Fletcher; Secretary, Department of Social Services and (Social services second review) - [2021] AATA 577

Fletcher; Secretary, Department of Social Services and (Social services second review) [2021] AATA 577 (19 March 2021)
Division:GENERAL DIVISION
File Number(s): 2019/8722; 2019/8723
Re:Secretary, Department of Social Services
APPLICANT

AndMichelle Fletcher
RESPONDENT

DECISION
Tribunal:Chris Puplick AM, Senior Member
Date:19 March 2021
Place:Sydney

The decision under review is set aside and in substitution:
1.the decision to cancel the Respondent’s disability support pension is affirmed;
2.the Respondent’s disability support pension debt for the period 25 January 2011 to 6 November 2018 is waived in its entirety pursuant to section 1237AAD of the Social Security Act 1991 (Cth); and
3.the Respondent’s family tax benefit debts for the 2015/2016, 2016/2017 and 2017/2018 years are waved in their entirety pursuant to section 101 of A New Tax System (Family Assistance) (Administration) Act 1999 (Cth)

..............................................................[sgd].............
Chris Puplick AM, Senior Member
CATCHWORDS
SOCIAL SECURITY – Disability Support Pension – Family Tax Benefit – where Disability Support Pension granted in error and later cancelled resulting in overpayment – whether debt should be recovered – writing off debt – waiver of debt arising from sole administrative error – whether there was sole administrative error – waiver of debt in special circumstances – whether special circumstances exist – reviewable decision is set aside and substituted
LEGISLATION
A New Tax System (Family Assistance) Act 1999 (Cth) ss 58, Schedule 1
A New Tax System (Family Assistance) (Administration) Act 1999 ss 95, 97, 101
Social Security Act 1991 (Cth) ss 94, 98, 117, 1064, 1236, 1237A, 1237AAD
Social Security (Administration) Act 1999 (Cth) ss 66A, 68, 123C, 123J, 123O
CASES
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Boscolo v Secretary, Department of Social Security (1999) 53 ALD 277
Brittain and Secretary, Department of Family and Community Services [2000] AATA 161
Brown and Department of Family and Community Services [1999] AATA 113
Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114
Dean and Department of Education, Science and Training [2005] AATA 586.
Drake v Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Dranichnikov v Centrelink [2003] FCAFC 133
Fisher and Secretary, Department of Education, Employment and Workplace Relations [2008] AATA 410
Groth v Secretary, Department of Social Services (1995) 40 ALD 541
Hogan and Secretary, Department of Employment, Education and Workplace Relations [2011] AATA 162
Jess v Scott (1986) 70 ALR 185
Love and Secretary, Department of Social Services [2016] AATA 8
Minister for Community Services and Health v Chee Keong Thoo (1988) 78 ALR 307
Nehma and Department of Family and Community Services [1999] AATA 219
Perkich and Secretary, Department of Social Security (1997) 49 ALD 137
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Gale & Department of Employment, Education & Training (1996) 42 ALD 477
Shi v Migration Agents Registration Authority [2008] HCA 31
Secretary, Department of Education, Employment and Workplace Relations and Brookes [2008] AATA 501
Secretary, Department of Employment and Workplace Relations and Taylor [2007] AATA 1377
Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Walsh [2008] AATA 75
Secretary, Department of Social Security v Hales (1998) 82 FCR 154
Secretary, Department of Social Security v Thompson (1994) 36 ALD 563
Secretary, Department of Social Services v Hodgson (1992) 27 ALD 309
Secretary, Department of Social Services and Waqar [2020] AATA 1493
Skinner and Secretary, Department of Social Services [2015] AATA 569
Stubbs v Secretary, Department of Family and Community Services [2003] AATA 729
Tabije and Secretary Department of Social Services [2014] AATA 778
Tomlin and Secretary, Department of Social Services [2017] AATA 1810
Ward and Secretary, Department of Family and Community Services [2000] AATA 212
SECONDARY MATERIALS
Guide to Social Security Law
REASONS FOR DECISION
Chris Puplick AM, Senior Member
19 March 2021
SUMMARY OF PROCEEDINGS

On 6 November 2018, the Department of Human Services (the Department), now known as Services Australia, wrote to Michelle Fletcher (the Respondent) to inform her that it had cancelled her Disability Support Pension (DSP) from 1 November 2010. On the same date, and as a consequence of the DSP cancellation, the Department notified the Respondent by letter that it had raised debts against her for the overpayment of Family Tax Benefit (FTB) for the 2016/2016, 2016/2017 and 2017/2018 financial years, in the amounts of $5,341.50, $4,504.10 and $4,505.43, respectively. On 30 May 2019, the Department wrote to the Respondent advising that it had raised a debt against her for overpayment of DSP in the period from 1 November 2010 to 6 November 2018. On 20 June 2019, after a process of internal review, the Department decided to waive the DSP debt for the period from 1 November 2010 to 24 January 2011 on the ground of sole administrative error, and that a debt of $127,108.51 for the period 25 January 2011 to 6 November 2018 (the debt period) was to be recovered. The ARO affirmed the decisions to cancel the Respondent’s DSP, and to recover the FTB debts in full.
On 21 November 2019, the Social Services and Child Support Division of this Tribunal (AAT1) set aside that decision and in substitution:
(i)The decision to cancel the Respondent’s DSP was affirmed.
(ii)The DSP debt should be waived in its entirety;
(iii)The FTB debt for the financial year 2015/2016 should be waived in its entirety; and
(iv)The FTB debts for the financial years 2016/2017 and 2017/2018 should be recovered.
It is against that decision of the AAT1 that the Secretary, Department of Social Services (the Applicant) appealed to this Tribunal on 23 December 2019. On 14 January 2020 action in relation to the enforcement of the AAT1 decisions was stayed pending the entirety of that decision being reviewed by this Tribunal.
This Tribunal heard the matter on 18 and 19 January 2021. The parties and witnesses appeared via the Microsoft Teams platform, or by telephone, in conformity with the COVID-19 Special Measures Practice Direction-adopted by this Tribunal.
THE DEBTS IN QUESTION
In the Applicant’s original Statement of Facts, Issues and Contentions (SFIC) dated 6 May 2020 it is stated (at 3.31) that on 30 May 2019 the Department raised a DSP debt against the Respondent in the sum of $130,385.87. Recalculations by the Authorised Review Officer reduced this to $127,108.51 (at 3.33) and this was the sum in which the Applicant seeks an order for recovery (at 9(b)).
The FTB debts in question as set out in the Applicant’s original SFIC were not accurate and were corrected subsequently by further submission.
The (revised) precise debts in question are as follows:
·FTB for financial year 2015/2016 = $2,888.52
·FTB for financial year 2016/2017 = $970.90
·FTB for financial year 2017/2018 = $947.67
On presently advised figures the total debt (DSP+FTB) amounts to $131,915.60.
The decision of the AAT1 (on the revised figures) would leave the Respondent with a debt totalling $1,918.57.
THE MATTERS FOR THIS TRIBUNAL
There are three principal decisions made by the Department which this Tribunal has to review. In doing so the Tribunal is bound by the provisions of the relevant legislation
·Social Security Act 1991 (Cth) (SS Act);
·Social Security (Administration) Act 1999 (Cth) (SS Administration Act);
·A New Tax System (Family Assistance) Act1999 (Cth) (FA Act);
·A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (FA Administration Act).
In addition the Tribunal is assisted by the guidance provided in the Guide to Social Security Law (the Guide) which sets out the principles to be applied to the interpretation of social security law and which, in the absence of any compelling reasons to the contrary, should be followed by the Tribunal.[1]
[1] Drake v Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 645.
The Tribunal must also make its decision on the basis of material currently before it, some of which may not have been available to the original decision-maker(s).[2]
[2] Shi v Migration Agents Registration Authority [2008] HCA 31.
The issues for the Tribunal to determine are:
(i)Whether the cancellation of the Respondent’s DSP was the correct decision by the Department,
(ii)What debts, incurred due to overpayment of DSP and/or FTB, are owed to the Commonwealth by the Respondent, and
(iii)If there are debts arising should all or part of them be waived or cancelled for any reason?
THE ORIGINS OF THE DEBTS
Disability Support Pension
On 1 November 2010 the Respondent applied for both DSP and FTB payments. In doing so she lodged information which included details of her own financial position and that of her husband Mr Peter Fletcher.
On 5 November 2010 Mr Fletcher was appointed as the Respondent’s “correspondent nominee”[3] which meant that correspondence from the Department to the Respondent was directed to him on her behalf. This appointment also means that actions taken or not taken by Mr Fletcher are to be regarded as having been taken or not taken by the Respondent herself.[4] Appointment as a correspondence nominee also imposes upon the nominee an absolute duty “at all times to act in the best interests of the principal”.[5]
[3] SS Administration Act section 123C.
[4] Ibid section 123J(1)(d).
[5] Ibid section 123O(1).
The Respondent’s DSP claim was rejected on 19 November 2010.
The Departmental file note, created on 19 November 2010, states clearly:
“Customer does not qualify for DSP as:
the impairment rating is less than 20 points
and therefore s 94 of the Social Security Act is not satisfied.[6]
[6] Tribunal documents at [147].
However, it appears that a letter was written to the Respondent on 19 November in the following terms:
to be eligible to receive Disability Support Pension you must be unable to work 15 or more hours a week for at least the next 2 years. A decision has been made that you are not eligible for Disability Support Pension because you ae able to work 15 or more hours a week within the next 2 years.[7]
[7] Tribunal documents at [989].
It is thus not entirely clear as to whether the original DSP application was declined on the basis of the Respondent not meeting the necessary assessment criteria on the impairment tables (SS Act section 94(1)(b)) or because of she did not satisfy the “continuing inability to work” criteria (section 94(1)(c)), or indeed, both.
Regardless of the reason(s), Mr Fletcher initiated a review of the refusal decision on behalf of the Respondent and provided further medical information which was considered by the ARO. On 18 January 2011 the ARO found that:
customer has a total impairment rating of 20 points under Table 6 (Chronic Psychotic Illness) and the customer has a continuing inability to work within the next two years.[8]
[8] Tribunal documents at [163].
As a result of these findings by the ARO, the rejection decision was set aside and the Respondent was granted DSP “subject to all other requirements being met from her date of claim [1 November 2010] as per s 109 of the SSAA.”[9]
[9] Idem.
On 25 January 2011 the Department (Centrelink) sent a letter addressed to the Respondent at her home address.[10] Mr Fletcher, as her correspondent nominee was the person required to respond to this letter.
[10] Tribunal documents at [993]. Also Respondent’s further Submission by email of 17 January 2021.
There are four critical aspects of this letter, which itself is a central document in these proceedings.
(i)The letter advises that the Respondent is to be paid a sum of $3007.45, being payment in arrears for the period November 2010 (the date of original claim lodgement) to 28 January 2011 (the next payment date);
(ii)The letter notes that as from 2 February 2011 the Respondent will be paid at the fortnightly rate of $539.80, being the ordinary DSP ($496.30) plus the Pension Supplement ($43.50);
(iii)The letter states (bolding in the original)
INFORMATION USED FOR CALCULATING YOUR REGULAR PAYMENT
Combined Annual Income ………………. $40.08
(iv)The letter continues on a second page (printed on a single sheet, hence on the back of the original latter) by stating the customer reference number and then has a heading (bolded in the original) WHAT YOU HAVE TO TELL US ABOUT. In two columns of details it is explained that an Australian resident DSP recipient must inform the Department (within 14 days) of a variety of matters including changes of income or assets. The letter states that income includes “your combined income” and that changes must be reported “on your reporting day”.[11] The advice makes it clear that “You can tell us by writing to us, by calling or you can come in and talk to us at any of our customer service centres.”
[11] There is nothing to indicate that the Respondent was ever advised that a “reporting day” had been established for her.
The letter also states that “This request is an information notice given under social security law.” This is a reference to section 68 of the SS Administration Act (s 68 Notice) which “requires” a recipient to do certain things by way of response to such Notices. The statement in the letter is, of itself, meaningless to a person unfamiliar with the details of social security law, but amounts to a formal notice requiring compliance.
Mr Peter Fletcher gave extensive evidence to the Tribunal. His evidence was clear, concise and supported by other material before the Tribunal. He was a witness of credibility and the Tribunal has no hesitation in accepting the veracity of his testimony.
In relation to the 25 January letter, his testimony was to the effect that:
·He remembers receiving the letter which he retained by filing it somewhere.
·He was pleased with the arrears payment of $3,007.45.
·He noted the fortnightly payment of $539.80 which he found disappointing as he expected the quantum to be larger.
·He may have noted the combined annual income figure of $40.80 and if he did, he would have assumed that this was some sort of “typo” (typographical) or other error.
·He does not remember turning over the page and reading the “fine details” which occurred on the reverse side.
The Applicant makes the point that Mr Fletcher “must have realised” that details of his income were important in the determination of the level of payment made to the Respondent when he signed documentation related to the original DSP application which attached details of his earnings by way of a number of recent payslips from his employer.[12]
[12] Tribunal documents at [62]-[107] especially at [103].
This was clearly an error on the part of the Department. The Respondent had provided full and correct information about the couple’s combined annual income and the Department had failed to take it into account when assessing the rate of DSP payment. There is no logical explanation for how the Department manufactured, out of thin air, a combined annual income calculation of $40.80.
On 28 February 2011 the Department again wrote to the Respondent advising her of the rate of her DSP payment and stating specifically “EARNINGS INFORMATION – You need to tell us your earnings before tax and other deductions such as salary sacrifice”.[13] In this letter, while the Respondent was advised in detail of her rate of payment there was no information included as to the “combined annual income” upon which such a rate determination had been made.
[13] Tribunal documents at [1001].
However, later in the same letter the Respondent was advised of details such as the records held by the Department of her savings account and the value of her share of household and personal effects and motor vehicles. There then follows a heading “OTHER DETAILS Family Tax Benefit estimate” under which it states:
Amount advised (combined taxable income) For financial year 1 July 2010 = $68,502 pa.[14]
[14] Tribunal documents at [1002].
That is then in turn followed by the narrative: “If you would like to update your estimate, please either visit or call of Family Assistance Office Self Service line.”
This appears to be a correct (at the time) recording of Mr Fletcher’s income and it would have not raised with him any sense of error or necessity to correct. Indeed, in his Statement, Mr Fletcher writes:
Centrelink letters arrived during this period that showed my reported income and this seemed normal to me.[15]
[15] Statement of Peter Fletcher (12 July 2020) at [56].
In her/her report the ARO writes:
There is no reference in these letters to Peter’s income from employment, however the reference to the income recorded for FTB is misleading and could lead the customer/partner into believing their income had been recorded correctly.[16]
[16] Tribunal documents at [129].
This was recognised and commented upon in the AAT1 decision.[17]
[17] Tribunal documents at [9] paragraph [26].
The Applicant invites the Tribunal to reason as follows: since the reference in the 28 February 2011 letter showed that the DSP rate of payment was exactly the same as was shown in the 25 January 2011 letter ($496.30 + $43.50) , the Respondent must have understood that this was based upon the (erroneous) income figure ($40.80) contained in that January letter, and should have been able to discern that (a) the reference to a “combined taxable income” related to FTB matters only and that (b) different methods were used by the Department to make DSP and FTB payment calculations.
This line of reasoning was not that adopted by the ARO in consideration of this specific issue. The ARO writes:
However there were several other letters issued at or around the same time which would have confused the issue, and I agree with the partner’s logic that they reasonable thought the department were aware of his employment and had considered this in the assessment of the Disability Support Pension claim.[18]
[18] Tribunal documents at [129].
The next significant event appears to have occurred on 26 May 2011 at which date Mr Fletcher apparently had an increase in his pay rate. The only evidence of this appears in the ARO notes where it records that Mr Fletcher contacted the Department on 25 October 2011 to update the FTB estimates as a result in “change in work hours/pay.”[19]
[19] Tribunal documents at [127] and [129].
This change in income was a “notifiable event” and Mr Fletcher was under an obligation to advise the Department within 14 days of its occurrence. He failed to do so until some 5 months later.
His failure to so placed back on him any responsibility for further erroneous payments being made.
However, despite Mr Fletcher’s (late) advice to the Department, no steps were taken to adjust the rate of payment of DSP to the Respondent. Despairingly, the ARO writes: “If only the person taking that call had looked at his earnings…”[20]
[20] Tribunal documents at [129-130].
The Department continued to send notices to the Respondent (20 June 2011, 28 September 2011, 3 January 2012 and 3 July 2013) which were generally in the same terms and with the same deficiencies as that of 28 February 2011.
The ARO writes:
Following an advance of Disability Support Pension there was a letter sent to the customer on 3/7/2013 stating the combined annual income was $33.40,[21] and this (believe it or not) was the last letter the customer received about their Disability Support Pension until 2018. They did continue to received letters about FBT but the estimates quoted were $103,000+ for the combined taxable incomes, so the customer/partner reasonably assumed the department had their income details.[22]
[21] Tribunal documents at [1104] (Citation not in original). Again there is no explanation of the origin of this erroneous figure.
[22] Tribunal documents at [130].

The ARO also notes:
2 JUL 2013 – Customer contacted call centre re advance payment….Again the question about the partner income has not been asked….[23]
[23] Tribunal documents at [127].
Throughout this period Mr Fletcher had changes in his income due to periodic pay rises and occasional additional income from overtime. He was obliged to notify the Department of these changes but there is no record that he did so and it must be taken that he did not. These were notifiable events.[24]
[24] The dates of these pay variations are set out in Tribunal documents at [128].
Mr Fletcher did provide estimates to the Department for the purposes of FTB calculations, but these do not translate into a reliable basis for the Department to calculate income support payments. Regardless of what information was provided to the Department by Mr Fletcher, or its utility, nothing which he did prompted any response or further action on the part of the Department.
In his evidence to the Tribunal Mr Fletcher, on a number of occasions remarked to the effect that he took “Centrelink to be Centrelink” and assumed that information provided to one part of Centrelink would be available to, and used, by other parts of the same agency. He also assumed that Centrelink would have access to, and make use of, his tax records which he submitted annually. In this respect the Tribunal notes that departmental correspondence to the Respondent often contained the following: “Data Matching Information provided by you to Centrelink may be used for data matching with other government agencies to detect and prevent incorrect payments and fraud.”[25]
[25] Tribunal documents at [1009].
On 17 October 2018 the Respondent was sent a routine letter asking her to update details of her and her partner’s earnings. A response was required by 29 October 2018.[26] On 30 October 2018 the Respondent’s DSP was suspended because she had failed to reply to this request for information.[27]
[26] Tribunal documents at [1266].
[27] Tribunal documents at [1272].
On 2 November 2018 Mr Fletcher phoned the Department to give them the information requested in the earlier correspondence[28] and this resulted in the immediate cancellation of the Respondent’s FTB “because your and/or your partner’s income is too high”.[29]
[28] Tribunal documents at [128].
[29] Tribunal documents at [1274].
The next developments are set out in the Applicant’s SFIC :
3.30 On 6 November 2018:
(a) the Department decided to raise the following FTB debts against Mrs Fletcher:
(i) a debt of $5,341.50 for the 2015/2016 financial year;
(ii) a debt of $4,504.10 for the 2016/2017 financial year;
(iii) a debt of $4,505.43 for the 2017/2018 financial year;
(b) the Department wrote to Mrs Fletcher at T6/110, T7/114 and T8/118 about the FTB debts;
(c) the Department decided to cancel Mrs Fletcher’s DSP from 4 June 2013 under section 80 of the SS Administration Act because Mr Fletcher’s updated income put her over the income test limit for DSP;[30]
(d) the Department wrote to Mrs Fletcher at T5/108 informing her of the decision to cancel her DSP, and the reason.
3.31 On 30 May 2019, the Department raised a DSP debt against Mrs Fletcher of $130,385.87 for the period from 1 November 2010 to 6 November 2018.
3.32 Mrs Fletcher applied for an internal review of the DSP cancellation decision, and the DSP and FTB debt decisions.
3.33 On 20 June 2019, an ARO waived the DSP debt for the period from 1 November 2010 to 24 January 2011 on the ground of sole administrative error. The amount waived was $3,277.36, leaving a balance of $127,108.51 ($130,385.87 - 3,277.36 = $127,108.51) for the period from 25 January 2011 to 6 November 2018 (debt period).
3.34 Otherwise, the ARO affirmed the original decisions, and decided that there were no special circumstances to waive the whole or any part of the remaining DSP debt, and the FTB debts…
[30] Tribunal documents at [176].
Both the DSP and FTB Parts A and B are subject to a means test.
It was correct to cancel the Respondent’s DSP as her income level was, at all times, above the threshold level provided under the legislation.[31] This matter is not contested by the Respondent.
[31] SS Act sections 98, 117, 1064.
However, this is not a case of a Respondent being paid the DSP, being initially means-test qualified for it and then subsequently breaching the threshold but continuing to be paid. In this instance the Respondent was never eligible for the DSP – the material provided in her initial application demonstrated that – and she should never have been paid.
She was paid as a result of an administrative error by the Department.
However, the ARO concluded that this period of error came to an end on 26 May 2011[32] when the first notifiable event (Mr Fletcher’s pay rise) occurred which required the Respondent to advise the Department of changes in circumstances – something which should have led to a recalculation and hence cancellation of DSP payments.
[32] Tribunal documents at [130].
The Applicant contends that the period of error came to conclusion on 25 January 2011 when the letter of that date should have alerted the Respondent to the erroneous basis of the calculation of the rate of DSP. It was this date that was used as the calculation for the period of the waiver of debt originally determined by the ARO on 20 June 2019.
Regardless of when (at this stage) the result of the administrative error was purged, it nevertheless remains the case that the Applicant was never eligible for DSP payments. This finding is not contested by the Respondent.[33]
[33] Respondent’s Statement of Facts, Issues and Contentions at [32].
Thus, in terms of the first question to be determined by this Tribunal (para 13 supra) – whether the decision to cancel the Respondent’s DSP on 6 November 2018 was the correct decision – the answer must be in the affirmative – Yes.
Family Tax Benefit
The error in the FTB calculations arise from the fact that they were made including DSP “income” as part of the adjusted taxable income which is used as the basis for payment calculations under section 58(1) and the Rate Calculator (Schedule 1) of the FA Act.
LEVELS OF DEBT
The second question which the Tribunal posed for itself (para 13 supra) was what level of debt was incurred by the Applicant once the DSP commenced (wrongful) payment.
There were certain initial discrepancies in calculations submitted in the Applicant’s SFIC and those in the ARO’s decision, leading to certain figures also being adopted by the AAT1.
However, this matter was clarified subsequently and both parties are agreed on the following figures:
·DSP for the period 1 November 2010 to 6 November 2018 = $130,385.87
·FTB for financial year 2015/2016 = $2,888.52
·FTB for financial year 2016/2017 = $970.90
·FTB for financial year 2017/2018 = $947.67
The orders sought by the Applicant are as follows:
·Recovery of the DSP debt from 25 January 2011 to 6 November 2018 in the sum of $127,108.51
·Recovery of the combined (revised) FTB debts of $4,807.09.[34]
[34] Applicant’s SFIC at 9(c) and email advice of 17 January 2021.
The total sum which would be owing were the AAT1 decision to be affirmed is $1,918.57.
The Respondent is seeking a total waiver of the entirety of the claimed debts, on the basis of sole administrative error, or in the alternative on the basis of special circumstances, and hence believes that they should not be required to make any repayment to the Commonwealth.
The Tribunal, for its purposes adopts the figures outlined in paragraph 62 and does not see any basis for their alteration or recalculation.
SHOULD ALL OR ANY PART OF THE DEBT BE WAIVED OR CANCELLED?
This is the third question before the Tribunal.
In the matter of Tomlin
A central part of the Respondent’s submission requires the Tribunal to give consideration to a decision of this Tribunal in the matter of Tomlin and Secretary, Department of Social Services[35] (Tomlin). Although each and every case must be determined on the basis of the unique and particular circumstances of each, there are many parallels between the facts and contentions in Tomlin and this matter.
[35] [2017] AATA 1810.
Ms Tomlin was receiving a social security payment (parenting payment), the rate of which varied as a result of the changes in the income of her partner who held irregular employment. She was also in receipt of FTB. Ms Tomlin was obliged by section 68 Notices to report any variations in family income to the Department. Ms Tomlin also received “Income Statements” from Centrelink which were in exactly the same form as the statements sent to the Respondent such as that of 28 February 2011.[36] As the Tribunal noted in Tomlin:
[15] …. The statement did not contain any information about her partner’s income and did not include a statement that Ms Tomlin was required to provide information to Centrelink about her partner’s income.
[36] Albeit they referred to Parenting Payments not DSP payments.
After further consideration of the particular facts in Tomlin the Tribunal came to the following conclusion:
[42] After a forensic assessment of the Centrelink documents dated 8 December 2011 and summarised in paragraph 16, the Tribunal is not satisfied that Ms Tomlin – or any other person of reasonable mind – would be able to understand there are different reporting requirements for the income of a person’s partner for family tax benefit and parenting payment (partnered). Notably, there is no information in these documents that provides incorrect information about the fortnightly or annual income of Ms Tomlin’s partner that she was obliged to correct. Rather, these documents included information both about amounts of parenting payments (partnered) Ms Tomlin had received and the amount of combined taxable income for the purposes of family tax benefit estimate advised on 1 July 2011. By conflating information about the payment types of parenting payments (partnered) and family tax benefit, the information provided in the documents from Centrelink dated 8 December 2011 was not only confusing, but misleading. This was solely the administrative responsibility and error of Centrelink. Further, Centrelink did not provide Ms Tomlin with any written correspondence or statements from 8 December 2011 to 21 September 2015 that could have informed her – or any other person of reasonable mind – that Centrelink did not have the correct information required about her partner’s income to pay the correct amount of parenting payment (partnered).
In the event, the Tribunal in Tomlin went on to find that
[43] Ms Tomlin erred in not responding to Centrelink’s letters …… Consequently, the Tribunal is satisfied that, from 24 May 2011 to 7 December 2011, the overpayment of parenting payment (partnered) to Ms Tomlin was not attributable to sole administrative error by Centrelink. Although Centrelink made administrative errors during this period, such as incorrectly recording the income for Ms Tomlin’s partner, there is no evidence Centrelink was solely responsible for administrative errors until 8 December 2011.
The Tribunal’s decision was to waive the debt for the period which it identified as resulting solely from administrative error on the part of Centrelink (8 December 2011 to 21 September 2015) but to affirm it for the remaining part of the debt period where Ms Tomlin had failed to respond to departmental correspondence and had thus contributed to the perpetuation of a remediable error.[37]
[37] At [58].
The Respondent’s submission to this Tribunal in relation to principles derived from Tomlin is:
The Respondent contends the same assessment should be made of the letter sent to Mrs Fletcher on 28 February 2011, as well as the subsequent letters sent to her on 20 June 2011, 28 September 2011, 3 January 2012 and 10 April 2012. That is, those letters also constitute administrative errors that are solely the responsibility of Centrelink.[38]
[38] Respondent’s SFIC at [81].
Unsurprisingly, the Applicant places a different gloss upon the Tribunal findings in Tomlin. In its SFIC it states (footnotes omitted) :
8.58 This ‘Income Statement’ dated 8 December 2011 received by Ms Tomlin was similar to the “Centrelink Statement” dated 28 January 2011 at T17/1000 received by Mrs Fletcher, with the important difference that:
(a) nowhere in the Income Statement dated 8 December 2011 was there any information about Mr Tomlin’s fortnightly income for the relevant reporting period (2 September 2011 to 8 December 2011);
(b) in the Centrelink Statement dated 28 January 2011 there was information about Mr Fletcher’s fortnightly income for the relevant period (7 December 2010 to 28 January 2011) in so far as:
(i) the earlier section 68 notice dated 25 January 2011 had stated that the rate of Mrs Fletcher’s DSP was $496.30 per fortnight based on a combined annual income of $40.08; and
(ii) the Centrelink Statement dated 28 January 2011 stated that the rate of Mrs Fletcher’s DSP was $496.30 per fortnight.
8.59 This is the differentiating feature between Tomlin’s case on the one hand, and Mrs Fletcher’s case on the other hand:
(a) in Tomlin’s case, a reasonable reader of the Income Statement dated 8 December 2011 could not understand the different income tests for PPP and FTB, and could not detect any incorrect information about Mr Tomlin’s income.
(b) in Mrs Fletcher’s case, a reasonable reader of the two documents dated 25 and 28 January 2011 could understand the different income tests for DSP and FTB, and could detect the incorrect information about Mr Fletcher’s income.
It should be noted that the reference to letters of 28 January 2011 are in error as the date, as corrected by the Applicant in opening submissions, was 28 February 2011. The Respondent placed some weight on this error, arguing that the conclusions of the Applicant rested, in part, on the proximity of the dates of 25 and 28 January[39] however the Tribunal is not persuaded of this contention and notes that 25 January and 28 February are in any event, sufficiently approximate as to make no difference.
[39] Respondent’s SFIC at [82]-[83].
The Applicant goes further and submitted at the hearing that even if there were a Tomlin “element” in these proceedings it ceased to have any effect as from 3 July 2013 which was the last day that any DSP-related correspondence was sent to the Respondent. That letter, of course, contained inaccurate information in that it stated the combined annual income to be $33.40, but also made clear to the Respondent that she was obliged to report changes in income within a 14 day period.
It is an interesting argument to advance: that liability arises when misleading correspondence ceases.
The Tribunal finds that the correspondence between the Department and the Respondent up until the final notification of 3 July 2013 was such that the letters should be characterised as being “Tomlin letters” and treated accordingly.
WRITE OFF OR WAIVER OF DEBTS
Under the Act there are two ways in which debts to the Commonwealth may be forgiven, and/or not recovered, either by write off or by waiver.
Section 1236 of the SS Act provides that a debt may be written off in the following circumstances:
1236 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.
Debts that are written off do not disappear. While they may not be recoverable at the time of write off, they nevertheless persist and may be recovered at a later date or upon a change of circumstances. In any event, the statutory requirements for the writing off of the debt in question in this matter are not met as there is no evidence, for example, that the Respondent has no capacity to repay it.
It is therefore inappropriate to consider writing off the DSP debt under section 1236 of the SS Act. As the provisions related to write off of debts under the FA Assistance Act (section 95) are in similar terms, the Tribunal makes the same finding in relation to FTB debts.
SOLE ADMINISTRATIVE ERROR
Debts may be waived if they have arisen from sole administrative error on the part of the Commonwealth.
The relevant section of the SS Act, section 1237A, provides:
Waiver of debt arising from error
Administrative error
(1) Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.
Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).
(1A) Subsection (1) only applies if:
(a) the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or
(b) if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;
whichever is the later.
A similar provision exists in section 97 of the FA Administration Act which provides:
Waiver of debt arising from error
(1) The Secretary must waive the right to recover the proportion (the administrative error proportion) of a debt that is attributable solely to an administrative error made by the Commonwealth if subsection (2) or (3) applies to that proportion of the debt.
(2) The Secretary must waive the administrative error proportion of a debt if:
(a) the debtor received in good faith the payment or payments that gave rise to the administrative error proportion of the debt; and
(b) the person would suffer severe financial hardship if it were not waived.
(3) The Secretary must waive the administrative error proportion of a debt if:
(a) the payment or payments were made in respect of the debtor’s eligibility for family assistance for a period or event (the eligibility period or event) that occurs in an income year; and
(b) the debt is raised after the end of:
(i) the debtor’s next income year after the one in which the eligibility period or event occurs; or
(ii) the period of 13 weeks starting on the day on which the payment that gave rise to the debt was made;
whichever ends last; and
(c) the debtor received in good faith the payment or payments that gave rise to the administrative error proportion of the debt.
(4) For the purposes of this section, the administrative error proportion of the debt may be 100% of the debt.
An important starting point is to note that the Applicant concedes that Mr Fletcher, at all times, acted in good faith, and this conclusion is also endorsed by this Tribunal.
I dealt at length with this issue in my recent decision in Secretary, Department of Social Services and Cassandra Clark (Clark)[40] where I made the following points:
(i)A social security payment recipient who receives a section 68 Notice requiring them to do such things as report changes in income has a clear statutory duty to do so and must take responsibility for any failure to do so;[41]
(ii)Such recipients who receive correspondence which advises of matters which are clearly erroneous are under an obligation to take steps to correct that error;
(iii)It is perfectly understandable that a reasonable person could assume that the provision of information, by them, to one part of a government department or agency, would be available to and be used by other sections of that same organisation.[42]
[40] [2021] AATA 10.
[41] Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Walsh [2008] AATA 75; Secretary, Department of Employment and Workplace Relations and Taylor [2007] AATA 1377. Secretary, Department of Education, Employment and Workplace Relations and Brookes [2008] AATA 501; Fisher and Secretary, Department of Education, Employment and Workplace Relations [2008] AATA 410; Tabije and Secretary Department of Social Services [2014] AATA 778 (and the authorities cited therein at [64]); Secretary, Department of Social Services and Waqar (Social services second review) [2020] AATA 1493.
[42] Clark at [32]-[36].

There is a parallel for this case in the matter of Secretary, Department of Family and Community Services and Jonauskas[43] (Jonauskas) where the Tribunal stated:
I am satisfied that the initial error in the calculation of Mr Jonauskas’ Age Pension was attributable solely to the administrative error of DSS … The debt continued to be solely attributable to the error of DSS until Mr Jonauskas came under an obligation to advise DSS that it was acting on incorrect information. He came under that obligation once he had received the letter of 22 July, 1997 containing the recipient notification notice requiring him to tell DSS if its statement of his income was correct and once the time for his responding had passed … After that time, the debt was due in part to its own initial error and in part to Mr Jonauskas’ omitting or failing to correct their error.[44]
[43] [2001] AATA 72.
[44] Jonauskas at [56].
In Clark, I continued:
[39] “Sole administrative error”, like so many critical terms in the Act, is not therein defined. However, judicial authority has established that it is to be given its ordinary meaning and that it is analogous to terms such as “exclusively", "only" or "to the exclusion of all else".[45] In Ward the Tribunal made it clear that if there are any other contributing errors they will vitiate a sole responsibility finding and “[i]t makes no difference that those other errors or factors are minor”.[46]
[40] The Parliament has legislated to give a fig leaf of coverage to shield the Department from the embarrassment of exposure to penalty for its administrative errors and the Tribunal is bound to give effect to that decision.
[41] The Respondent’s failure to respond to any of the correspondence during the debt period, but particularly the section 68 notice of 10 October 2013 so as to correct the manifest and obvious error(s) contained therein, thereby allowing them to continue, means that the Respondent effectively forfeits the right to have the debt waived on the ground of sole administrative error. She contributed, materially, to the error not being corrected.
[45] Gerhardt and Department Employment, Education and Training [1996] AATA 173, [36]; Ryde Municipal Council v Macquarie University (1978) 23 ALR 41, 50-51.
[46] Ward and Secretary, Department of Family and Community Services [2000] AATA 212, [47].
The Tribunal notes that, in this matter, there was more than one administrative error on the part of the Department. In the first instance the Department failed to take into account the information lodged with the initial DSP application which, if considered properly, would have prevented DSP being paid in the first instance. Secondly, the Department failed again, as the ARO notes make clear, to make enquiries of the Respondent in relation to income questions when they were in direct contact with the Department. Thirdly, there is a lacuna in terms of the lack of correspondence between the Department and the Respondent for the period July 2013 to November 2018.
Finally, the inability of the Department to provide clear statements of fact to the Respondent is evident even in the eligibility letter of 6 November 2018. This correctly records “combined regular fortnightly earnings” as $3,563.00 but then, inexplicably, goes on to record “combined annual income” at $23.38.[47] The Tribunal cannot understand how such errors occur, nor why it appears that the Department expects its clients to understand this either.
[47] Tribunal documents at [108].
Nevertheless, I must make the same finding that I made in Clark, namely that for at least the period from 3 July 2013 until 6 November 2018 the overpayment in question was not the result of sole administrative error by the Department as required by section 1237A. Mr Fletcher, as the Respondent’s correspondence nominee, had certain statutory duties to fulfil and he failed to do so. He contributed to the perpetuation of the error(s) and hence the Department does not bear the “sole” responsibility as required by the SS Act and the FF Administration Act.
SPECIAL CIRCUMSTANCES
The Tribunal endorses the reasoning set out in Clark[48] to explain the elements for consideration of waiver of debt on the basis of special circumstances, at [93] to [104] below.
[48] At [42] to [53]
Section 1237AAD of the Act also provides the circumstances in which the Tribunal may waive the right to recover all or part of a debt:
1237AAD Waiver in special circumstances
The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a) the debt did not result wholly or partly from the debtor or another person knowingly:
(i) making a false statement or a false representation; or
(ii) failing or omitting to comply with a provision of this Act, the Administration Act or the 1947 Act; and
(b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c) it is more appropriate to waive than to write off the debt or part of the debt.
The term “special circumstances” is undefined within the parameters of the Act itself.
Without going into extensive detail, it can be said that the authorities have identified a number of factors which go to establishing whether or not “special circumstances” exist. They must be:
(a)something more than ordinary or usual[49]
(b)markedly different from the usual run of cases – not necessarily unique but having a particular quality of unusualness[50]
(c)attuned to the individual circumstances of each case[51]
(d)not so rigidly applied as to risk harsh or unreasonable outcomes[52]
(e)supportive of the overall integrity of the social security system and recognising the public interest in ensuring that public moneys are recovered where they can and should be.[53]
[49] Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25; Jess v Scott (1986) 70 ALR 185, 193; Dranichnikov v Centrelink [2003] FCAFC 133, [66].
[50] Re Beadle and Director-General of Social Security (1984) 6 ALD 1, 3.
[51] Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114, [80].
[52] Secretary, Department of Social Security v Hales (1998) 82 FCR 154, 162.
[53] Skinner and Secretary, Department of Social Services (Social services second review) [2015] AATA 569, [48]; Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114, [80].
A starting point in discussion of waiver of debt in special circumstances is to determine whether the debt arose because the debtor “knowingly” made a false statement or representation, or “knowingly” failed or omitted to comply with the requirements of the SS Act or SS Administration Act.
In this case those obligations arise under sections 66A(2) and 68(2) of the Administration Act which require that changes in circumstances must be reported to the Department generally and also when notices are sent requiring specific information to be provided.
It is not necessary to discuss this issue in any detail as the Applicant states quite explicitly in their SFIC that the Respondent “did not knowingly fail or omit to comply with her obligations”.[54] The Tribunal endorses this conclusion.
[54] At [8.78], citing Love and Secretary, Department of Social Services (Social services second review) [2016] AATA 8, [57]..
Secondly, special circumstances cannot be established simply by arguing that there are matters of financial hardship which, alone, make the burden of repayment intolerable.[55]
[55] Skinner and Secretary, Department of Social Services (Social services second review) [2015] AATA 569, [43].
Thirdly, authority suggests that the correct approach to determining the presence of special circumstances gives the Tribunal “a broad discretion to respond to a wide variety of circumstances”.[56]
[56] Hogan and Secretary, Department of Employment, Education and Workplace Relations [2011] AATA 162, [82].
Classically, the Court in Secretary, Department of Social Security v Hales noted that the “concept of special circumstances is broad” and referred to “[a] constellation of factors” which may fall within the definition. It noted that:
The evident purpose of s 1237AAD is to enable a flexible response to the wide range of situations which could give rise to hardship or unfairness in the event of a rigid application of a requirement for recovery of debt.[57]
[57] Secretary, Department of Social Security v Hales (1998) 82 FCR 154, 162.
Parliament would not have included such a provision in the Act, going beyond recovery solely as a result of administrative error, if it did not intend to place this weapon in the armamentarium of a decision maker.
The Tribunal accepts the general description given in the Applicant’s SFIC at [8.87] (citations omitted):
The decision to apply special circumstances should take into account all of the person's circumstances, and would usually be based on a combination of factors. “Special” denotes something different from the usual or ordinary, but it is the circumstances that must be special, not the individual’s experience of them. Circumstances might be special though they apply to more than one person or to a class of persons, provided they are not of universal application.
The Guide includes the following points made to assist decision makers:
·The circumstances must be considered in their entirety.
·Each case must be considered on its own merits.
·The decision to apply special circumstances should take into account all of the person's circumstances and would usually be based on a combination of factors.
·Other factors to consider when determining if special circumstances exist would include, but are not limited to, the physical and emotional state of the person together with their decision-making capacity and financial circumstances, such as family and domestic violence.
·There is nothing in section 1237AAD that limits the broad discretion available to the Secretary under this section of the Act to determine that a person's circumstances are special circumstances that make it desirable to waive the debt.
·Special circumstances are not merely directed to the person's own circumstances. Rather they are directed to those that are 'special enough 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.
·The integrity of the social security system relies on recovery of overpayments. In general, if a person has had the use and advantage of the money paid incorrectly to them and has the means to repay it without excessive hardship (e.g. through withholdings), they should do so. In such a case, special circumstances waiver would be appropriate only if the person's particular circumstances made it unjust for the general rule to apply. Their circumstances would need to distinguish their situation from that of the many other people who do have to repay their debts.[58]
[58] Guide at 6.7.3.40.
Section 101 of the FA Administration Act (related to FTB payments) is in exactly the same terms.
There is a plethora of judicial guidance discussing the inter-relationship between special circumstances and administrative error. In Clark I relied heavily on the jurisprudence in a number of cases which turned upon the fact that the Department provided incorrect advice to applicants and applied that to Mrs Clark’s circumstances. In this instance I do not find that there was any incorrect advice provided by the Department other than the figures for combined annual income which I take as information and not advice.
I do however, note the following judicial and Tribunal guidance:
·In Re Gale where it was held that “the applicant and the department were not equal partners in their respective contribution” to the administrative errors which occurred, because “the department was primarily responsible for the administrative error”, the special circumstances provision of the Act could be enlivened to the benefit of a debtor.[59]
[59] Re Gale and Secretary, Department of Employment, Education and Training (1996) 42 ALD 477, [44].
·In Brown the Tribunal was concerned with a matter in which there was an overpayment made to the applicant which arose, in part, from the Department’s failure to follow up on information provided by the applicant. The Tribunal took the view that this was a material fact for it to consider in an assessment of special circumstances and noted that, at the same time, the applicant was under a great deal of personal stress and vulnerability which contributed to her failure to respond adequately to departmental correspondence. It held:
… While the Tribunal finds that Mrs Brown contributed to the overpayment in terms of her failure to respond to Departmental notices, the Tribunal also determines that the overpayment arose because of the failure of the Department of Social Security in particular to follow its own procedures and to investigate information provided to it not only by Mrs Brown, but also by the Department of Veterans' Affairs. Accordingly, the Tribunal considers that the Departmental administrative error in this case is a special circumstance which should be taken into account in terms of the manner in which the debt arose.
·In Nehma the Tribunal said:
The Tribunal is concerned at the significant Departmental error in this matter. Not only was the law not correctly applied, the Department's own policy, procedures and practices also were not applied.”[60]
·In Brittain the Tribunal considered an application for special circumstances waiver in which it agreed that: “The Tribunal considers that the departmental error in this case is significant such that whilst not being solely responsible for the debt, it should be considered to be a special circumstance.”[61]
·In Ward, Deputy President Forgie said:
This means that 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.”[62]
·In Groth, Keifel J (as Her Honour then was) stated:
The phrase "special circumstances", it has been said, although imprecise is sufficiently understood not to require judicial gloss: Beadle's case, and for present purposes 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. The enquiry I have referred to would involve considering what would be the effect, if the provision in question or the principle of liability it creates, is applied.”[63]
[60] Nehma and Department of Family and Community Services [1999] AATA 219, [76].
[61] Brittain and Secretary, Department of Family and Community Services [2000] AATA 161, [43].
[62] Ward v Secretay, Department of Family and Community Services [2000] AATA 212 at [47].
[63] Groth v Secretary, Department of Social Security [1995] FCA 1708 at [12].
The Respondent’s circumstances
As is often the case in such cases, it is necessary to discuss the intimate personal circumstances of the Applicant and members of her family and the Tribunal endeavours to do so in a way which balances respect for her privacy and sensitivity with the need to explain the basis of its decision-making.
The Tribunal heard expert evidence from Dr Michael Sanders (General Practitioner) and Dr Mark Walker (Psychiatrist) both of whom provided detailed written statements to the Tribunal and presented to give evidence in person. Their evidence was clear and concise and subject to significant interrogation by the Applicant’s legal representative.[64]
[64] The following description of the Respondent’s conditions and those of her husband are taken from report of Dr Paul Thiering (Psychiatrist) [Respondent Tender Bundle R7]; letters of Dr Michael Sanders (General Practitioner) and his report of 1 June 2020 [Respondent Tender Bundle at R 10,18, 20, 28 and 40]; Reports from Dr Mark Walker (Psychiatrist) [Respondent Tender Bundle R 13 and 39]; Report of Dr Alex Ganora (Pain Specialist) [Respondent Tender Bundle R21], Clinical notes Dr Graham Chaffey (General Practitioner with mental health qualifications) [Respondent Tender Bundle R5]. Both Dr Walker and Dr Sanders gave extensive oral evidence to the Tribunal.
The Applicant, Michelle Fletcher (who is now aged 50) suffers from a number of mental and physical ailments each of which have a significant impact on her life and ability to function and which, collectively, make her life difficult. In the first instance she has been diagnosed with Bipolar Affective Disorder. This diagnosis was first formally made in 2008 and reconfirmed in 2010. The Applicant has been hospitalised on a number of occasions for related treatment, on some occasions involving the use of electro-convulsive therapy (ECT). She suffers from endogenous depression which has been apparent since age 16. Both her parents suffered from depression. At times she has been “severely agoraphobic” to the extent that she found it impossible to leave her own bedroom. In 2015 she was further diagnosed with Attention Deficit Disorder (ADD). She suffers from a number of debilitating physical conditions including osteoarthritis of the knees and severe back pain (for which she has been prescribed Oxycontin and then morphine as a replacement) and may need knee replacements. She has had recent surgery to remove an ovarian cyst.
She is a qualified tattoo artist and was able to work as such up until December 2007 after which she secured some part-time work. From approximately early 2008 until the last few months she has been assessed as unfit for work by both her medical practitioners and by the ARO on review of the original DSP refusal. In the last few months, she has been able to secure access to employment in a tattoo parlour where she presents herself three days a week for a period of 8 hours per day. If customers arrive seeking her services she is able to provide them on a limited basis (one or two per day) given that her back condition makes working difficult. It was her evidence that she might be able to earn $200-$300 per week in the parlour where she has to pay 50% of her earnings to the proprietor.
While it is clear that the Respondent has achieved some progress and that her various conditions have shown encouraging signs of improvement since 2015 (her last ECT treatment), and she experiences some degree of pain relief from her medications, she remains generally suffering from low level pain. She continues to find ECT therapy to be useful and positive but both her treating psychiatrist (since 2010) and her General Practitioner (since 2004) regard her long-term prognosis as “poor” and her capacity to work no more than 12 hours per week at best.
The Respondent’s husband, Peter Fletcher, is an Information Systems Manager. He is 53 years of age and learned his skills, “on the job” staring with his employer as a Help Desk operator in 2005 and progressing from there. Since his wife became severely ill in 2008 he has been the principal carer both for her and for both his step-daughters (J and K) when they lived at home and for their son (S) who is now 15 years of age. Apart from maintaining his full-time work commitments, Peter is now primarily responsible for the management of the household , including matters such as looking after school arrangements, cooking, online food shopping, cleaning and washing. The impact of looking after his wife has led him to develop severe problems with his teeth (as a result of cracking is jaws by grinding them in his troubled sleep) and he has more recently been seeing a psychologist for therapy to help him cope with the stresses of his life.

Both parents are very proud of their son who has recently evidenced some need for psychological counselling and they are close to Mr Fletcher’s daughter K. However, they have had family difficulties with his daughter J who (on behalf of her boyfriend) initiated legal proceedings against the Respondent which has placed great emotional and financial stress on the family and recently resulted in the settlement of this dispute by payment of $15,000 to J’s boyfriend[65] although leaving unpaid bills with their solicitors in the process. The sum of $15,000 was borrowed from the Respondent’s father[66] and Mr Fletcher expressed his deep sense of embarrassment and shame at having to do this. Arrangements are in place for repayment of this loan over time.
[65] Respondent’s Tender Bundle at R50 and R51.
[66] Respondent’s Tender Bundle at R49, R50, R51.
The family have a mortgage over their home, limited savings (in the order of $1,300) and two cars, although it was in evidence that it was likely that they could not afford to maintain both and would have to sell the Respondent’s vehicle. The mortgage is subject to a scheme of arrangement with the lender recognising their financial hardship.[67]
[67] Respondent’s SFIC at [109]. As at May 2020 the mortgage stood at $271,705 with arrears for $$2,931 - Respondent’s SFIC at [110].
Peter earns in the vicinity of $99,000 per annum gross[68] (supplemented on occasions by overtime) but is fearful of losing his job at the university as it undergoes a major restructure and downsizing resulting from the significant loss of students (especially from overseas) during the COVID-19 pandemic. He fears that his lack of formal qualifications and his age would count against him in terms of future employment prospects.
[68] Mr Fletcher produced supporting documentation by way of Australian Tax Office records at the hearing to confirm this figure.
The couple’s Weekly Budget statement (12 July 2020) shows income and expenditure such that they are left with a negative balance of -$82.18 each week. The Applicant notes that this position has improved to the extent that the Respondent has now some income from the tattoo parlour. On the other hand, the Budget does not include any details of repayments of the loan from the Respondent’s father, nor does it take into account what the Respondent claims are outstanding legal fees of $20,042[69] and quotes from their dentist indicating necessary dental work for both parties costing some $13,340.[70]
[69] Respondent’s Tender Bundle at R49.
[70] Respondent’s Tender Bundle R46/R47.
The Tribunal is required to make any determinations based on the material before it at the time of decision-making. Historical information is useful/relevant only to the extent it sheds light or understanding upon current circumstances and prospective matters should be taken into account only to the extent of their certitude or formal commitment.
The Respondent’s position on special circumstances
The Respondent advances the case for special circumstances on the basis that:[71]
(i)There was administrative error by Centrelink through the entire debt period which in turn led to an accumulation of debt over a period of 8 years while its errors persisted,
(ii)The circumstances of both the Respondent and her husband’s health are compromised and precarious and were contributing factors to their entirely innocent overlooking of their reporting obligations when responding to confusing and unclear correspondence from the Department, and
(iii)The financial circumstances of the family, both currently and prospectively, are dire and should be taken into account.
[71] Respondent’s SFIC at [96].
The Applicant’s position on special circumstances
The Applicant advances the propositions that the medical conditions from which the Respondent suffers are not, in and of themselves, so unique or out of the ordinary, as to constitute special circumstances. Indeed, there is an underlying rational that for people to qualify for the DSP they must suffer some degree of unwellness so as to qualify for the necessary points under the Disability Tables. Payments such as DSP or old Invalid Pension are predicated upon unwellness and disability.
In relation to the Respondent’s financial position, a level of “severe financial hardship” is required to be met,[72] given that “financial hardship alone” is excluded from consideration (s 1237AAD(b) SS Act, s 101(b) FA Administration Act). That level of financial hardship is said to relate to a “level of financial suffering of a severe or extreme nature.”[73]
[72] Skinner v Secretary, Department of Social Services [2015] AATA 569 at [29].
[73] Stubbs v Secretary, Department of Family and Community Services [2003] AATA 729 at [20].
There is also a need, according to the Applicant, for the public interest to be taken into account and for the integrity of the social services system to be maintained on the basis that persons who are not entitled to social security payments should be prevented from accessing them.[74]
[74] Skinner v Secretary, Department of Social Services [2015] AATA 569 at [48]-[49].
The Applicant acknowledges
The decision to apply special circumstances should take into account all of the person's circumstances, and would usually be based on a combination of factors. “Special” denotes something different from the usual or ordinary, but it is the circumstances that must be special, not the individual’s experience of them. Circumstances might be special though they apply to more than one person or to a class of persons, provided they are not of universal application.[75]
[75] Applicant’s SFIC at [8.87] citations omitted.
Considerations
The Tribunal agrees with the three propositions as outlined by the Respondent in relation to special circumstances. First, there was continuing administrative error by the Department throughout the period and the Respondent and her husband suffer from ill health and financial stress, no doubt aggravated by this error.
It also agrees with the Applicant that all circumstances must be taken into account and that it is to be expected that almost all recipients of the DSP will be likely to suffer from a degree of personal ill health and financial hardship. It also strongly supports the proposition that there is an important public interest in safeguarding the integrity of the social security system itself and the public revenues attached thereto.
It parts company somewhat on the question of the extent to which financial hardship must be “severe”. In the authority for that proposition quoted by the Applicant (Skinner) the Tribunal was discussing the meaning of the term “severe financial hardship” as it appears in section 1236(1C) of the SS Act which relates to debt write offs and the assessment of the capacity of the debtor to repay the debt. The term is not used in the waiver provisions of section 1237AAD. That section should be read as instructing decision-makers that financial hardship alone is not sufficient to establish special circumstances but equally that financial hardship may be taken into account as part of the “constellation” (Hales) of factors within the “broad discretion” (Hogan) for consideration.
In its own submission to the Tribunal[76] the Applicant asked it to take judicial note of the recent finding of the Australian Bureau of Statistics that the average household income for 2020 is $116,584 before tax which, the Tribunal understands is above the current gross salary of the household of some $99,000 per annum. That figure itself is generally consistent with the income estimates for the financial years 2015/16; 2016/17 and 2017/18 which were recorded by the ARO.[77]
[76] Applicant’s Submission in email dated 17 January 2021.
[77] Tribunal documents at [131].
The Tribunal is aware that the discretion in this area is “not lightly to be enlivened”,[78] that at its core is the element of something being “out of the ordinary course”[79], but notes that a finding of special circumstances does not require factors which are “extremely unusual, uncommon or exceptional”.[80]
[78] Boscolo v Secretary, Department of Social Security (1999) 53 ALD 277, 281.
[79] Minister for Community Services and Health v Chee Keong Thoo (1988) 78 ALR 307, 324.
[80] Secretary, Department of Social Services v Hodgson (1992) 27 ALD 309, 318.
In seeking to determine whether the circumstances of this Respondent establish special circumstances, the Tribunal has taken the following into consideration
(i)Keifel J’s comment in Groth[81] that 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. The administrative errors on the part of the Department from an initial failure to act on advice provided through to repeated incorrect statements in notifications to the Respondent passes muster with the Tribunal as “unintended” and probably also “unfair” and “unjust” in its impact on the Respondent.
(ii)The severity of the psychological conditions suffered by the Respondent which, although showing signs of improvement, still evoke a negative prognosis from her medical practitioners all of whom attest that placing her under further stress (such as the burden of major debt) would so impact on her endogenous mental health conditions as to cause and end to such progress or trigger a serious relapse. There is ample judicial authority supporting the proposition that current and future health challenges to Respondents are legitimately considered as being within the constellation of factors for consideration as special circumstances.[82]
(iii)The additional burdens faced by the Respondent and her husband in terms of coping with (and affording the care for) their physical health conditions, primarily those associated with dental care taken together with the financial hardships, both present and reasonably prospective, which they face. The Tribunal also notes the extent to which Mr Fletcher is labouring under the burden of fears (which of course may not necessarily be well founded but which are no less real for all that) about his continued employment and the management of arrears of mortgage payments to the bank.
(iv)The extent to which the errors made by the Department have themselves, been contributory factors in creating unfair and unintended consequences for the Respondent and her husband. What is of course “special”, although not necessarily “unique”, is that there has been a degree of administrative error by the Department and the Tribunal accepts that this has contributed to placing the Respondent under additional strain and further impacting on her mental health because she has had to deal with the consequences of such an error.
[81] Groth v Secretary, Department of Social Security [1995] FCA 1708 at [12].
[82] Secretary, Department of Social Securityv Thompson (1994) 36 ALD 563, 568. Dean and Department of Education, Science and Training [2005] AATA 586, [60]. Perkich and Secretary, Department of Social Security (1997) 49 ALD 137, 151.
CONCLUSIONS
Based upon the above, the Tribunal has come to the conclusion that special circumstances have been established in this case and that some forgiveness of the various debts should be considered in the light of that finding.
In relation to the DSP debt, there are three elements in the waiver provision of section 1237AAD of the SS Act. The Applicant has, itself, acknowledged that the first element (“knowingly”) does not act as a barrier to the Respondent’s claim for waiver, and in relation to the second element the Tribunal has found that “special circumstances” exist.
The third element is the discretion to decide whether it is more appropriate for a debt to be waived than to be written off (section 1237AAD(c)). Debts written off (section 1236) are not extinguished. They may be reversed and recovery proceedings may be instituted at some later stage where circumstances change as discussed above.[83]
[83] Guide at 6.7.3.10.
Debts which are waived under section 1237AAD are taken to have been eliminated such that they cannot be restored at some time in the future.
The prospect of a significant change in the Respondent’s circumstances appear limited in respect to her ongoing health problems and mental health issues, compounded by the continuing stress placed upon her husband and the challenges of meeting both potential significant medical expenses and financial responsibilities.
As such, it would be more appropriate to waive, rather than write off, the debt in this case.
The position of the FBT debts are somewhat different. The AAT1 found:
[30] With respect to the family tax benefits debts, which arise directly from the disability support pension error, section 97 of the (FA) Administration Act applies. For the most part, this section is the same as section 1237AAD of the (SS) Act. This section is different with respect to the time when the debt was raised. It says that, if the debt is raised in the year following the year in which the payments were made, the debt can be waived only if its recovery would cause severe financial hardship.
[31] The family tax benefits debts cover the 2015/16, 2016/17 and 2017/18 tax years. They were all raised on 6 November 2018. That is to say, they were raised within the 12 months following the 2016/17 and 2017/18 years. The limitation does not apply to the 2015/16 year.[84]
[84] Tribunal documents at [10].
This line of reasoning led the AAT1 to determine that the FTB debt for the 2015/2016 financial year should be waived, relating it back to its finding that the initial DSP debt arise from sole administrative error on the part of the Department. The AAT1 went on to find that the Respondent’s claim for special circumstances, made under section 101 of the FA Administration Act could not be enlivened because of the “severe financial hardship” provisions of section 97.
However, this Tribunal has found that there was no sole administrative error but that special circumstances exist. This finding applies both to the DSP debt and the FTB debts. Both sections 1237AAD of the SS Act and section 101 of the FA Administration Act are enlivened and their requirements satisfied.
DECISION
The decision under review is set aside and in substitution:
1.the decision to cancel the Respondent’s disability support pension is affirmed;
2.the Respondent’s disability support pension debt for the period 25 January 2011 to 6 November 2018 is waived in its entirety pursuant to section 1237AAD of the Social Security Act 1991 (Cth); and
3.the Respondent’s family tax benefit debts for the 2015/2016, 2016/2017 and 2017/2018 years are waved in their entirety pursuant to section 101 of A New Tax System (Family Assistance) (Administration) Act 1999 (Cth).

I certify that the preceding 139 (one hundred and thirty-nine) paragraphs are a true copy of the reasons for the decision herein of Chris Puplick AM, Senior Member

...............................[sgd].........................................
Associate
Dated: 19 March 2021

Date(s) of hearing: 18 and 19 January 2021

Solicitors for the Applicant: Services Australia

Solicitors for the Respondent: Legal Aid NSW

Date(s) of hearing:	18 and 19 January 2021
Solicitors for the Applicant:	Services Australia
Solicitors for the Respondent:	Legal Aid NSW