Foxley-Deschamps; Secretary, Department of Families, Community Services and Indigenous Affairs

[2006] AATA 921

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 921

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No W2005/389

GENERAL ADMINISTRATIVE DIVISION		)
Re		SECRETARY, DEPARTMENT OF FAMILIES, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Applicant

And AMANDA FOXLEY-DESCHAMPS

Respondent

DECISION

Tribunal Ms L R Tovey, Member

Date30 October 2006

PlacePerth

Decision The Tribunal varies the decision of the Social Security Appeals Tribunal dated 24 October 2005 by deleting the reference to "under section 1237A of the Social Security Act" and otherwise affirms that decision.

.....[Sgd L Tovey]...........

Member

CATCHWORDS

FAMILY ASSISTANCE – family tax benefit – overpayment due solely to an administrative error made by the Commonwealth – waiver of recovery of debt – payments received in good faith – special circumstances

A New Tax System (Family Assistance) Act 1999 (Cth), ss. 3, 58, Schedule 1 clauses 3 and 13.

A New Tax System (Family Assistance) (Administration) Act 1999 (Cth), ss 3, 71, 94, 97 and 101

Social Security Act 1991 (Cth), ss 11(4), 13(1), 503, 1068, 1235, 1237A and 1237AAD

Student and Youth Assistance Act 1973 (Cth), s289

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

Re Beadle and Director-General of Social Security (1985) 7 ALD 670

Dranichnikov v Centrelink (2003) 75 ALD 134; [2003] FCAFC 133

Re Fuller and Secretary, Department of Family and Community Services (2004) 83 ALD 152; [2004] AATA 615

Groth v Secretary, Department of Social Security (1995) 40 ALD 541

Haggerty v Department of Education, Training and Youth Affairs (2000) 31 AAR 529; [2000] FCA 1287

Jordan v Secretary, Department of Family and Community Services (2004) 86 ALD 256; [2004] FCA 1582

Kertland v Secretary, Department of Family and Community Services (1999) 95 FCR 64

Kirkbright v Secretary, Department of Family and Community Services (2000) 106 FCR 281

Re Reardon and Secretary, Department of Family and Community Services (2002) 67 ALD 420; [2002] AATA 33

Ryde v Secretary, Department of Family and Community Services [2005] FCA 866

Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 152 ALR 127

Secretary, Department of Family and Community Services v Allan (2001) 116 FCR 1

Secretary, Department of Family and Community Services v Chamberlain (2002) 116 FCR 348

Re Stubbs and Secretary, Department of Family and Community Services [2003] AATA 729

REASONS FOR DECISION

30 October 2006 Ms LR Tovey, Member

1. This is an application by the Secretary, Department of Families, Community Services and Indigenous Affairs ("the Applicant") for a review of a decision of the Social Security Appeals Tribunal ("the SSAT") made on 24 October 2005. The decision related to an overpayment relating to rent assistance which had been made to Ms Amanda Foxley-Deschamps ("the Respondent") during the period 12 June 2003 to 17 May 2005 ("the Relevant Period"). The decision of the SSAT was to the effect that there was a debt but recovery of 100% of the debt would be waived. The decision of the SSAT was purportedly made under s 1237A of the Social Security Act 1991 (Cth). However, the Applicant contended that this section was not applicable to the debt which is the subject of this review.

BACKGROUND FACTS AND LEGISLATION

2.      The following facts are not in contention.

3.      On 6 June 2003 the Respondent completed a Centrelink application form entitled "Claim for Parenting Payment" (T3). In that form the Respondent indicated that "I live in a home that I (or my partner) own".

4. A parenting payment is a benefit provided for by Part 2.10 of the Social Security Act. One component of that payment may be rent assistance: ss. 503, 1068A-A1 and 1070A(b) of the Social Security Act. However, rent assistance will not be payable if the person entitled to the benefit is an "ineligible homeowner": s 1070C(b) of the Social Security Act. The Respondent's indication in the application form made it clear that she was an "ineligible homeowner" as that term is defined in ss 11(4) and 13(1) of the Social Security Act.  The Respondent's evidence was that she has continued to live in a house which she owned since that time. It follows that the Respondent was not entitled to rent assistance as a component of her parenting payment during the Relevant Period.

5.      There is evidence that the Respondent did receive a parenting payment (exhibit R1 and R2).  However, there is nothing before me to indicate that she received any rent assistance as a component of her parenting payment.

6.      Prior to her application for a parenting payment, the Respondent was in receipt of family assistance payments in the form of a family tax benefit (T4-T5).  There is no evidence that payments of family assistance received prior to the application for a parenting payment included any component for rent assistance.

7.      Family assistance payments are provided for by the A New Tax System (Family Assistance) Act 1999 (Cth) ("the Act"). Section 58(1) of the Act provides that the annual rate of family tax benefit is to be calculated in accordance with the Rate Calculator in Schedule 1 to the Act. Clause 3 of Schedule 1 to the Act provides that the rate of family tax benefit may include a component for the individual's rent assistance (if any). Under clause 13(1)(c) of Schedule 1 to the Act an individual is not entitled to the payment of rent assistance if the person is an "ineligible homeowner". The term "ineligible homeowner" is defined in s. 3 of the Act to have the same meaning as that term has in the Social Security Act.  It follows that the Respondent was also not entitled to rent assistance as a component of her family tax benefit.

8.      The records of the Applicant, which were tendered at the hearing, show that the Respondent did in fact receive rent assistant as a component of her family assistance payments during the Relevant Period in the amount of $4,098.11.  It appears that this resulted from an officer of the Applicant keying in the wrong code when entering data from the "Claim for Parenting Payment" form.

9.      The Respondent was sent and received a number of notices by the Applicant's delegate.  On 12 June 2003 the Respondent was sent a notice advising her of the rate of her family assistance payment which included a component for rent assistance (T6).  However, on 13 June 2003 a further notice was sent to the Respondent advising that her rent assistance had been cancelled because of a change in her marital status (T7).  I note that it is not clear why there was a reference to a change of marital status in this notice.  Further notices, which did not mention rent assistance, were sent on 16 and 17 June 2003 (T8 and T9).

10.     On 6 August 2003 a notice was sent to the Respondent which included a number of details in relation to the family assistance payments being made her.  It included reference to components for rent assistance (T12).  The Notice referred to a payment of rent assistance in arrears from 12 June to 24 July 2003, and regular payments of $90.72 thereafter.  Further notices, which referred to rent assistance, were sent to the Respondent on various occasions up to 22 March 2005.

11.     The error of the Applicant's delegate came to light when the Respondent telephoned Centrelink in March 2005 to inquire about her eligibility to receive rent assistance if her circumstances changed in the future.  At that time she was told she was already receiving rent assistance.  On 18 May 2005 a delegate of the Applicant decided to raise a debt and recover the overpayments.

12.     The Respondent sought review of that decision, which was confirmed on 14 July 2005 by an Authorised Review Officer ("ARO") of the Applicant.  In confirming that decision, the ARO referred to the provisions of the Social Security Act and the Social Security (Administration) Act 1999 (Cth) (T42).

13.     The Respondent then sought further review by the SSAT, which decided to set aside the decision under review and substitute a new decision that:

"… there is a debt but recovery of 100% of the debt is to be waived under section 1237A of the Social Security Act"

14. The SSAT concluded that the debt was attributable solely to administrative error by the Commonwealth. The SSAT also concluded that the Respondent did not know or have reason to know that she was receiving a payment to which she was not entitled during the relevant period and, on that basis, found that the Respondent received the overpayments in good faith. On that basis, the SSAT found the requirements for waiver in s 1237A of the Social Security Act to be satisfied.

15. Section 1237A of the Social Security Act relevantly provides:

"1237A(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).

1237A(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."

16.     On 11 November 2005 the Applicant sought a review by this Tribunal of the decision of the SSAT.  The application for review stated:

"The reasons for this application are the [SSAT] made an error of law in applying the provisions of the Social Security Act 1991. Rent Assistance was paid under the provisions of A New Tax System (Family Assistance) (Administration) Act 1999" ("the Administration Act").

THE ISSUES FOR DETERMINATION

17.     Against the above factual and statutory background, the issues for determination are:

(a)Is there a debt due to the Commonwealth by reason of the Respondent having received more family assistance payments than she was entitled to receive and, if so, what is the amount of that debt;

(b)What are the relevant statutory provisions dealing with whether any such debt can or should be waived; and

(c)Should any debt of the kind referred to in subparagraph (a) be waived?

Consideration of the Issues – Is there a Debt Due to the Commonwealth

18.     I accept the contention of the Applicant that the Respondent was paid rent assistance as a component of her family payment in the amount of $4,098.11 during the Relevant Period.  The evidence of the Respondent did not contest her receipt of those payments.

19. As I have noted above, the Respondent was at all material times an "ineligible homeowner" within the meaning of the Act, and so was not entitled to receive rent assistance as a component of her family assistance payment.

20. Section 71(2) of the Administration Act provides that:

"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."

21. The term "family assistance law" is defined in s 3 of the Administration Act to include the Act.

22. I am satisfied that the Respondent received family assistance in the amount of $4,098.11 more than she was entitled to receive under the Act, by reason of a component of rent assistance being included in the payments during the Relevant Period. Under s 71(2) of the Administration Act, that amount is a debt due to the Commonwealth.

23. I note that the reasons for the application quoted above identify the rent assistance as having been paid under the Administration Act. That is clearly not a correct statement of the position, as rent assistance was paid under the Act. However, that error does not affect the existence of the debt.

Consideration of the Issues – What are the Applicable Waiver Provisions

24.     It appears from the terms of their reasons that both the ARO and the SSAT treated the debt as arising from an overpayment of a parenting payment made under the Social Security Act, rather than an overpayment of family assistance under the Act. That is, the ARO and the SSAT treated the payment of rent assistance as being made by way of parenting payment rather than family assistance. On that basis, both the ARO and the SSAT considered whether the waiver provisions in the Social Security Act were applicable. 

25. The provision which the SSAT applied was s 1237A of the Social Security Act. That provision refers to the waiver of a "debt". I accept the submission of the Applicant that the term "debt", as it is used in s 1237A of the Social Security Act is defined in s 1235 of the Social Security Act to mean a debt recoverable by the Commonwealth under Part 5.2 of the Commonwealth Act or other legislation which is clearly not applicable here. The debt in this case is recoverable under s 71(2) of the Administration Act, and is not recoverable under Part 5.2 of the Social Security Act. It follows that s 1237A of the Social Security Act has no application to the present case.

26.     In my view, the applicable waiver provisions are those found in Part 4 Division 4 of the Administration Act.  There are, in my view, two provisions in that Division which are potentially applicable to the present case.  The first is section 97 of the Administration Act, which provides:

"(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."

27. Section 97(2) of the Administration Act is in similar terms to s 1237A of the Social Security Act. However, there is an additional requirement in s 97(2)(b) of the Administration Act which is not present in s 1237A of the Social Security Act.  That requirement is that the Respondent would suffer "severe financial hardship" if the debt were not waived.

28.     The second potentially applicable provision is s 101 of the Administration Act, which provides:

"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 the family assistance law; 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."

29. Section 94 of the Administration Act defines a "debt", as that term is used in ss 97 and 101 of the Act, to mean a debt under Division 2 of Part 4 of that Act. Section 71 of the Administration Act is included in Division 2 of Part 4, so that the present debt is a debt for the purposes of ss 97 and 101 of the Administration Act.

30.     I shall consider the application of each of ss 97 and 101 of the Administration Act in turn.

Consideration of the Issues – Whether the Debt should be Waived under Section 97 of the Administration Act

31. In this Tribunal the Applicant conceded that the whole of the debt was attributable solely to an administrative error made by the Commonwealth. In those circumstances s 97(1) of the Administration Act requires that the whole of the debt be waived if s 97(2) or s 97(3) apply to the debt.

32. The Applicant contended that neither s 97(2) nor s 97(3) applied to any part of the debt, so that the debt could not be waived under s 97 of the Administration Act. The Applicant contended that the Respondent did not receive in good faith the payments that gave rise to the debt, so that the requirements of s 97(2)(a) and 97(3)(c) of the Administration Act were not satisfied. Alternatively, the Applicant contended that the Respondent would not suffer severe financial hardship if the debt was not raised, so that the requirement of s 97(2)(a) of the Administration Act was not satisfied. A further alternative contention of the Applicant was that the requirements of s 97(3)(b) of the Administration Act were only satisfied in relation to the sum of $123.12 paid in the 2002/2003 tax year.

33. The Applicant's case as to the absence of good faith was framed on the basis that the Respondent knew, or had reason to know, that she was receiving rent assistance as part of her family tax benefit payment and further knew or had reason to know that she was not entitled to the payment of rent assistance. For reasons which I will explain, however, it was sufficient for the Applicant to establish the second of these matters in order to exclude the application of s 97(2) and 97(3) of the Act.

34.     The Respondent gave evidence to the effect that she knew she was a homeowner who was not paying rent and so was not entitled to rent assistance.  Her evidence was that she saw the reference to rent assistance in the notices sent to her, but thought that this was a standard part of the Centrelink form which did not apply to her.  She did not think that she was receiving rent assistance because she had told Centrelink that she was a homeowner and had not heard anything other than that.  The Respondent thought that the Centrelink letters were ambiguous and that ambiguity led her to think that the parts of the letters referring to rent assistance did not apply to her.

35.     I found the Respondent to be an honest and straightforward witness, and I accept her evidence in its entirety.  I find that the Respondent knew that she was not entitled to be paid rent assistance, but did not appreciate that she was receiving any component for rent assistance.  I also note that the Respondent's action in telephoning Centrelink to inquire about her possible future entitlement to rent assistance was inconsistent with her knowing that she was already receiving rent assistance to which she was not entitled.  I find that the Respondent acted with complete honesty at all times, and did not know that she was receiving any component of rent assistance from the Applicant.

36.     I also find that the assumption that she was not receiving rent assistance, and that the references to rent assistance on the Centrelink notices did not apply to her, were reasonable assumptions for a person in the position of the Respondent to make.  The Respondent had told Centrelink that she was a homeowner, and had never told Centrelink that she was renting.  The notice issued on 13 June 2003 (the day after the first notice referring to rent assistance) indicated that the Respondent's rent assistance had been cancelled.  None of the subsequent notices indicated that rent assistance was being paid in a manner that would be clear to a person who was not familiar with the form of Centrelink notices.  In a colloquial sense, the Respondent did receive the payments honestly and in good faith.

37.     Unfortunately for the Respondent, several decisions of the Federal Court are to the effect that a person who unknowingly receives a payment to which the person knows they are not entitled does not receive the payment in good faith for the purposes of provisions such as s 97(2)(a) and (3)(c) of the Administration Act. 

38.     In Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 152 ALR 127 the Federal Court was concerned with whether a debt arising from an overpayment of Austudy allowance should be waived. Mr Prince was aware that he was not entitled to continue to receive Austudy payments but, having taken steps to cancel the payments, was not aware that he was continuing to receive them. The question which arose under s 289(2)(b) of the Student and Youth Assistance Act 1973 (Cth) ("the SYA Act") was whether "the person received in good faith the payment or payments that gave rise to the debt".  Finn J said of the concept of "good faith" (at 152 ALR 130):

"The section asks that quite a specific question be addressed: was the payment received in good faith?  It is quite unconcerned, for example, with whether, after 22 December, Mr Prince acted in good faith towards DEETYA.  Its sole concern is with whether a particular state of affairs exists at the time a payment (or payments) is received …

The burden of the formula can vary significantly given the purpose it is intended to serve in a given setting. In one context it can focus inquiry upon a person's reason for action (eg as with the good faith duty of company directors); in another, to a person's state of knowledge when a particular event occurs.

For my own part, I consider the burden of the formula in the s 289 setting to be obvious enough. Its concern is with the state of mind of a person concerning his or her receipt of the payment: if that person knows or has reason to know that he or she is not entitled to a payment received -- ie is not entitled to use the moneys received as his or her own -- that person does not receive the payment in good faith. Absent such knowledge or reason to know, the receipt would be in good faith.

Given the conventional liability of a mistaken payee of money from consolidated revenue to repay that money irrespective of his or her belief as to an entitlement to it (ie the 'rule' in Auckland Harbour Board v R [1924] AC 318), the concession made to the mistaken payee by s 289 of the SYA Act does seem in all probability to be directed to a payee who receives the money (to put the matter positively) in the good faith belief that he or she is entitled to receive it. In other words the frame of the section is to exclude from the right to a waiver, a person who knows or has reason to know that he or she is not entitled to receive the payment. It would be surprising to find that the parliament intended otherwise."

39. Justice Finn concluded (at 152 ALR 131):

"… can a receipt be otherwise than in good faith when the recipient is unaware that the payment has been received? The short answer to that in my view is 'yes'. Knowing that, in the relevant period, he had no entitlement to receive an Austudy payment, he was never in a position to be able to assert that any mistaken payment made to him was one to which he had an entitlement. Thus while he may have received a payment of which he was ignorant, he could not, in the sense that I have explained, have received it in good faith."

40.     That decision of Finn J was applied by French J in Haggerty v Department of Education, Training and Youth Affairs (2000) 31 AAR 529 at 533-4; [2000] FCA 1287 at [13]. After referring to Prince, French J said of the requirement of good faith in the context of s 289 of the SYA Act (at 31 AAR 534, [2000] FCA 1287 at [16]):

Consistently with what his Honour said in the Prince case, want of good faith will arise where there is a positive belief that the payment has been made by mistake.  It will also arise where there is a suspicion held by the recipient that he or she may not be entitled to the payment made or a doubt as to the entitlement coupled with some objective basis for such suspicion or doubt.  The provision does not, however, authorise the imputation of want of good faith in any of the senses above described simply because there are in existence objective facts which would raise a belief or a doubt or a suspicion of non-entitlement in the mind of some imaginary recipient.  That proposition is quite consistent with the view that the existence of such facts may support an inference that the recipient disbelieved or doubted or was suspicious about his or her entitlement.  'Reason to know' as Finn J used that term in Prince does not necessarily import a criterion of imputed as distinct from actual want of good faith as I have described it.

41. The above decisions were applied in the context of s 1237A of the Social Security Act by Finn J in Jordan v Secretary, Department of Family and Community Services (2004) 86 ALD 256 at 261-62; [2004] FCA 1582 at [25]-[29]. In that case Mr Jordan had received two kinds of benefits, one of which should have been reduced due to receipt of the other. Mr Jordan was aware that he was not entitled to the full amount of both benefits, but did not appreciate that he was receiving both forms of benefit. Justice Finn upheld the decision of this Tribunal to the effect that the overpayment was not received in good faith.

42. I do not regard the terms of s 97(2)(a) or (3)(c) of the Administration Act to be materially distinguishable from those of s 1237A of the Social Security Act or s. 289(2) of the SYA Act.  I am therefore bound to apply these decisions and am required to conclude that, as the Respondent knew she was not entitled to rent assistance, she could not be said to receive the payments in good faith for the purposes of s 97(2)(a) and (3)(c) of the Administration Act.  This is so notwithstanding that the Respondent acted honestly at all times and did not know that she was receiving any component of rent assistance.

43.     Although I do not need to determine this question in light of my findings above, I would not be prepared to find that the Respondent would suffer "severe financial hardship" if the debt were not waived.  While I recognise that the Respondent is in constricted financial circumstances, she does have an income and, in my view, it would be possible for repayment of the debt to be arranged on terms which could avoid "severe financial hardship".  As this Tribunal noted in Re Stubbs and Secretary, Department of Family and Community Services [2003] AATA 729 at [20]:

"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."

44. I would also accept the submission of the Applicant as to the inapplicability of s 97(3)(b) of the Administration Act to all but the amount of the debt related to the $123.12 received by the Respondent in the 2002/2003 financial year.

45.     It follows that, for the above reasons, the debt is not able to be waived under s 97 of the Administration Act.

Consideration of the Issues - Whether the Debt should be Waived under Section 101 of the Administration Act

46.     It is then necessary to consider whether s 101 of the Administration Act provides a source of authority to waive the whole or part of the debt.

47.     It follows from the Applicant's concession that the debt arose wholly as a result of administrative error that the requirements of s 101(a) of the Administration Act are satisfied.  On the basis of that concession, and the evidence of the Respondent before this Tribunal, I am satisfied that the debt did not result wholly or partly from the Respondent or another person knowingly making a false statement or a false representation, or failing or omitting to comply with a provision of the family assistance law.

48.     I am also satisfied that, if s 101 of the Administration Act is otherwise applicable, it would be more appropriate to waive than to write off the debt or part of the debt.  The circumstances in which a debt may be written off are provided for by s 95 of the Administration Act, and in my opinion none of the criteria provided for in that section are satisfied in the present case.

49.     The critical issue is then whether the requirements of s 101(b) of the Administration Act are satisfied in this case.  Section 101(b) requires that I be satisfied that there are special circumstances (other than financial hardship alone) that make it desirable to waive the debt.

50.     The term "special circumstances" is not defined by the Administration Act, and the approach of the Tribunal and the Federal Court in a large number of cases has been to regard the matters to which the Tribunal may have regard when considering whether special circumstances exist as unconfined.  Although it dealt with a somewhat different provision to s 101 of the Administration Act, the following passage from the decision of this Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3 is often cited in this context:

"An expression such as 'special circumstances' is by its 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 on the context in which they occur.  For it is context which allows one to say that the circumstances of one case are markedly different from the usual run of cases.  That is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be regarded as special".

51.     The decision of the Tribunal in Beadle was affirmed by the Full Court of the Federal Court on appeal: (1985) 7 ALD 670. While the Court recognised that it was not possible to lay down precise rules as to what constituted special circumstances, the expression "unusual, uncommon or exceptional" was not, as Hill J noted in Dranichnikov v Centrelink (2003) 75 ALD 134; [2003] FCAFC 133 at [65], actually affirmed by the Full Court. I note that in Dranichnikov the Court was concerned with s 101 of the Administration Act

52.     In Secretary, Department of Family and Community Services v Allan (2001) 116 FCR 1 at [17] Heerey J said, in the context of the statutory predecessor to s 1184K of the Social Security Act:

"It is not sensible to lay down precise limits or precise rules about what may constitute special circumstances: Beadle v Director-General of Social Security 7 ALD 670 at 673; 60 ALR 225 at 228. Ill health financial circumstances and the unfairness of a strict application of the Act are some matters which may in an individual case, constitute special circumstances Kirkbright v Secretary, Department of Family and Community Services (2000) 106 FCR 281 at 284, 288; see also Kertland v Secretary, Department of Family and Community Services (1999) 95 FCR 64 at 71."

53.     Similarly, in Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545 Kiefel J said, in a passage she again adopted in Secretary, Department of Family and Community Services v Chamberlain (2002) 116 FCR 348 at [19]:

"The phrase “special circumstances”, it has been said, although imprecise is sufficiently understood not to require judicial gloss: Beadle's case (at ALR 229 ; ALD 674), 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."

54.     In Re Fuller and Secretary, Department of Family and Community Services (2004) 83 ALD 152; [2004] AATA 615 at [27] Downes J expressed the view that both hardship and unfairness can form the basis of exercising the discretion, in the context of s 1184K of the Social Security Act.

55.     The above comments reflect the approach that was taken in Ryde v Secretary, Department of Family and Community Services [2005] FCA 866 in the context of s 1237AAD of the Social Security Act, which is in materially the same terms as s 101 of the Administration Act.

56.     The only limitation apparent from s 101(b) of the Administration Act is that the special circumstances are not to be constituted by financial hardship alone.  That, of course, does not make financial hardship irrelevant if there are other factors which suggest that there are special circumstances.

57.     In some cases special circumstances can arise in whole or part from the manner in which the Applicant or the Applicant's delegates administer the relevant legislation.  This was the case in one of the decisions of this Tribunal to which I was referred by the Applicant, Re Reardon and Secretary, Department of Family and Community Services (2002) 67 ALD 420; [2002] AATA 33. In that case the Tribunal had regard, in the context of s 1237AAD of the Social Security Act, to the administrative error which caused the debt to arise when determining that there were special circumstances that made it desirable to waive half the debt.

58. I have reached the conclusion that all of the circumstances of this case combine to lead to the conclusion that there are special circumstances (other than financial hardship alone) that make it desirable to waive the whole of the debt. In my view this is a case which is out of the ordinary, where the strict application of the debt recovery provisions of the Act would occasion harshness and unfairness for the following reasons.

59.     Firstly, in my view it is significant that the Respondent properly informed the Applicant of her relevant circumstances, and reasonably assumed that she was not receiving rent assistance.  The fact that the debt was solely the result of administrative error by the Commonwealth is one of the factors which I take into account.

60.     Secondly, it was the Applicant's delegates who first incorrectly applied the provisions of the Social Security Act, rather than those of the Administration Act, to the issue of whether the debt should be waived.  The SSAT was led into the error, which appears to have prompted the application for review by this Tribunal, by the Applicant's reliance on the provisions of the Social Security Act rather than those of the Administration Act.

61.     The result of the SSAT decision was that the repayments of the debt, which the Respondent had been making to that point, were refunded to her.  If the debt were now to be reinstated, the Respondent would be subject to a longer period of deductions being made from her family assistance and social security payments than would be the case but for the decision of the SSAT.

62.     Thirdly, I accept the Respondent's evidence as to her current financial circumstances.  She told me that she works between 56 to 72 hours per fortnight and receives a gross salary of between $1,300 and $1,500 per fortnight.  She also receives a parenting payment in the range of $10-$60 per fortnight and a family tax benefit of around $200 per fortnight.  She lives with her seven year old son in a mortgaged house.  The payments on the mortgage are about $800 per fortnight.  The Respondent does not receive any financial support from her former husband. She has relatively substantial credit card debts.  She told me that after paying for essential items, she was left with about $60-$80 a week.  The Respondent is clearly in straightened financial circumstances.  While not of themselves capable of amounting to special circumstances (other than financial hardship alone), they are relevant in determining the impact on the Respondent of the administrative errors made by the Commonwealth and any requirement to repay, out of a limited weekly income, the overpayments which have resulted from that administrative error.

63.     Fourthly, I accept the Respondent's evidence as to the difficult family situation which she has faced in the past and is still facing.

64.     In assessing the matter, I recognise that the Respondent has had the benefit of the overpayment and refund.  However, it is understandable that a person in the Respondent's financial position would have spent some of that money, and to require repayment now would be to impose a significant additional strain on an already stretched budget.  In my view it is not fair to impose that requirement given the manner in which the debt arose and the manner in which the Applicant applied the incorrect legislation so as to lead the SSAT into error.

65.     For these reasons, it is appropriate that the whole of the debt be waived under s 101 of the Administration Act.

DECISION

66. Although I have taken a different route, I have arrived at the same outcome as the SSAT. The only difference is that I find the source of power to waive the debt in s 101 of the Administration Act, while the SSAT relied on s 1237A of the Social Security Act.

67. In those circumstances the Tribunal varies the decision of the Social Security Appeals Tribunal dated 24 October 2005 by deleting the reference to "under section 1237A of the Social Security Act" and otherwise affirms that decision.

I certify that the 67 preceding paragraphs are a true copy of the reasons for the decision herein of Ms LR Tovey, Member

Signed:         ................[Sgd S da Motta].........................
  Associate

Date/s of Hearing  10 July 2006
Date of Decision   30 October 2006
Representative for the Applicant       Self-Represented

Representative for the Respondent  Mr P Maishman

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