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

Fneiche; Secretary, Department of Social Services and (Social services second review) [2022] AATA 825 (11 April 2022)
Administrative Appeals Tribunal

ADMINISTRATIVE APPEALS TRIBUNAL )

) No: 2021/1079

GENERAL DIVISION )
Re: Secretary, Department of Social Services
Applicant

And: Sarah Fneiche
Respondent
DIRECTION
TRIBUNAL:  Dr Damien Cremean, Senior Member
DATE OF CORRIGENDUM:            22 April 2022
PLACE:           Melbourne

The Tribunal directs the Registrar, pursuant to subsection 43AA(1) of the Administrative Appeals Tribunal Act 1975, to alter the text of the decision in this application as follows:

The first sentence of the decision should be changed to:

“The Tribunal sets aside the decision under review to waive the Respondent’s debt to the Applicant pursuant to s 1237A of the Social Security Act 1991 (Cth); and substitutes it with a decision that the Respondent’s indebtedness remains and is not waived.”

.........................[sgd]..........................................
Senior Member
Division:                  General
File Number(s):      2021/1079 – 2021/1082
Re:Secretary, Department of Social Services
APPLICANT

AndSarah Fneiche
RESPONDENT

DECISION
Tribunal:Dr Damien Cremean, Senior Member
Date:11 April 2022
Place:Melbourne

The Tribunal sets aside the decision under review to waive the Applicant’s debt to the Respondent pursuant to s 1237A of the Social Security Act 1991 (Cth); and substitutes it with a decision that the Respondent’s indebtedness remains and is not waived.
................................[SDG]................................
Dr Damien Cremean, Senior Member
Catchwords
SOCIAL SECURITY—Parenting payment—overpayment due to ceasing of residency—whether debt was solely attributable to administrative error—whether “special circumstances” exist—decision set aside and substituted.
Legislation
Social Security Act 1991(Cth)
REASONS FOR DECISION
Dr Damien Cremean, Senior Member

The Respondent is Ms Sarah Fneiche (not Sue Fneiche as noted in some documents) and this is an application for review by the Secretary of a decision of the Social Services & Child Support Division of the Administrative Appeals Tribunal (“Tier1”) made on 12 January 2021 setting aside and substituting a decision of an Authorised Review Officer made on

15 October 2020 deciding that the Respondent’s parenting payment debts between

7 November 2002 and 6 May 2008 be waived pursuant to s 1237A of the Social Security Act 1991(Cth)(“Act”).
Section 1237A of the Act relates to administrative error and provides:
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.
Underestimating value of property
(2) If:
(a) a debt arose because the debtor or the debtor’s partner underestimated the value of particular property of the debtor or partner; and
(b) the estimate was made in good faith; and
(c) the value of the property was not able to be easily determined when the estimate was made;
the Secretary must waive the right to recover the proportion of the debt attributable to the underestimate.
Proportion of a debt
(3) For the purposes of this section, a proportion of a debt may be 100% of the debt.
I also set out s 1237 AAD of the Act, which relates to 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.
Note 1: Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth.
Note 2: This section has effect subject to section 1237AAE in relation to an assurance of support debt.
It is not in issue that the Respondent was overpaid parenting payments on four occasions between the dates in question on the basis that she ceased to be an Australian resident on 1 May 2002.
The sole issue for determination is whether the resulting debt should be waived under either s 1237A or under s 1237AAD of the Act, on account either of administrative error or special circumstances.
A hearing was conducted in this matter on 20 January 2022.
Affirmed evidence was given by the Respondent by telephone from Bahrain, and this was supplemented by affirmed evidence given by audio-visual connection from her brother,

Mr Ismail Elmahoud, who is the Respondent’s attorney under power.
The Applicant was represented by Ms Donaghy of the Australian Government Solicitor.
The Applicant contends that the decision under review cannot be maintained and must be set aside. In particular, the Applicant argues that the debt is owing and due and payable, and should not be waived either due to administrative error or to special circumstances.
The Respondent, however, argues the debt has arisen due to administrative error under

s 1237A and should be waived; or should be waived because of special circumstances under s 1237AAD.
I listened carefully to the evidence of the Respondent and her brother. As regards administrative error, they argue that because of the various entries in her passport (copies of which I have viewed) the Applicant should have been aware of her travelling to and from Australia and that it is wholly due to the Applicant’s error that the debt has arisen.
They argue also that a large sum of money is involved, and the Respondent is in difficult financial circumstances in Bahrain, caring for and bringing up several children at a time now that her husband has retired from work. In other words, life is, and has been, difficult for her financially, especially now.
I have no doubt that the Respondent and her brother (who is unemployed he said) were telling me the truth. Her brother presented the Respondent’s case very convincingly.
I find that life is difficult financially for the Respondent in Bahrain, especially considering her husband has retired.
The Respondent and her brother also gave evidence about having had conversations with officials at Centrelink regarding requirements under the Act or about notifying the Applicant. The evidence, however, was too vague and too long ago for me to be able to make findings about these conversations and whether they took place in the way claimed.
I do find on the evidence that there were notification requirements under the Act which the Respondent, or her brother on her behalf, failed to comply with–not dishonestly–and that this contributed to the Applicant’s belief that the Respondent was entitled to receive benefits under the Act during the disputed period.
I agree the Respondent’s passport is stamped appropriately as regards her travel movements and would alert anyone reading it to those movements. I think in this regard I may also find that from time-to-time Centrelink was also provided with copies of her passport or of copy entries in it. But how far back in time this occurred, when exactly it occurred, how often it occurred, and in what circumstances it occurred, I am unable to say.
I am therefore unable to make a finding that the Respondent, by reason of this, thereby complied with her statutory duty to fully or correctly notify the Applicant as required by the Act. The evidence given by the Respondent or provided on her behalf is, to my mind, unfortunately too vague and imprecise, or lacking in necessary detail, in order for me to be able to make such a finding.
While the Respondent would have provided her passport to immigration authorities when returning to Australia, it needs to be understood also that the Applicant is not the Department which has responsibility for immigration. That Department is a separate Ministerial responsibility in the Australian Government.
In my view, the Applicant was entitled to form a view about the Respondent based on her failure—or the failure of someone on her behalf—to fully or correctly notify the Applicant as required by the Act.
In other words, I am quite satisfied on the evidence given to me that the Respondent’s indebtedness arising from parenting payments in respect of the period in question—although not arising dishonestly—is not due to error on the part of the Applicant or is not wholly due to it under s 1237A of the Act.
In the latter respect, if there has been error on the part of the Applicant—and I do not make any finding there has been—then it has been contributed to by the Respondent in failing to fill out appropriate forms or to keep the Applicant fully informed of her various travel movements or places of residence, as required under the Act.
That is why I say, if there was error on the part of the Applicant, the Respondent’s indebtedness has not arisen wholly because of it.
I therefore reject the argument that the Respondent can rely upon s 1237A of the Act to say the indebtedness should be waived.
Turning to the argument for waiver based on s 1237AAD of the Act, I am satisfied that that argument also must be rejected.
To constitute “special circumstances” there must be circumstances which are out of the ordinary or which are unusual.
I acknowledge, as I have above, that the Respondent is facing financial difficulties, in particular, in Bahrain. But that is not unusual in cases of this kind, special circumstances are claimed. Moreover, the Act itself indicates that financial difficulty alone is not within “special circumstances”.
In reality, there was nothing else in the evidence I was given which would justify me in making findings that special circumstances under s 1237AAD of the Act have arisen in this case such that under that provision the indebtedness should be waived.
Accordingly, I find that special circumstances under s 1237AAD do not exist.
DECISION
The decision under review therefore must be set aside, with a finding that the indebtedness of the Respondent arising from parenting payments is not waived but continues.

I certify that the preceding 30 (thirty) paragraphs are a true copy of the decision herein of Dr Damien Cremean, Senior Member

...........................[SDG]............................................
Associate
Dated: 11 April 2022

Date of hearing:

20 January 2022

Applicant: Ms N Donaghy

Advocate for the Respondent:

Respondent:

Mr Ismail Elmahoud

By phone

[2022] AATA 825

11 April 2022

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Procedural Fairness

Remedies

Statutory Construction

ADMINISTRATIVE APPEALS TRIBUNAL	)
)	No: 2021/1079
GENERAL DIVISION	)