Forrest and Secretary, Department of Social Services (Social services second review) - [2021] AATA 586

Forrest and Secretary, Department of Social Services (Social services second review) [2021] AATA 586 (23 March 2021)
Division:GENERAL DIVISION
File Number: 2020/1737
Re:Diana Forrest
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Brigadier A G Warner, AM LVO (Retd), Member
Date:23 March 2021
Place:Perth

The decision of the Respondent, as affirmed by the Social Services & Child Support Division of the Tribunal, which found that the Applicant was overpaid Family Tax Benefit totalling $9,531.74 for the 2018/19 financial year and that the overpayment is a recoverable debt, is affirmed.
................................[Sgd]........................................
Brigadier A G Warner, AM LVO (Retd), Member
CATCHWORDS
SOCIAL SECURITY – Family Tax Benefit – whether Applicant was overpaid Family Tax Benefit – whether debt due to Commonwealth – whether debt should be recovered – waiver – whether sole administrative error – whether there are special circumstances – whether Applicant knowingly failed to comply with requirements of family assistance law – write-off – decision under review affirmed
LEGISLATION
A New Tax System (Family Assistance) Act 1999 (Cth) – ss 3, 58, 20D of sch 1, 2(1)(d) and 2(1)(f) of sch 3
A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) – ss 3, 20, 25, 71, 95, 97, 97(4), 101, 105, 154, 158, pt3, div 1, sub-div D
Income Tax Assessment Act 1997 (Cth) – ss 4-15
CASES
Angelakos and Secretary Department of Employment and Workplace Relations (2007) 100 ALD 9
Beadle and Director-General of Social Security (1984) 6 ALD 1
Campagna and Secretary, Department of Social Services [2018] AATA 5160
Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Groth and Secretary Department of Social Security (1995) 40 ALD 541
Hoadley and Department of Family and Community Services [2000] AATA 965
Re Gerhardt and Secretary, Department of Employment, Education and Training [1996] AATA 173
Re Lumsden and Secretary Department of Social Security (1986) 10 ALN N225
Re Stubbs and Secretary Department of Families and Community Services (2003) AATA 03/0729
Secretary, Department of Family and Community Services and Birgden [2003] AATA 67
Williams and Secretary, Department of Employment and Workplace Relations [2005] AATA 1133
SECONDARY MATERIALS
Guides to Social Policy Law, Family Assistance Guide, Topic 3.1.5.55
REASONS FOR DECISION
Brigadier A G Warner, AM LVO (Retd), Member
23 March 2021
INTRODUCTION

The Applicant seeks review of a decision of the Social Services & Child Support Division (AAT1) of the Administrative Appeals Tribunal (the Tribunal) dated 3 March 2020 (T2), which affirmed the decision of a delegate of the Respondent (Reviewable Decision). The Reviewable Decision found that the Applicant was overpaid Family Tax Benefit (FTB) totalling $9,531.74 for the 2018/2019 financial year and that the overpayment was a recoverable debt.
The hearing for the current application was conducted in Perth by telephone conference on 24 February 2021. The Applicant participated and gave evidence on affirmation.
Ashley Burgess of Sparke Helmore Lawyers represented the Respondent.
BACKGROUND
The Applicant is presently 47 years of age (T1/2) and has three children relevant to the application before the Tribunal (the Children). The Applicant was in receipt of FTB and maintenance income during the period 1 July 2018 to 30 June 2019 (the Relevant Period).
During the relevant period the Applicant was sent various notices which all advised the Applicant to notify Services Australia (Centrelink) of any changes to her income as soon as possible, being the letters dated 1 July 2018 (T14), 9 July 2018 (T16), 12 July 2018 (T18), 14 July 2018 (T19), 16 July 2018 (T20), 21 July 2018 (T22), 4 August 2018 (T23), 16 August 2018 (T25), 27 August 2018 (T27), 29 August 2018 (T30), 1 September 2018 (T31), 4 September 2018 (T33), 11 September 2018 (T36), 13 September 2018 (T37), 18 October 2018 (T39), 22 October 2018 (T40), 29 October 2018 (T41), 15 November 2018 (T43), 17 November 2018 (T44), 15 March 2019 (T51), 20 March 2019 (T52), 23 April 2019 (T53), and 31 May 2019 (T54).
On or around 22 September 2017, the Applicant began residing at a rental property in Spearwood (the Spearwood Property). The Applicant advised Centrelink of this change on or about 22 February 2018 (T79/686).
On the same date, being 22 February 2018, the Applicant advised Centrelink of changes to her income with effect from 22 September 2017 (T79/687). The Applicant also advised Centrelink that she was in receipt of rental income from a property owned in Munster (the Munster Property) (T79/687).
On 24 January 2018, the Applicant stopped working (T79/689), and on or about 2 March 2018, the Applicant was granted Newstart Allowance (T79/690).
On or around 3 June 2018, the Applicant lodged a request for “[e]arly release of superannuation benefits on the grounds of severe financial hardship” for a gross amount of $10,000. The form relevantly noted that the amount will be subjected to tax (T70/384). The taxable component of this payment was $9,277 (T61/333).
On or around 25 July 2018, the Applicant commenced fulltime employment with Bae Systems (T78/650).
On 16 August 2018, the Applicant departed Australia and returned on 25 August 2018 (T79/700).
On 11 September 2018, the Applicant’s Newstart Allowance was cancelled with effect from 25 July 2018 (T35).
On 5 August 2019, the Australian Taxation Office (ATO) confirmed the Applicant’s taxable income was $83,839 (T61/328) and a net rental investment loss of $25,598 (T61/336). Accordingly, the Applicant’s adjustable taxable income for the relevant period was $109,437. These figures are confirmed by the Applicant’s income tax return for the relevant period (T61/328-342).
The Applicant’s FTB entitlements were reconciled using the income verified by the ATO and a child support annualised maintenance assessment amount of $10,972.48 (T71/400 and ST1/756-757).
By correspondence dated 12 August 2019, the Applicant was informed that she received an FTB totalling $14,114.08 but that her correct entitlement was $7,404.87 during the Relevant Period. Centrelink decided to raise an FTB debt of $6,709.21 for the Relevant Period (T58). The Applicant’s tax refund was automatically withheld by a commensurate amount to offset the debt.
On 14 August 2019, the Applicant asked Centrelink to review the decision which raised the FTB debt. A file note of this contact states (T79/731):
Why does the customer want the decision quality checked? Customer disagrees with the calculation process done for FTB reco. [C]us estimated $92000 actual income $109437. [C]ust advised that she received early super and insurance payout which added up. [C]ust also mentioned that she disagrees with child support assessment amount receive as she don’t receive that money. [C]usto disagrees to pay FTB B amount raised as debt due to income. [C]ust like to dispute as she believe the calculation is wrong and she doesnt have to pay anything and needs her money back.
On 20 August 2019, the Applicant informed Centrelink of the early release of her superannuation funds, approximately one year after receiving the funds.
On 27 December 2019, the Child Support Agency confirmed that the Applicant’s annualised maintenance assessment amount for the relevant period had been revised to $16,360.14 (T71/400 and ST1/756-757). As a result of this, the Applicant’s entitlement to FTB was
re-reconciled, and by correspondence dated 27 December 2019, the Applicant was informed that Centrelink had re-reconciled her entitlement and adjusted the debt such that an FTB debt of $9,531.74 was raised for the Relevant Period (T67). This was on the basis that the Applicant’s correct entitlement was $4,582.34 (and not $7,404.87).
On 10 January 2020, an Authorised Review Officer (ARO) affirmed the decision which raised the FTB debt (T71). The ARO found that Applicant received $9,531.74 in excess of her correct entitlement and that this was a debt due to the Commonwealth. The ARO also found that the debt could not be waived under the sole administrative error or special circumstances provisions (T71).
On 20 January 2020, the Applicant sought review of the ARO’s decision in the AAT1, and on 3 March 2020 the AAT1 affirmed the decision under review. The AAT1 found that the debt was correctly calculated and could not be waived (T2).
On 23 March 2020, the Applicant sought further review of the Reviewable Decision in the Tribunal (T1). In her application, the Applicant stated: ‘[s]eeking a review on the extension of special circumstances. Also my earnings are currently $6032 per month not $8190. This could be significantly reduced given, employment uncertainty’ (T1/4).
The Respondent advises (Exhibit R1, para [3.23]):
[t]he Applicant is currently receiving Family Tax Benefit (A and B) in the amount of $376.46 per fortnight and her income is $6,032 per month (T1/4). The Applicant is not making any repayments on the debt and she does not have any active arrangements for repayment. The debt balance is currently $2,762.53.
ISSUES
The Tribunal must decide whether the Applicant was overpaid FTB in excess of her entitlements for the Relevant Period, whether this resulted in a debt to the Commonwealth and if so, whether all or part of the debt should be recovered.
LEGISLATION AND POLICY
The relevant legislation is contained within A New Tax System (Family Assistance) Act 1999 (the Family Assistance Act), A New Tax System (Family Assistance) (Administration) Act 1999 (the Family Assistance Administration Act), and the Income Tax Assessment Act 1997 (the Income Tax Act).
Relevant policy is contained in the Family Assistance Guide (the Guide).
To ensure consistency in decision-making, the Tribunal should follow the relevant policy unless there is a cogent reason to depart from its application (see Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634).
EVIDENCE
The Tribunal had before it the following evidence:
·the ‘T Documents’ (T1–T79, pp 1–754);
·the ‘Supplementary T Documents’ – Debt Recalculation (ST1, pp 755–757);
·Applicant’s Submissions in reply to Respondent’s Statement of Issues, Facts and Contentions including Attachments 1–5, dated 17 November 2020 (Exhibit A1);
·Applicant’s Debt Waiver Request email, dated 11 August 2020 (Exhibit A2);
·Applicant’s Child Support Submissions, dated 19 June 2020 (Exhibit A3);
·child support assessment details 2018-2019, filed with the Tribunal 19 June 2020 (Exhibit A4);
·child support supporting documents, dated 16 June 2020 (Exhibit A5);
·email submission, dated 15 May 2020 (Exhibit A6);
·Applicant’s letter to ARO, dated 9 January 2020 (Exhibit A7);
·police order, dated 13 September 2017, filed with the Tribunal 15 May 2020 (Exhibit A8);
·email submission regarding domestic violence and financial abuse, dated 12 May 2020 (Exhibit A9);
·email submission regarding unfair dismissal and Fair Work settlement result, dated 15 May 2020 (Exhibit A10);
·Respondent’s Statement of Issues, Facts and Contentions dated 3 September 2020 (Exhibit R1); and
·the oral evidence of the Applicant.
CONSIDERATION
Was the Applicant overpaid Family Tax Benefit during the relevant period?
Before the Tribunal, the Applicant rejected the debt overall, stating: ‘it’s my position that the debt procured illegitimately. Reasoning was omitted through the whole process’ (transcript p 6).
A person’s rate of FTB for a financial year is based on an estimate of adjusted taxable income for that year. At the end of the financial year a reconciliation is conducted. The estimated income used to calculate the rate during the financial year is compared with the person’s actual adjusted income for that year. If the person received excess FTB, they may incur a debt. If they received too little, they may receive back payment (that is, a top-up of their FTB payment). FTB supplements are taken into account in the reconciliation.
The Respondent relies on the information provided by the ATO and the Child Support Agency, the detailed assessment undertaken by the ARO and the debt calculations (T77). The Respondent contends that the Applicant received Family Tax Benefit of $14,114.08 during the relevant period when only entitled to receive $4,582.34, resulting in an overpayment of $9,531.74 (Exhibit R1, para [5.1]).
Section 58 and Schedule 1 of the Family Assistance Act set out how to calculate the rate of FTB. A person’s entitlement is calculated for a whole financial year.
An adjusted taxable income is used to calculate the rate. Section 58 of the Family Assistance Act, read with the rate calculator in Schedule 1 of the Family Assistance Act, provides that eligibility for FTB is subject to income tests.
Section 3 of the Family Assistance Act provides that ‘taxable income has the same meaning as in the Income Tax Assessment Act’ 1997 (the Income Tax Act). Section 4-15 of the Income Tax Act sets out how to work out a person’s taxable income. In summary, a person’s taxable income is worked out by subtracting all of a person’s deductions from all of the person’s assessable income for the income year; that is ‘Taxable Income = Assessable Income – Deductions’.
Schedule 1 pt 3 div 5 of the Family Assistance Act sets out how to calculate the effect of maintenance income on a person’s FTB rate. Relevantly, s 20D outlines how child maintenance income is accounted for when it is privately collected. The Applicant has elected to privately collect child support entitlement rather than requesting Child Support to collect it for her. Section 20D of sch 1 to the Family Assistance Act states:
20DWorking out amounts of child maintenance for administrative assessments privately collected
(1)This clause applies if, during a period in an income year:
(a)an individual is entitled to receive an amount of child maintenance for an FTB child of the individual under a liability under an administrative assessment (within the meaning of the Child Support (Assessment) Act 1989); and
(b)the liability is not an enforceable maintenance liability (within the meaning of the Child Support (Registration and Collection) Act 1988); and
(c)the child maintenance is not maintenance to which clause 20B applies; and
(d)the Secretary considers that it is reasonable for the individual to take action to obtain the amount.
Individual taken to have received full entitlement
(2)For the purposes of this Act, the individual is taken to have received, for the period in the income year, the amount of child maintenance for the child that the individual is entitled to receive under the liability, disregarding so much of that amount as is attributable to the individual receiving disability expenses maintenance.
(Original emphasis.)
Section 20 of the Family Assistance Administration Act provides that a person’s rate of FTB may be calculated using their estimate of income, indexed estimate or indexed actual income.
Subdivision D of Division 1 of Part 3 of the Family Assistance Administration Act sets out FTB reconciliation conditions. The reconciliation process compares the person’s FTB entitlement for the financial years based on their actual ‘adjusted taxable income’, with the amount the person received during the year based on the estimated income. An adjustment takes place where reconciliation shows a difference between the amount of FTB the person received and their correct entitlement.
Pursuant to s 3 of the Family Assistance Act, ‘adjusted taxable income’ has the meaning given by sch 3, which provides that it is the sum of an individual’s taxable income, adjusted fringe benefits, target foreign income, total net investment loss, tax free pension or benefit and reportable superannuation contributions, less deductible child maintenance expenditure. Net investment losses and reportable superannuation contributions have the meaning prescribed by the Income Tax Act (ss 2(1)(d) and 2(1)(f) of sch 3 of the Family Assistance Act).
Section 105 of the Family Assistance Administration Act states:
105 Secretary may review certain decisions on own initiative
(1)If:
(a)a decision (the original decision) is a decision that, under section 104, the Secretary may review under this section; and
(b)the Secretary is satisfied that there is sufficient reason to review the decision;
the Secretary may review the decision.
(Original emphasis.)
Section 25 of the Family Assistance Administration Act provides that a claimant (being the Applicant) has an obligation to notify the Department of changes to her circumstances.
Section 154 of the Family Assistance Administration Act states:
154 General power to obtain information
(1)The Secretary may require a person to give information, or produce a document, to a specified agency if the Secretary considers that the information or document may be relevant to either or both of the following matters:
(a)whether the person, or any other person, whom the Secretary has determined to be entitled to be paid family assistance is or was eligible for the family assistance, or for family assistance of the amount determined;
(b)whether the person or any other person to whom a payment of family assistance has been made was entitled to the payment.
Section 158 of the Family Assistance Administration Act further states:
158 Written notice of requirement
(1)A requirement under this Division must be made by written notice given to the person of whom the requirement is made.
(2)The notice:
(a)may be given personally or by post or in any other manner approved by the Secretary; and
(b)must specify:
(ia)    a description of the information, document or records to which the requirement relates; and
(i)     how the person is to give the information or produce the document or records to which the requirement relates; and
(ii)     the period within which the person is to give the information or produce the document or records; and
(iii)     the officer (if any) to whom the information is to be given, the document is to be produced or the records are to be produced; and
(iv)    that the notice is given under this section.
Note:The notice may describe the information, documents or records by class (see subsection 33(3AB) of the Acts Interpretation Act 1901).
(3)For the purposes of paragraph (2)(b), the period must not end earlier than 14 days after the notice is given, unless the Secretary is satisfied that it is reasonable in the circumstances, for the purposes of the effective administration of the family assistance law, to specify a shorter period.
During the Relevant Period the Applicant was sent various notices which advised her to notify Centrelink of any changes to her income as soon as possible (paragraph [5] above refers).
The Applicant contends that Centrelink raised her FBT debt unlawfully and that the methodology used is flawed (transcript p 6). In relation to her taxable income, the Applicant submits:
(a)‘[i]t is unjust for Centrelink to include a Super withdrawal made under hardship as a basis to create a debt with the intent to financially impact me further’. She further submits that the delay in processing her request for release of funds from her superannuation provider meant that her request (made on 3 June 2018 in the 2017/2018 financial year) was only processed on 4 September 2018, in the 2018/2019 financial year, and that had the withdrawal been processed before 30 June 2018 her assessable income would have been below the threshold resulting in no debt (T74/417);
(b)that because Centrelink knew she was seeking to access her superannuation, Centrelink must have known that her withdrawal of funds was approved (transcript p 11–12); and
(c)the debt arising from child support payments arose ‘from a standard assessment process that does not include the actual circumstances, in this case bankruptcy’ (Exhibit A7), and that her ‘Child Support Annualised maintenance assessment, involves elements that [she has] no control over and fail[s] to see how [she] can be legally responsible for a debt’ (T74/417).
Funds from the Applicant’s superannuation fund as taxable income

Relevantly, in Campagna and Secretary, Department of Social Services [2018] AATA 5160 (Campagna), the applicant argued that the ATO had inappropriately assessed a superannuation payout for total permanent disability and financial hardship. At paragraphs [34] and [37], the Tribunal in Campagna found that the ATO had assessed his income appropriately.
The ATO found that the Applicant’s adjusted taxable income for the relevant period was $109,437 (T61/328-342). The form completed by the Applicant noted that the funds released from her superannuation were subject to tax (T70/384) and that the amount released from her superannuation fund was included in her income tax return (T61/333). It does not appear that the Applicant disputes this figure but rather the Applicant is asking the Tribunal to exclude the income received from the superannuation fund. The Respondent submits that this Tribunal cannot exclude income that the ATO has determined to be taxable income (Exhibit R1, para [5.20]). Further, the Respondent submits that there is no evidence to suggest that the ATO has not assessed the Applicant’s income for the relevant period appropriately and accordingly this Tribunal must accept the ATO’s finding (Exhibit R1, para [5.22]). The Tribunal agrees with the Respondent’s submissions in this regard.
Despite the Applicant’s contention about the fairness of the process, the Respondent submits that the Tribunal does not have any discretion to exclude the funds received from the Applicant’s superannuation fund (Exhibit R1, para [5.20]). Again, the Tribunal agrees, and pursuant to s 3 of the Family Assistance Administration Act, the Tribunal is satisfied that the Applicant’s taxable income is $109,437.
Maintenance income
Topic 3.1.5.55 of the Family Assistance Guide states the following:
Reasonable maintenance action completed - private collect
…
Individuals privately collecting child support
Individuals who are privately collecting child support are deemed to have received the full child support entitlement for the purposes of the maintenance income test (MIT) (3.1.7) if it is reasonable for the individual to take action to collect their full entitlement. The deemed amount still applies even if the amount collected by the payee is more or less than the entitlement.
Example: Since 2009 Tracey has a private collect child support entitlement of $10,000 per financial year. In 2012-13 Tracey collected $10,500 in child support payments. As Tracey is a private collect individual she is deemed to have received $10,000 which is applied to the MIT. If the $500 is related to arrears from before 1 July 2012, this amount would be included as part of the MIT.
(Original emphasis.)
It is not in contention that the Applicant is on a ‘private collect’ child support arrangement. A person can elect to receive their child support privately or they can ask the Child Support Agency to collect it for them. As per the Family Assistance Guide, if a person elects to privately collect their child support entitlement, they are deemed to receive their entitlement for the maintenance income test, regardless of whether or not they receive less than their entitlement, or whether the amount collected exceeds their entitlement. The data is reconciled at the end of the financial year when the parties, namely the Applicant and her ex-partner, submit their separate tax returns. This ‘private collect’ system relies on the parties to accurately report their income estimates at the beginning of the financial year. If either party does not accurately report their income, then the reconciliation process at the end of the financial year adjusts that party’s entitlement for any inaccuracy.
The Respondent acknowledges the Applicant’s claims that she has no control over when her ex-partner lodges his income tax return or when his taxable income is increased (Exhibit A2). The Respondent submits that this is ultimately an inherent risk when a recipient of an FTB chooses to receive payment based on estimated income rather than waiting until the end of the financial year when the actual income can be used to accurately calculate the entitlement to an FTB. The Tribunal notes that it is open to the Applicant to receive her FTB at the end of the financial year after reconciliation.
The Respondent also submits that the re-reconciliation in the present application was a result of further information provided by the Child Support Agency (Exhibit R1, para [5.26]).
The evidence is that on 5 August 2019, the Child Support Agency notified Centrelink that the Applicant’s maintenance income in respect of the Children for the relevant period was $10,972.48 (ST1/757). This amount of $10,972.48 was included as income attributed to the Applicant in the FTB reconciliation undertaken on 5 August 2019. This reconciliation initially resulted in a calculation that the Applicant was overpaid FTB by $6,709.21 (T58/309). Subsequently, on 27 December 2019, the Child Support Agency provided further information to Centrelink (following information received from the Applicant’s ex-partner) and advised Centrelink that the Applicant’s maintenance income in respect of the Children, for the Relevant Period, was $16,360.13 (not $10,972.48) (ST1/757). This updated information triggered a re-reconciliation of the Applicant’s FTB, which resulted in a determination that the Applicant was overpaid FTB by an additional $2,822.53. The inclusion of this additional amount comprised a total overpayment of $9,531.74 (T67).
Like the Respondent, the Tribunal must rely on the detailed breakdown of the maintenance income at ST1, as the maintenance income as reported by the Child Support Agency is the only maintenance amount that can be considered by the Tribunal. There is no discretion for this Tribunal to go behind the findings of the Child Support Agency and vary the Applicant’s income maintenance amount even in circumstances where the Applicant claims that the maintenance income, she actually received is less than what she is entitled to receive, because:
(a)s 20D of Schedule 1 of the Family Assistance Act provides that the Applicant, as someone who is registered to privately collect her maintenance income, is ‘taken to have received, for the period in the income year, the amount of child maintenance for the child that the individual is entitled to receive under the liability’. The Applicant is entitled to receive $16,360.13 in maintenance income for the Children and therefore the Applicant is taken to have received that amount; and
(b)this Tribunal does not in the present proceedings have jurisdiction to review a decision of the Child Support Agency. The Child Support Agency has calculated the maintenance income based on the information provided by the Applicant and her ex-partner. If the Applicant disagrees with this assessment, then it is open to the Applicant to seek review of the Child Support Agency’s decision. Relevantly, the Applicant told the ARO who made the decision of 10 January 2021 that she received the numerous letters sent by the Child Support Agency, but that she did not read them (T71/405). Further, the Applicant told this Tribunal that she was still on a ‘private collect’ arrangement, and had taken no action to obtain her entitlement from her ex-partner ‘because he’s bankrupt, and there is no prospects of ever receiving that kind of money from him’ (transcript p 18).
Having regard to the relevant material, the Tribunal is satisfied that the FTB debt amount of $9,531.74 has been correctly calculated. This review is of course de novo, but the Tribunal notes that this amount is consistent with the amount found independently by the ARO (T71/401) and the AAT1 (T2/6).
Is the overpayment of FTB a debt due to the Commonwealth?
Section 71 of the Family Assistance Administration Act provides that:
Overpayment
(2)If:
(a)an amount (the received amount) has been paid to a person by way of assistance; and
(b)the received amount is greater than the amount (the correct amount) of assistance that should have been paid to the person under the family assistance law;
the difference between the received amount and the correct amount is a debt due to the Commonwealth by the person.
(Original emphasis.)
The Tribunal is satisfied that the Applicant’s overpayment of FTB in the amount $9,531.74 has been correctly calculated (see debt explanation at T77/421–430). Pursuant to s 71 above, this amount is a debt owed to the Commonwealth.
Should all or part of the FBT debt be recovered?
Part 4, div 4 of the Family Assistance Administration Act provides two mechanisms by which a properly raised debt might not be recovered, being write off and waiver. The Respondent submits that the write-off and waiver provisions are not enlivened in this matter (Exhibit R1, para [5.36]), noting that (Exhibit R1, para [5.35]):
The Federal Court of Australia has set precedent for the expectation that money paid to individuals who are not entitled to it will be recovered. In Director of Social Services v Hales (1998) 47 ALR 281, Justice French, as he then was, stated at [1]:
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.
Waiver
Section 97 of the Family Assistance Administration Act allows recovery of a debt to be waived if the debt is solely because of an error by the Commonwealth, the person received the payment in good faith and the person would suffer severe financial hardship if the debt was not waived. All criteria must be met for recovery to be waived. Section 97(4) also allows that the administrative error proportion of the debt may be 100 per cent of the debt.
The Tribunal considered the meaning of the word ‘solely’ in the case Re Gerhardt and Secretary, Department of Employment, Education and Training [1996] AATA 173, and 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.
The Tribunal has considered the sole administrative error requirement in a number of cases.
(a)In Hoadley and Department of Family and Community Services [2000] AATA 965, a debt was raised by the Department of $9,338.20 due to Mrs Hoadley’s failure to include Comsuper pension payments as part of her income. In this instance, the Tribunal affirmed the Department’s decision to recover the debt.
(b)In Williams and Secretary, Department of Employment and Workplace Relations [2005] AATA 1133 (Williams), the Tribunal affirmed the Department’s decision to raise and recover a debt as a result of an overpayment of Newstart allowance. In that case, the applicant was in receipt of Newstart from August 2000 until October 2004 and then became a recipient of a Comsuper pension. The applicant in Williams declared this to the Department which, due to an administrative error, did not record the declaration correctly, resulting in an overpayment. The Tribunal in Williams at [24] noted that the Applicant did not record his Comsuper pension on his fortnightly income form and also that the Applicant had a ‘strong suspicion’ that he should not be receiving higher Newstart allowance. Senior Member Hastwell found that the Applicant did not satisfy the good faith requirements for the debt to be waived.
The term ‘severe financial hardship’ is not defined in any of the relevant legislation listed at paragraph [24] above but has been considered by the Tribunal in numerous cases.
(a)In Re Lumsden and Secretary Department of Social Security (1986) 10 ALN N225 the Tribunal at 227 required that for the term ‘severe financial hardship’ to be satisfied, a person’s entire financial position would need to be materially less than the current rate of pension.
(b)The Tribunal in Re Stubbs and Secretary Department of Families and Community Services (2003) AATA 03/0729 stated that:
Severe financial hardship, while not implying destitution, goes beyond straitened financial circumstances and imports a need for the particular case of a person to include financial suffering of a severe or extreme nature. …
(c)In Secretary, Department of Family and Community Services and Birgden [2003] AATA 67, the Tribunal stated at paragraph [77]:
The Tribunal notes that the respondent and her partner have incurred many expenses in caring for their son, and that her family lives very frugally. However, they are able to make ends meet. Their income exceeds what those relying solely on government payments receive. Recovery of the debt would occasion severe inconvenience, stress, and some financial hardship, but the Tribunal is unable to find that such hardship would be “severe” in the context of the Act. The Tribunal consequently cannot find that the respondent satisfies s97(2)(b) of the Act. Hence the Tribunal cannot waive the debt under s97 of the Act ...
In its consideration the Tribunal has regard to the Applicant’s contentions that she has not been wilful or negligent in creating the FTB debt and that the debt was caused by the actions of the Commonwealth, namely income recording, use of a redundant child support amount to calculate her FTB, and the late processing of her superannuation relief (transcript p 19). Having carefully considered the relevant material before it, the Tribunal finds that the Applicant’s overpayment of FTB resulted from the following:
(a)the Applicant under reporting her income for the Relevant Period by not accounting for the early release of her superannuation funds;
(b)the Applicant failing to inform Centrelink of the early release of her superannuation funds until 20 August 2019, approximately one year after receiving the funds. The Tribunal notes that during the hearing, the Applicant was asked if she could point to any evidence that she had told Centrelink that she had received the superannuation withdrawal funds, and the Applicant was unable to do so (transcript p 12); and
(c)a retrospective change made to the Applicant’s maintenance income following additional information provided by the Applicant’s ex-partner.
These circumstances do not constitute administrative error made by the Commonwealth such that the sole administrative error provisions of s 97 of the Family Assistance Administration Act could be enlivened (see paragraph [55] above).
Although it is not strictly necessary to do so, the Tribunal now briefly addresses whether the Applicant received the payment in good faith, and whether she would suffer severe financial hardship if the debt were not waived.
Relevantly, the Applicant was advised by various notices to advise Centrelink of any changes to her income (see paragraphs [5] and [40] above). As already mentioned, the Applicant failed to inform Centrelink of the early release of the superannuation funds until 20 August 2019 (approximately one year after receiving the funds) (T60/314). In these circumstances, the Tribunal is unable to conclude that the Applicant received the overpayments in good faith.
In Exhibit R1 at [5.61], the Respondent submits that the Applicant would not suffer severe financial hardship if the debt were not waived, for the following reasons:
(a)Relevantly, an amount of $6,709.21 was withheld from the Applicant’s tax refund for the 2018/2019 financial year and the debt balance is presently $2,762.53.
(b)The Applicant in her Application for Review has advised that her income is $6,032 per month (T1/4).
(c) The Applicant is … presently employed and has been since 25 July 2018, when she commenced employment with Bae Systems (T78/650).
(d)The Applicant gave evidence to the AAT1 that she is employed as a project planner and she earns $8,190 per month (T2/9).
(e)The Applicant is also in receipt of Family Tax Benefits in the amount of $376.46 per fortnight and her ex-partner may pay for fees associated with schooling and excursions in respect of the Children (T2/9).
(f)The Applicant’s mortgage is up to date (T2/9).
(g)The Applicant receives rental income from the Munster property (T14/189, T56 and T79/687).
(h)The Applicant has had the funds to travel overseas on 16 August 2018, 23 April 2019 and 31 May 2019 (T78/667).
(i)The Applicant retains the right to recover any outstanding child support payments not yet received.
The Applicant did not dispute these reasons during the hearing, however told the Tribunal that she had reached out ‘to Centrelink requesting assistance to get money out of my super to help me in time of unemployment and stress and all sorts of situations and what was happening at that point in time’ (transcript p 11).
The Respondent submits that even if the Tribunal finds that the debt resulted from sole administrative error (contrary to submissions), the Tribunal must be satisfied that the Applicant would suffer severe financial hardship if the debt were not waived. Having regard to the authorities and the Applicant’s circumstances, the Tribunal finds that the Applicant would not suffer severe financial hardship if the debt was not waived.
Special circumstances
Section 101 of the Family Assistance Administration Act allows recovery of a debt to be waived where the person did not knowingly make a false statement or fail to comply with provisions of the family assistance law, and where there are special circumstances, other than financial hardship alone, that make it desirable to waive the debt.
The term ‘special circumstances’ is not defined in the Family Assistance Administration Act. However, a number of authorities provide guidance as to its interpretation and application.
(a)In Beadle and Director-General of Social Security (1984) 6 ALD 1, 3 (Beadle) the Tribunal stated:
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)In Groth and Secretary, Department of Social Security (1995) 40 ALD 541, 545 (Groth) 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. 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.
(c)In Angelakos and Secretary Department of Employment and Workplace Relations (2007) 100 ALD 9 (Angelakos) the Federal Court stated:
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.

The Respondent submits that ‘there is no evidence that there are special circumstances that warrant exercise of the discretion in s 101 of the Family Assistance Administration Act to waive recovery of all or part of the debt due to special circumstances’ (Exhibit R1 para [5.71]).
In its consideration of the Applicant’s circumstances, the AAT1 found that the evidence before that tribunal demonstrated that (T2/9):
·     [The Applicant] remains employed as a project planner. Her employment is secure and she earns $8,190 per month.
·     She remains in receipt of some limited family tax benefits.
·     She no longer receives child support in cash but her ex-partner may pay for fees associated with schooling, excursions etc. She is primarily responsible for three children aged 16, 15 and 13.
·     Her mortgage is up to date but due to the volatile housing market in WA her home is worth less than the mortgage.
·     She has no savings.
·     The family is in good health overall but her youngest son will now require extensive paediatric orthopaedic intervention due to a significant baseball injury. [The Applicant] anticipates many out of pocket expenses (to date not incurred).
·     [The Applicant] cannot afford child care and relies on her parents to assist with after school care.
Although of course this review is de novo, the Tribunal has regard to this evidence in its present consideration, together with circumstances acknowledged by the Respondent in Exhibit R1 at [5.74], namely:
(a)the Applicant told the ARO that she was the subject of a domestic violence incident, (T71/404) which occurred on or about September 2017 (T70/363). The Applicant has submitted a police order in support of this contention however, the Secretary submits that the document does not contain any details. Relevantly, even the details regarding the protected person are blank (T70/365).
(b)the Applicant had an expense of $4,100 in respect of surgery on or about 26 May 2018 (T70/390).
(c)the Applicant was scheduled to undergo a procedure on 22 November 2019 although it is not clear what procedure she was scheduled to undergo (T66/354).
(d)the Applicant’s mortgage was in arrears as at 14 May 2018 (T70/391). It appears the mortgage was in respect of an additional property at 213 Spearwood Avenue, Spearwood. However, her mortgage payments are since up to date.
(e)the Applicant incurred relocation costs of $20,459.00 when she moved to the Spearwood property in September 2017 (T70/363).
The Tribunal also carefully considered the information provided by the Applicant on 15 May 2020 regarding an unfair dismissal and Fair Work settlement result, with the aim ‘to widen the scope for consideration for debt waiver under Special Circumstances’ (Exhibit A10). The Tribunal notes that the Applicant departed Australia on 16 August 2018 and returned on 25 August 2018 (see paragraph [12] above).
The Tribunal finds that the Applicant’s circumstances are not exceptional such as required by Beadle, Groth and Angelakos at [57] above, and are not distinguishable from the ordinary and usual cases. Consequently, her circumstances do not enliven s 101 of the Family Assistance Administration Act. The Tribunal notes, and agrees with, the Respondent’s observation that the ‘Applicant’s circumstances are better than most recipients of Commonwealth benefits namely, she is employed in a job that pays a substantial wage, is in receipt of rental income from the Munster property, and her mortgage is up to date’ (Exhibit R1, para [5.73]).
For completeness, the Tribunal notes that access to the special circumstances provision depends on whether the Applicant knowingly failed to comply with the requirements of the Family Assistance Act.
Relevantly, in or around August 2018 the Applicant requested a letter confirming her income support payments for the purpose of supporting her application for early release of superannuation benefits (T29/238). Centrelink’s response letter clearly states: ‘[i]f you (or your partner) are receiving Family Tax Benefit or Child Care Benefit, the amount of superannuation benefits you receive will need to be included in your estimate of your taxable income. It is important that you call us on [number omitted] to update your estimate as soon as possible and discuss how you can reduce any potential overpayment’ (T29/238). However, the Applicant failed to inform Centrelink of the early release of her superannuation funds until 20 August 2019 (approximately one year after receiving the funds) (T60/314). Accordingly, the Tribunal finds that the Applicant knowingly failed to comply with the requirements of the Family Assistance Act.
Write off
Section 95 of the Family Assistance Administration Act details the circumstances in which an FTB may be written-off:
95 Secretary may write off debt
(1)The Secretary may, on behalf of the Commonwealth, decide to write off a debt for a stated period or otherwise, but only if subsection (2), (4A) or (4B) applies.
Secretary may write off debt if debt irrecoverable or debt will not be repaid etc.
(2)The Secretary may decide to write off a debt under subsection (1) 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.
(3)For the purposes of paragraph (2)(a), a debt is taken to be irrecoverable at law if, and only if:
(b)there is no proof of the debt capable of sustaining legal proceedings for its recovery; or
(c)the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or
(d)the debtor has died leaving no estate or insufficient funds in the debtor’s estate to repay the debt.
(4) For the purposes of paragraph (2)(b), if a debt is recoverable by means of:
(a)deductions under section 84; or
(aa)deductions under section 1231 of the Social Security Act 1991; or
(b)setting off under section 84A family assistance; or
(c)application of an income tax refund under section 87; or
(d)setting off under section 87A against a payment referred to in paragraph 82(1)(c) (child care service payments);
the person is taken to have a capacity to repay the debt unless recovery by those means would cause the person severe financial hardship.
The Respondent contends that there is no evidence that the Applicant does not have a capacity to repay the debt or that repaying the debt would result in ‘severe financial hardship’ and that consequently the debt cannot be written off pursuant to s 95 of the Family Assistance Act (Exhibit R1, para [5.38]).
The Applicant in her Application for Review advised the Tribunal that her income is $6,032 per month (T1/4). She also advised Centrelink that at the time of the application, she was presently employed and has been since 25 July 2018, when she commenced employment with Bae Systems (T78/650). $6,709.21 was withheld from the Applicant’s tax refund for the 2018/2019 financial year resulting in a significantly reduced debt balance.
Having careful regard to the relevant evidence as to the Applicant’s financial circumstances, and the guidance relating to the meaning of ‘severe financial hardship’ provided in the authorities at [58] above, the Tribunal finds that the Applicant is capable of repaying the FTB debt. Therefore, the debt cannot be written off pursuant to s 95 of the Family Assistance Administration Act.
CONCLUSION
The Tribunal is satisfied that the Applicant has been overpaid FTB, that the overpayment has been calculated correctly and that the resultant debt should be recovered. The Tribunal finds that 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 the Applicant to repay the money which she has had the benefit of but was not entitled to receive, especially in circumstances where she is less disadvantaged than many recipients of Commonwealth benefits.
DECISION
It follows from the above that the Tribunal affirms the reviewable decision of the Social Services & Child Support Division of the Tribunal dated 3 March 2020.

I certify that the preceding 81 (eighty -one) paragraphs are a true copy of the reasons for the decision herein of Brigadier A G Warner, AM LVO (Retd), Member

.....[Sgd]...................................................................
Associate
Dated: 23 March 2021

Date of hearing: 24 February 2021

Applicant: In person

Counsel for the Respondent: Ashley Burgess

Solicitors for the Respondent: Sparke Helmore Lawyers

Date of hearing:	24 February 2021
Applicant:	In person
Counsel for the Respondent:	Ashley Burgess
Solicitors for the Respondent:	Sparke Helmore Lawyers