
The information I provided on 31/10/17 did not need any further elaboration or correspondence. It was wholly sufficient for the Dept to determine that my misinformed belief, in good faith, of my eligibility to Newstart was in error, and Newstart payments should have ceased at that point, rather than a debt of – $13k being allowed to accumulate for over a further year...
My contention is that my appeal is based on my fully satisfying all three conditional requirements of section 1237A….
17.The Respondent advises that Mr Finnigan had not repaid any of the debt as at 29 May 2020 (Exhibit R1, para 4.16).
ISSUE
The Tribunal must decide whether Mr Finnigan was paid NSA in excess of his entitlement during the Relevant Period, if so whether he incurred a recoverable debt to the Commonwealth, and if so whether the debt should be waived or written off.
LEGISLATIVE FRAMEWORK
The legislation applicable in this matter is contained in the Social Security Act 1991 (Cth) (the Act) and the Social Security (Administration) Act 1999 (Cth) (the Administration Act).
The relevant policy is contained in the Social Security Guide – Guides to Social Policy Law (the Guide). The Tribunal, as a decision maker, will generally apply the guidance contained in the Guide unless there are cogent reasons for departing from its application (Re Drake v Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634, 644–5).
EVIDENCE
The Tribunal had before it the following evidence:
·The “T Documents” (T1-T21, pp 1-218);
·Applicant’s Statement of Issues, received 27 February 2020 (Exhibit A1);
·Applicant’s MyGov Inbox screenshot, filed 27 March 2020 (Exhibit A2);
·Applicant’s NSA Claim review online screenshot, filed 27 March 2020 (Exhibit A3);
·Applicant’s Summary of Position re Centrelink Debt No [number redacted], filed 6 October 2020 (Exhibit A4);
·Applicant’s FOI email, dated 5 November 2020 (Exhibit A5);
·FOI decision letter, dated 4 November 2020 (Exhibit A6);
·Applicant’s documents released under FOI, filed 5 November 2020 (Exhibit A7);
·Applicant’s email, dated 15 December 2020 (Exhibit A8);
·Centrelink letter [number redacted], dated 15 December 2020 (Exhibit A9);
·Applicant’s email requesting original NSA application, dated 6 October 2020 (Exhibit A10);
·Secretary’s Statement of Facts & Contentions (SOFC), dated 29 May 2029 (Exhibit R1);
·Bundle of Centrelink file notes (8 pages), filed 16 July 2021 (Exhibit R2); and
·The oral evidence of Mr Finnigan.
CONSIDERATION
Mr Finnigan claims that the Reviewable Decision is wrong for the following reasons (T1/4):
I wish the Tribunal to review their decision of 4 Dec 2019, because key information I provided to both the Dept (on 31/10/17) and to the Tribunal in my pre-hearing submission was not fully taken into account in the Tribunal reaching their decision.
In the Tribunal's Decision of 4/12/19, point 18 d) acknowledges that I provided the Dept, (unprompted and of my own volition) with details of my new Income Stream on 31/10/17, and that in my email of that date, with scanned attachments, that (even with the new Income Stream) 'it was my understanding that I would still be eligible for Newstart', and that my email of that date 'asked for the Dept's advice' (on whether I was indeed still eligible for Newstart).
Although the Dept state they subsequently contacted me by phone on 8/11/17 to discuss (Tribunal Decision point 19, referring to page 79 of the FoI pack), I have no recollection of receiving that call – page 79 indicates it went to an old home phone number, disconnected a few years previously – the Dept already had my mobile number, unchanged in over 15 years). Additionally, the record at page 79 states that my contact to them on 31/10/17 was re a 'General Enquiry for Youth Allowance'. This is clearly an error in their records; I did not enquire about Youth Allowance, I was 56 yo at that point, and my son was only 11 yo! My enquiry was solely re my Newstart eligibility.
I respectfully submit that the Tribunal's Decision, point 21, is incorrect, regarding my advice to the Dept on 31/10/17 of the new Income Stream. Point 21 states "the Tribunal is unable to ascertain from the Dept's records if any documents accompanied the email of that date, as this is not apparent. The Dept say they did not receive relevant documents until 4 December 2018', (over 13 months after I had in fact provided the information).
The point 21 statement is directly contradicted by the ARO's letter of 12/9/19, (page 18 of the Fol pack – Findings of Fact, 1st bullet point, which notes 'You advised the Dept on 31 October 2017 that you had started to receive a Transition to Retirement payment of $559.45 per fortnight...'. This sum is exactly as noted in my email scans of 31/10/17, (page 12), and the Dept's own transcript of the 31/10/17 correspondence, (page 79 of the Fol pack) so it is clear the Dept were fully aware of the details of my new Income Stream on and from 31/10/17.
In my opinion it is quite clear that my email of 31/.10/17 provided all the relevant details that would have allowed the Dept to make an informed decision on my continuing eligibility (or not) for Newstart. I have provided that evidence (it is contained in the Dept's own records, pages 11 to 16 of my Fol request, the ARO's letter, and the page 79 transcript) and which the Tribunal had access to in the hearing of 4 Dec 2019).
On the basis of page 11 (of the Fol pack) and the ARO's letter of 12/9/19, my submission to the Dept on 31/10/17 had all the information required to determine that my claim for Newstart, (made in good faith, but as I now accept, being in error) for the Dept to have taken action accordingly to terminate any future Newstart payments. Had the Dept taken that action, based on my freely supplied information of the 31/10/17, the debt would not have occurred.
The information I provided on 31/10/17 did not need any further elaboration or correspondence. It was wholly sufficient for the Dept to determine that my misinformed belief, in good faith, of my eligibility to Newstart was in error, and Newstart payments should have ceased at that point, rather than a debt of~ $13k being allowed to accumulate for over a further year. It appears there are at least two errors in the Dept's record keeping, as evidenced by the comment re 'Youth Allowance', and (as noted in point 21 of the Tribunal Decision), 'the Dept saying they did not receive relevant documents until 4 Dec 2018', when in fact, as the ARO's letter of 12/9/19 acknowledges, they received all required information on 31/10/17.
My contention is that my appeal is based on my fully satisfying all three conditional requirements of section 1237A of the Act, viz;
a)    the debt accumulated due to the sole administrative error of the Dept, who were advised on 31/10/17 of the new Income Stream, but who appear to have lost the records of 31/10/17 until late 2018, when they approached me to provide further information, and;
b)    the debt was not raised within 6 weeks of the first payment (ie from about mid Dec 2017), and;
c)    having voluntarily and unprompted complied with a notification obligation (email of TTR details on 31/10/17), the debt was not raised within 6 weeks of the notification obligation period, (ie from about mid Dec 2017).
Based on all the foregoing, I respectfully request the Tribunal to reconsider their decision of 4/12/19.
The Respondent contends that:
a)Mr Finnigan was overpaid NSA of $13,173.64 and that the overpayment is a legally recoverable debt (Exhibit R1, para 4.17).
b)Recovery of the debt cannot be waived because it was not due to sole administrative error and the payments were not received in good faith (Exhibit R1, para 4.49).
c)Mr Finnigan’s circumstances are not such that it could be considered desirable to waive recovery of the debt under s 1237AAD of the Act (Exhibit R1, para 4.54), and the debt cannot be written off under s 1236 of the Act (Exhibit R1, para 4.57).
Was the Applicant overpaid NSA?
Section 643 of the Act provides that the rate of NSA is worked out using the benefit Rate Calculator B (Rate Calculator). This Calculator is contained at the end of s 1068 of the Act.
Subsection 611(1) of the Act provides that NSA is not payable if the value of a person's assets exceeds the assets value limit, which for a partnered homeowner was $380,500 at 1 September 2017, increasing to $387,500 during the Relevant Period.
Section 9 of the Act contains the following definitions:
asset-tested income stream (long term) means an income stream that is an asset-tested income stream (long term) under section 9D or an income stream that:
(a)is not an asset-test exempt income stream; and
(b)has, on its commencement day:
(i) a specified term of more than 5 years; or
(ii) if the person who has acquired the income stream has a life expectancy of 5 years or less—a specified term equal to or greater than the person's life expectancy. …
financial asset means:
(a)a financial investment; or
(b)a deprived asset.
financial investment means:
(a)available money; or
(b)deposit money; or
(c)a managed investment; or
(d)a listed security; or
(e)a loan that has not been repaid in full; or
(f)an unlisted public security; or
(g)gold, silver or platinum bullion; or
(h)an asset-tested income stream (short term); or
(i)an asset-tested income stream (long term) that is an account-based pension within the meaning of the Superannuation Industry (Supervision) Regulations 1994; or
(j)an asset-tested income stream (long term) that is an annuity (within the meaning of the Superannuation Industry (Supervision) Act 1993) provided under a contract that meets the requirements determined in an instrument under subsection (1EA);
but does not include a designated NDIS amount.
(Original emphasis; notes omitted.)
Section 11 of the Act defines “asset” to mean property or money (including property or money outside Australia). Property relevantly includes real estate, businesses, asset tested income stream products, and financial investments.
The Respondent contends (Exhibit R1, para 4.22), and Mr Finnigan does not dispute, that:
·The Applicant purchased an account based income stream product for the purchase price of $398,602.33 and commenced receiving an income stream payment from the product on 25 October 2017.
·The relevant asset value limit as of 25 October 2017 for a member of couple, homeowner was $380,500 (up to $387,500 by 20 September 2018).
·The Applicant exceeded the asset value limit and therefore had a nil entitlement to NSA from 25 October 2017.
·The Applicant received NSA payments until 13 December 2018, which totalled $13,173.64. (T19 and T21/201)

The Tribunal is satisfied that the overpayment was raised because Mr Finnigan’s MyLifeMyMoney superannuation asset was not taken into account from the time it came into effect on 25 October 2017 and that this asset alone means that Mr Finnigan exceeded the relevant asset value limit throughout the Relevant Period (T20/184).
In its decision dated 4 December 2019, the AAT1 noted: “At hearing Mr Finnigan said that he was not disputing that there had been an overpayment in the amounts as calculated; his submissions were directed at whether the debt is to be recovered…” (T2/14). Moreover, in Exhibit A1, Mr Finnigan states: “I am not disputing the overpayment, I am disputing that it was not caused solely by an error of the Dept”. Before this Tribunal, Mr Finnigan did not dispute the raising of the NSA debt or its amount.
Should the NSA debt or part of the debt be recovered in part or in full?
Subsection 1223(1) of the Act provides that if a social security payment is made and a person who obtains the benefit of the payment was not entitled for any reason to that benefit, the amount of the payment is a debt due to the Commonwealth by the person.
The Tribunal notes the Federal Court decision of Secretary, Department of Social Services v Hales (1998) 51 ALD 695 in which Justice French, as he then was, stated at 155:
…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 lead 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 arise. 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.
There are only two mechanisms available under the Act that allow for a properly raised debt of social security payment not to be recovered, being waiver and write off. Section 1237 of the Act gives the Secretary power to waive the Commonwealth's right to recover the debt. Section 1236 of the Act gives the Secretary power to write off the debt for a stated period or otherwise, if one or more prerequisite in s 1236(1A) has been met.
Should the debt be waived?
Sole Administrative Error
At the commencement of the hearing, Mr Finnigan outlined the “nub” of his case as follows (Transcript/5):
I was made redundant in October 2016. I subsequently applied for Newstart Allowance, but in that period of 2017 I found that wasn’t sufficient to meet my needs, so I decided to take a transition time payment from my super. I advised the department on 1 October 2017 of this and I asked for their advice, because I believed it still entitled me to NSA. About a year later the department said I had – I had only given them that information a year later, when in fact I had given it to them in 2017, and that’s really the nub of the case. I contend that the department’s sole error that I was paid that when I had in fact informed them in good faith of the additional income stream.
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 has received the payments in good faith.
The meaning of the word “solely” was discussed in the case of Re Gerhardt v Secretary, Department of Employment, Education and Training [1996] AATA 173 at [40], where the Tribunal stated:
There is nothing...which indicates that any meaning should be given to "solely" other than its ordinary meaning. Applying those ordinary meanings to the sub-section 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.
37.Sole administrative error was considered also by the Federal Court in Secretary, Department of Family & Community Services v Sekhon (2003) 73 ALD 41 at [41] which stated:
However, it seems to me, the Tribunal failed to consider the significance of the inclusion, in s 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.
The evidence is, and the Respondent acknowledges, that on 31 October 2017 Mr Finnigan contacted Centrelink and advised that he had “decided to take a Transition to Retirement (TTR) option from one of my [Applicant’s] super funds…My TTR will give me a nett fortnightly payment of $559.45…" (T20/174) which would provide him with an income. Mr Finnigan’s message did not provide any further details about the TTR option such as the name and asset value of the income stream product. Although, during his evidence, Mr Finnigan told the Tribunal that he was “pretty sure” that at that time he had provided a letter from MyLifeMyPension containing relevant details to Centrelink, there is no evidence of any attachments to the 31 October 2017 email, nor is there any other corroborating evidence that indicates the letter was provided to Centrelink as claimed by Mr Finnigan. The Tribunal further notes that such a letter was also not disclosed in the documents provided to Mr Finnigan consequent to his freedom of information request (Exhibits A5, A6 and A7).
Furthermore, Mr Finnigan provided a phone number so that he could be contacted in relation to the advice given and sought in his email of 31 October 2017 referred at paragraph [6] above. Mr Finnigan suggests that Centrelink may have attempted to respond by calling an out of date landline number. However, there is no evidence to support that Centrelink called a number other than the contact number that was provided by Mr Finnigan. Having regard to the Centrelink records which refer to an "identified message bank" (T20/174), the Tribunal does not accept Mr Finnigan’s suggestion.
When asked why he failed to contact Centrelink when his request for advice with respect to his TTR option was not answered, Mr Finnigan told the Tribunal (Transcript/17):
My sentiment would be, I was aware of the obligations to advise the department, that’s why I did in my email on 31/10, if the government didn’t get back to me well that’s probably – you know, I probably forgot about it and I assume no response was okay.
The ARO decision dated 12 September 2019 notes that Mr Finnigan commenced receiving income stream payments from 25 October 2017, and that the schedule he provided to Centrelink on 4 December 2018 confirmed that the purchase price of the account based pension was $398,602.33. The ARO further advised that an account based income stream is assessed under both the income and assets tests for NSA (T12/114; also see Centrelink’s file note at T20/184).
Mr Finnigan, during his evidence, told the Tribunal that in making his application for NSA he conducted his own research and checked the eligibility requirements “to a high level”, but “missed the assets test” (Transcript/19–20).
The AAT1 records Mr Finnigan’s evidence as follows (T2/18):
In addition to the family home he and his wife own three investment properties which are negatively geared. Those properties he estimates to have a combined market value of about $1.250 million subject to combined mortgages of about $970,000. They are rented out at a combined rental of about $1,180 per week.
In his claim for NSA dated 10 November 2016 Mr Finnigan stated that: “I own real estate apart from the home I live in”, but he did not include any further information about this real estate in the “Income and Assets” form completed on 11 November 2016 where he answered “No” to Q27 “Do you (and/or your partner) have any other assets (in or outside Australia) that you have not already advised us about on this form?” (Exhibit A7). The evidence is that at the time of his application for NSA and during the Relevant Period, Mr Finnigan had not provided Centrelink with details of the value of his rental income from investment properties (Transcript/14).
Further, Mr Finnigan in a “Statement of Financial Circumstances (Centrelink reviews)” form dated 26 November 2019 advised that his gross income per year from rental property was $30,300 (T17/134). However, during cross examination Mr Finnigan accepted that this figure understated the real rental income he was receiving and apologised for his error (Transcript/16).
Mr Finnigan stated in his application for review to the AAT1 that (T14/123):
I believed I had discharged the obligations on me to keep the Dept informed of any changes in my circumstances. The onus was then on the Dept to make the correct decision based on my provided information and circumstances.
Mr Finnigan told the Tribunal that having told Centrelink about his TTR and investment properties, he expected that this advice would have been a trigger for Centrelink “as the custodian of the taxpayer’s funds” to make further enquiries, but that did not occur (Transcript/20). In response the Respondent relevantly, and correctly in the Tribunal’s view, stated (Transcript/24):
There’s no duty on Centrelink to make inquiries about assets that the applicant may have, whilst there is a duty on the applicant to provide evidence of all assets held by him, whether or not he was under the impression that they weren’t to be included.
48.Section 66A of the Administration Act details the general requirement to inform Centrelink of a change of circumstances, and relevantly requires a person in receipt of a social security payment to notify Centrelink within 14 days of an event or change of circumstances which might affect the payment of a social security payment. Further, s 68 of the Administration Act requires that when a notice is given by Centrelink, a person is to advise changes in their circumstances, and s 72 of the Administration Act states that a person must provide such advice within 14 days.
Centrelink sent numerous notices to Mr Finnigan prior to and during the Relevant Period which advised him of the requirement to notify Centrelink within 14 days if his circumstances changed. In particular, the notices informed Mr Finnigan that he must advise Centrelink of any changes in his income and/or assets (T4 and T5).
The Respondent contends that while Mr Finnigan provided some information, he did not provide sufficient information to enable Centrelink to make the correct decision. Mr Finnigan failed to provide any details of the asset value of the superannuation fund. The Respondent also submits that Mr Finnigan “…was aware of his obligations, noting that he was sent information notices under section 68(2) of the Administration Act in relation to his NSA prior to the debt period (T4/72 and 82)” (Exhibit R1, para 4.43). The Tribunal notes that at the time of his contact with Centrelink on 31 October 2017 (T20/174) Mr Finnigan had not declared his investment properties or the rental income from them, and did not do so during the Relevant Period, despite the notices cited by the Respondent in the paragraph above specifically mentioning rental income (T4/73 and 82).
The Tribunal notes the Respondent’s submission that (Exhibit R1, para 4.45):
…the Applicant also failed to meet his obligation of reporting changes in his circumstances when the [sic] his gross pension payments altered during the debt period – he was receiving $15,715.70 p.a. as at 25 October 2017 (T1/6 – 7) and $15,070.45 p.a. as at 23 November 2018 (T6/101). These increases were notifiable events, which the Applicant did not comply with, and had he complied, then the debt may have been reduced.
Mr Finnigan’s NSA debt was raised because the value of the superannuation income stream product that he had purchased was not included in his assets, and that value took Mr Finnigan’s assets over the allowable limit. The evidence is that the value of Mr Finnigan’s investment properties and their rental income were also not disclosed to Centrelink. Having regard to Mr Finnigan’s evidence of his high-level checking of the NSA eligibility criteria, it is reasonable to conclude that Mr Finnigan would have been aware that his level of both income and assets would disentitle him to receipt of NSA. The Tribunal finds that Mr Finnigan’s debt is not attributable solely to administrative error by the Commonwealth, and therefore the debt cannot be waived pursuant to s 1237A of the Act.
Good Faith
The sole administrative error discretion is only available if the overpayment of NSA was received in good faith. As previously made clear in these reasons, this review is de novo, but the Tribunal notes that the AAT1 found that Mr Finnigan did not receive the payments in good faith (T2/18). The term “good faith” has been discussed by the Federal Court in a number of cases including the following:
a)Secretary Department of Employment Education Training and Youth Affairs v Prince (1997) 152 ALR 127:
Its concern is with the state of mind of a person concerning his or her receipt of the payment: if that person knows or has reason to know that he or she is not entitled to a payment received – ie is not entitled to use the moneys received as his or her own – that person does not receive the payment in good faith. Absent such knowledge or reason to know, the receipt would be in good faith.
b)Jazazievska v Secretary, Department of Family and Community Services (2000) 65 ALD 424 at [40]-[41]:
Prima facie, s 1237A(1) is concerned with actual personal receipt by the debtor of the payment or payments which give rise to the debt. The issue of good faith is, for the purpose of the section, to be determined when the debtor commences to exercise control over the payment by retaining it. It is at this time that the recipient must act with the requisite good faith. A lack of good faith does not mean that the recipient of the payment must be acting fraudulently when the payment is received and retained. It means that for whatever reason, the recipient acts without an honest belief that he or she was entitled to receive and retain the payment when he or she receives the payment and decides to exercise control over it by retaining it.
A person does not act in good faith where the 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 inquiries where doubt exists...
The Respondent also relevantly cites the case of Re McKnight and Secretary, Department of Social Security (1994) 83 SSR 1212, in which the Tribunal accepted that "naive" and "wilful[ly] blind" conduct contributing to a debt precluded the finding of administrative error waiver (Exhibit R1, para 4.47).
The Guide notes at 6.7.3.30 that:
If a recipient knows or had reason to know that they were not entitled to a payment they received, they cannot be said to have received the payment in good faith.
The decision of whether the recipient received the payment in good faith must be based on the recipient’s state of mind at relevant times, based on the best evidence available. It is essential to consider all circumstances of a case, including, but not limited to:
·     Information given to the recipient via letters and other literature, interviews, and phone contact. This may help to establish the recipient’s reasonable expectation about their payments.
·     Information provided by the recipient about their circumstances. This may help to establish their expectations about future payments and the impact of any new information they provide to Centrelink.
·     The recipient’s regular pattern of payment – what would they reasonably expect to receive on a regular basis? What would be an unexpected payment or amount?
·     The amount of the excess payment – it might be expected that a recipient would question a large amount.
·     The period of time over which the incorrect payments were made – a short period could be considered by the recipient to be administrative delay in actioning new information, while a longer period may not.
·     Whether the recipient had questioned the payment and received incorrect assurances that all was in order. In such cases, there may be grounds for attributing good faith, if the recipient has a well-grounded belief that they are entitled to some payment.
It is also important to consider whether the recipient has been 'wilfully blind' in relation to the overpayment.
Although the Tribunal has found that the NSA debt did not result from sole administrative error by the Commonwealth, the Tribunal also concludes that it is not satisfied that the overpayment was received in good faith. In this regard, the Tribunal agrees with the conclusion reached by the AAT1 (T2/18 at [25]). The Tribunal does not accept that having done his research and expressed the view in his email of 31 October 2017 his income stream would not disentitle him to receipt of NSA, Mr Finnigan just forgot about the issue when he, as he claims, received no response from Centrelink. Nor is it reasonable to accept that despite a significant increase in his income after commencement of the new income stream and his NSA remaining unchanged, these circumstances did not trigger a further enquiry from an informed recipient such as Mr Finnigan. Mr Finnigan presents with respect to these circumstances as either "naive" or "wilfully blind" and as such cannot be considered to have received the payments in good faith.
Given Mr Finnigan’s NSA debt was not due to sole administrative error and the payments were not received in good faith, recovery of the debt cannot be waived under s 1237A of the Act.
Special Circumstances
Section 1237AAD of the Act provides the Secretary with the discretion to waive all or part of a debt where it was not caused by an applicant knowingly making a false statement or failing to comply with the Act, and if there are “special circumstances (other than financial hardship alone) that make it desirable to waive”. In addition, pursuant to s 1237AAD(c) of the Act, the Tribunal needs to be satisfied that it is more appropriate to waive than to write off all or part of the debt.
The term “special circumstances” in s 1237AAD is not defined in the relevant legislation. However, the term has been considered extensively in case law and the following relevant cases are often cited:
a)Beadle and Director-General of Social Security (1984) 6 ALD 1 where the AAT stated at 3:
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 described as special.
b)Groth v Secretary, Department of Social Security (1995) 40 ALD 541 where the Federal Court stated:
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, to take it out of the usual or 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.
c)Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25 where 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…

Mr Finnigan told the AAT1 that (T2/18 at para [26]):
a)He is a qualified engineer. He was made redundant in 2016. Following a period of unemployment he secured a contract which has just ended in November 2019. He is in the process of seeking new employment.
b)He is married and has a 13 year old son who attends private education.
c)His wife works part time and earns about $37,000 per annum.
d)In addition to the family home he and his wife own three investment properties which are negatively geared. Those properties he estimates to have a combined market value of about $1.250 million subject to combined mortgages of about $970,000. They are rented out at combined rental of about $1,180 per week.
e)They have significant financial commitments.
f) If there is a debt he would either have to sell one of the properties or if he was able to secure employment he could negotiate a payment plan. There is currently no repayment arrangement in place.
This review is of course de novo, but Mr Finnigan did not provide any further evidence such that it would assist the Tribunal to reach a conclusion that his circumstances were special in the context of the present consideration.
The Respondent contends the overpayment was a result of Mr Finnigan receiving benefits to which he was not entitled to and failing to comply with the various written notices and report information in relation to his assets (Exhibit R1, para 4.52). The Respondent further contends that Mr Finnigan’s circumstances are not unusual or uncommon in which it could be considered desirable to waive recovery of the debts under s 1237AAD of the Act (Exhibit R1, para 4.54).
On the basis of the evidence before it the Tribunal is not satisfied that there are circumstances which distinguish this case from any other ordinary case and sees no injustice in requiring Mr Finnigan to repay the NSA debt of which he has had the benefit but not the entitlement. The Tribunal finds that Mr Finnigan’s NSA debt cannot be waived due to any special circumstances.
Should the NSA debt be written off?
Section 1236 of the Act provides for the possibility of writing off (delaying recovery) a debt for a period and states in part as follows:
(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.
65.Having regard to the material before it, including the details of Mr Finnigan’s assets and sources of income, the Tribunal is satisfied that none of the circumstances prescribed in s 1236(1A) of the Act arise to enable the Tribunal to exercise the power to write off Mr Finnigan’s NSA debt. The debt is recoverable at law. Mr Finnigan has the capacity to repay the debt, noting that he told the AAT1 that should there be a debt he would either sell one of his properties or negotiate a payment plan if he was able to secure employment (T2/18). Mr Finnigan’s location is known, and the Respondent submits that it is cost-effective for the Commonwealth to take a recovery action (Exhibit R1, para 4.56).
Therefore, the Tribunal finds that Mr Finnigan’s debt cannot be written off under s 1236 of the Act.
CONCLUSION
It is not in dispute and the Tribunal is satisfied that Mr Finnigan has been overpaid NSA. The Tribunal finds that the overpayments were not received in good faith, the debt was not due solely to administrative error and that special circumstances have not been established so as to make it desirable that the recovery of the debt be waived. Further, the Tribunal finds that the discretion to write off the debt for a period is not enlivened.
The Tribunal is satisfied that there is no injustice in requiring Mr Finnigan to repay the money, especially in circumstances where he is less disadvantaged than many recipients of Commonwealth benefits.
DECISION
It follows from all the above that the Tribunal affirms the Reviewable Decision, being the decision of the AAT1 on 4 December 2019, which affirmed the decision of the ARO on 12 September 2019 that Mr Finnigan had a NSA debt for the period 25 October 2017 to 13 December 2018.

I certify that the preceding 69 (sixty – nine) paragraphs are a true copy of the reasons for the decision herein of Brigadier AG Warner, AM LVO (Retd), Member

......................[Sgd].................................................
Associate
Dated: 17 August 2021

Date of hearing:

19 July 2021

Applicant:

Counsel for the Respondent:

Self-represented

Mr A Burgess, Sparke Helmore Lawyers

[2021] AATA 2887

17 August 2021

Key Legal Topics

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Administrative Law

Statutory Interpretation

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Appeal

Judicial Review

Procedural Fairness

Standing

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