Gemma Barnes and Secretary, Department of Social Services
[2014] AATA 786
•24 October 2014
[2014] AATA 786
Division GENERAL ADMINISTRATIVE DIVISION File Number
2014/1727
Re
Gemma Barnes
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Mark Hyman, Member
Date 24 October 2014 Place Canberra The applicant did not meet her obligations to provide accurate information to Centrelink. An early portion of her debt is waived as solely due to administrative error. The remainder is neither written off nor waived.
..................[sgd]............................
Mark Hyman, Member
Catchwords
SOCIAL SECURITY – pensions and benefits – parenting payment – overpayment – debt recovery – whether debt should be written off – whether debt should be waived – decision under review set aside and substituted
Legislation
A New Tax System (Family Assistance) Act 1999, s 58, Division 4
Acts Interpretation Act 1901, ss 28A, 29
Administrative Appeals Tribunal Act 1975, s 37
Social Security Act 1991, ss 1068, 1223, 1236, 1237A, 1237AAD
Social Security (Administration) Act 1999, ss 68, 72, 100
Cases
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Brookes and Secretary, Department of education, Employment and Workplace Relations [2008] AATA 501
Fisher and Secretary, Department of Employment and Workplace Relations [2008] AATA 410
Gerhardt and Department of Employment, Education & Training [1996] AATA 173
Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484
Panacci and Secretary, Department of Employment and Workplace Relations [2008] AATA 30
Rosser and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2009] AATA 47
Secretary, Department of Families, Community Services and Indigenous Affairs and George [2007] AATA 1456
Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Walsh [2008] AATA 75
Secretary, Department of Social Security v Hales (1998) 82 FCR 154
Sekhon v Secretary, Department of Family and Community Services (2003) 132 FCR 126;
Waddell and Secretary, Department of Employment and Workplace Relations [2006] AATA 557
Ward and Secretary, Department of Family and Community Services [2000] AATA 212
REASONS FOR DECISION
Ms Gemma Barnes, the applicant, applied to Centrelink for parenting payment (partnered) (PPP). Ms Barnes has two young children. She received PPP from September 2010 to September 2013. At that point Centrelink determined that Ms Barnes had been overpaid up to April 2013 and raised a debt for the overpayment. Ms Barnes sought review of that decision. A Centrelink Authorised Review Officer (ARO) reviewed the decision, varied the amount of the debt and also waived part of it. Ms Barnes sought review of the ARO’s decision. The Social Security Appeals Tribunal (SSAT) reviewed the ARO’s decision and affirmed it. Ms Barnes has now sought review of the SSAT’s decision in this Tribunal.
The hearing
A hearing was held on 8 September 2014. Ms Barnes, who is self-represented, appeared by telephone. Ms Charlene Gerrard, a Centrelink advocate, represented the Secretary, assisted by Ms Julie Zhou. At the hearing the Secretary sought to refer to and make submissions with regard to legislative provisions that had not been made available to the applicant. For procedural fairness reasons I adjourned the hearing following opening submissions so that the material might be made available to Ms Barnes. At my direction, the Secretary made a written submission on the additional material, and Ms Barnes made a written submission in reply. Following receipt of those submissions, the hearing was resumed and completed on 17 September 2014.
Ms Barnes gave sworn oral evidence at the hearing. Documentary evidence comprised the documents submitted by the secretary under s 37 of the Administrative Appeals Tribunal Act 1975 (the ‘T-documents’ and supplementary T-documents); a copy of the comments and notes made by the Centrelink Customer Service officer (CSO) at the time Ms Barnes lodged her claim (Exhibit R1); Centrelink records relating to Ms Barnes’s contact with Centrelink at the time of her application for PPP (R2); and Centrelink records relating to family tax benefit eligibility for Ms Barnes and her partner (R3). At the hearing, Ms Barnes was asked questions about her expenditure on various goods and services; she provided replies at the time, but following the hearing asked if she could submit further evidence providing more accurate information about her usual expenditure in the areas covered by questioning. The Secretary suggested that the hearing should be reconvened to test this new evidence in cross-examination, but on my declining to follow that course, made a written submission on 25 September 2014 noting that some of the evidence was inconsistent with evidence given at the hearing, and as the material would not be tested under cross-examination I would need to consider what weight should be placed upon it. Ms Barnes supplied the additional material on 18 September 2014 and I will refer to it as Exhibit A1.
I have the benefit of submissions from both sides. The Secretary submitted the original statement of facts issues and contentions dated 30 July 2014, a supplementary submission following the first part of the hearing, dated 12 September 2014, and the submission dealing with the additional material from Ms Barnes, dated 25 September 2014. Ms Barnes provided her first submission dated 12 June 2014, her response to the Secretary’s second submission, dated 15 September 2014, and her covering submission to the evidence provided after the hearing, dated 18 September 2014.
The facts
The facts of the matter are largely uncontentious. The following is derived from the T-documents, supplementary T-documents and exhibits. Ms Barnes contacted Centrelink on 23 August 2010 in relation to a claim for PPP (R1). She was sent a ‘MOD-P’ form, which seeks information about the income of an applicant’s partner. Ms Barnes’s partner completed and signed the form on 17 September 2010 and returned it to Centrelink on 20 September 2010 (ST3). At question 31 of the form he answered ‘no’ to the question ‘Do you currently receive any income from work other than self-employment?’ but proceeded under the same question to give details of his employment. He reported a gross fortnightly income of $1484.28, and stated that this was his usual wage.
Centrelink granted PPP to Ms Barnes, and on 20 September 2010 sent her a letter advising her of her payments and other details (T5). The letter advised that she would receive $90.64 for the period 23 August to 8 September; $378.05 for the period 9 September to 22 September; and regular payments of $382.00 from 8 October 2010. The letter also stated that the calculation of these amounts had been based on a fortnightly income for her partner of $0, an annual income for him of $0 and an income for herself, both fortnightly and annual, of $0.
The letter also included a statement of Ms Barnes’s obligations to keep Centrelink informed of various matters within 14 days of their occurrence. That part of the letter stated that it was a notice under social security law, and among the information required to be notified was if she or her partner changed jobs or started work, and if her partner’s income went above $800.
A further letter was sent on 17 November 2010 (T6). It also included a statement that the letter was a notice under social security law. The notice provided information about Ms Barnes’s partner’s earnings and gave $1,484.28 as the amount earned between 23 August and 8 September 2010. The letter included similar requests for information to those in the letter of 20 September.
Centrelink sent further information notices to Ms Barnes on 23 February 2011 (T7), 18 May 2011 (T8), 10 August 2011 (T9), 2 November 2011 (T10), 25 January 2012 (T11), and 18 April 2012 (T12).
Centrelink sent an employment declaration form to Ms Barnes’s partner’s employer on 29 October 2013, seeking employment details for him from 9 September 2010 to 14 April 2013. The employer completed the form on 7 November 2013 and returned it to Centrelink (T13), with work and pay records attached.
Centrelink then recalculated Ms Barnes’s entitlements. This seems to have been done more than once, and for different periods and with slightly different results. The debt as calculated at T14, T17 and T18 is variously for the period from 9 September 2010 to 17 April (T17, T18) or to 5 May 2013 (T14) and the debt varied from $28,274.97 (T14), $28,285.54 (T18) and $28,607.46 (T17). The calculations also provided different amounts for amounts paid and entitlements over that period.
A debt was raised for $28,393.87 on 13 November (T20), with the annotation that Ms Barnes’s partner’s income from 9 September 2010 to 5 May 2013 had been declared as $0 but was in fact $117,460.61. Centrelink wrote to Ms Barnes on the same day advising her of a debt for the overpayment (T15). The letter noted that that the overpayment needed to be repaid because the income of Ms Barnes’s partner had not been taken into account.
Ms Barnes sought review by an ARO. The ARO identified an error in the debt calculations and reduced the debt to $28,300.11 (T19). The ARO also waived an initial portion of the debt, amounting to $417.23, which was the amount arising up to 22 September 2010. Ms Barnes sought review by the SSAT. That Tribunal affirmed the ARO’s decision (T2), and Ms Barnes has now appealed to this Tribunal.
ISSUES
Ms Barnes does not contest the debt raised by Centrelink, but argues that it should be waived. The only issue before me is:
a)whether the applicant’s debt should be waived or written off.
The legislative context
The relevant legislation is the Social Security Act 1991 (the Act), the Social Security (Administration) Act 1999 (the Administration Act) and A New Tax System (Family Assistance) Act 1999 (the FA Act).
Section 1223 of the Act provides for the raising of debts as a result of various causes including overpayments. Subsection (1) provides that if a person receives a payment that they are not entitled to, the payment is a debt due to the Commonwealth. Subsection (9) states that a social security payment, for the purposes of the section, includes part of a social security payment.
There are two pathways by which debts are not recovered. Section 1236 provides for debts to be written off if specified circumstances are met. Written off debts may subsequently be pursued and recovered. Other sections provide for debts to be waived. The Commonwealth is precluded from recovering debts that have been waived. For present purposes, the provisions that are relevant are ss 1237A and 1237AAD.
Section 1237A provides as follows, so far as is relevant:
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.
…
(3) For the purposes of this section, a proportion of a debt may be 100% of the debt.
Section 1237AAD allows the Secretary to waive a debt if the debtor did not knowingly make a false statement or knowingly fail to comply with the Act or the Administration Act, and there are ‘special circumstances’ that make it desirable to waive the debt.
The Administration Act provides for the general administration of the social security law. Section 68 allows the Secretary to issue information notices requiring those who receive benefits to provide information on changes in their circumstances. Section 72 states that the notice must specify a time by which information is to be provided, and must also state that the notice is an information notice under the social security law.
Ms Barnes‘s central argument is that she kept Centrelink informed of her partner’s income through regular updates for other purposes, notably child care benefit (CCB) and family tax benefit (FTB). To examine the application of those claims, reference needs to be made to the rate calculator for PPP in s 1068B of the Act and the rate calculation methodologies for FTB and CCB in s 58 and Division 4 respectively of the FA Act.
The applicant’s evidence
Ms Barnes said in her oral evidence that she had begun by giving Centrelink the relevant information about her partner’s income. He had completed the form accurately, and she had relied on that information being used by Centrelink. There had been no requirement to report regularly to Centrelink, and she did not know why as she was used to arrangements where if you did not report you would not receive the payments.
In country areas [where she lives] letters do not always arrive. Ms Barnes did not recall seeing in information notices that her partner’s income had been listed as zero, nor that she had to advise Centrelink if his fortnightly income rose above $800. She did remember that towards the end of the period she saw that if her partner’s income were to change she should report it. Ms Barnes had been under the impression that if their combined annual income were less than $42,000 there would be no effect on benefits. She did not think that small changes in income of the order of $20 per fortnight needed to be reported. In cross-examination, Ms Barnes said that she read Centrelink letters when they arrived, but she did not recall any particular letter, or the particular information in any given letter. If she had seen something out of order in one of the letters she would have told Centrelink.
Ms Barnes said that her partner had received FTB and CCB and acknowledged that she had not checked specifically whether Centrelink had drawn on his FTB estimates to correlate with her PPP payments. She had not reported to Centrelink for him and he had not done so for her. Ms Barnes was not sure when estimates of income for CCB had been provided. In her case, she thought it was when her children started childcare, perhaps in March 2011. Her partner’s CCB dated back to before she had begun receiving PPP, when his child had moved in. She had not reported in respect of the shared percentages of childcare; her partner has done that online. For PPP she had relied on the first interview and the information provided at that time.
Ms Barnes said that she had separated from her partner in April 2013, reunited with him in August 2013, but then separated from him permanently in November 2013.
With regard to her current circumstances, Ms Barnes said under cross-examination that she was receiving parenting payment (single) (PPS) from which $118 was withheld each fortnight, leaving a fortnightly payment of $612.40. She was also receiving FTB on an instalment basis, at $469.28 per fortnight, giving a total payment of $1081.68. That was her total income, and to manage on it was quite difficult. Her former partner paid child support by paying her car loan, but provided no other support. She had a GE credit loan, the value of which she was unsure of, but towards which she paid $90 per month. She had no other loans or debts.
Ms Barnes said that she had to support her two children on the income she received. They were in her care, and went to their father only every second weekend. She receives CCB, which allows the children to go to preschool, where she pays less than the full charge, paying $12 and $6 weekly for the children but contributing also $2 each week for the bus and providing their food. Ms Barnes said she does not pay rent, as she lives 30 km out of town on her parents’ farm, where she lives alone with the two children. She helps out on the farm to cover rent and utilities, to which she does not contribute. Her other major expenses include phone and internet, which cost her $47 and $67 each month respectively, and fuel for her car, which costs about $200 each month because she lives so far out of town. Otherwise, food, groceries more generally, clothing, and the things needed to raise two children are major areas of expense. Food costs about $300 each fortnight or maybe $400-500 if she does a ‘big shop’. The children’s excursions also cost something from time to time. Ms Barnes said she has no significant health issues herself at present, and the children are also healthy apart from occasional ear problems which require them to visit a regional centre.
Following the hearing, as noted earlier, Ms Barnes submitted further information. This proved to be more detailed and in some cases different. Her explanation for providing this additional information was that in the hearing she had been ‘put on the spot’ and had ‘left information out’. The information provided lists a monthly budget for August 2014, comprising $883 at Woolworths and $84.48 at Crisco; $215 for diesel; $200 for new shoes, clothes and school expenses for the children; $47 for phone and $67 for internet; $300 to her former partner for a car loan; $90 to the GE credit line; and $84 for the children’s preschool in July. In addition, Ms Barnes stated that in most fortnights she must borrow from the family, and that she owes her sister $925.69 for car registration, and her parents $600 for new tyres and a pink slip to register the car. I consider this evidence and the points of inconsistency below.
The applicant’s argument
Ms Barnes has not contested that she was overpaid PPP, or the raising of the debt in consequence. Rather she argued that she did everything that was expected of her and should not be held responsible for Centrelink’s errors. As a result, the debt should be waived for sole administrative error. In the alternative it should be waived for special circumstances.
Ms Barnes asserted that she had supplied Centrelink with information about her partner’s income at the outset. Her partner’s income changed very little fortnight by fortnight, and there had been no requirement to report on a fortnightly basis. She reported each financial year for FTB purposes, and went into Centrelink for other purposes as well, such as reporting for CCB purposes. Centrelink knew about her partner’s income in any case, as he was receiving FTB in respect of his own child. The letters Centrelink sent asked for information if income changed. She knew that her partner’s income had not changed significantly since she first advised Centrelink of it in September 2010. In the end it was she who had contacted Centrelink to ask why her PPP had been reduced, and it was only then that the debt had been raised. If she had not taken that action the debt would not have been raised. The debt arose from actions that were not her fault but rather Centrelink’s mistakes.
Ms Barnes’s argument for the waiving of the debt due to special circumstances rests on the combination of error by Centrelink together with her financial hardship. In her contention, the two together constitute ‘special circumstances’ under s 1237AAD of the Act.
The respondent’s argument
The Secretary contended that Ms Barnes’s rate of PPP had been overpaid once her partner’s income had been taken into account. The overpayment can be recovered under s 1223(1) of the Act.
The debt should not be written off under s 1236 of the Act. The ongoing deductions from Ms Barnes’s PPS illustrate that she has the capacity to repay the debt and so cannot claim an incapacity to do so.
The debt should not be waived under s 1237A of the Act. The Secretary acknowledged that there had been administrative error by Centrelink at the time Ms Barnes first lodged her claim, up to 22 September 2010. That part of the debt has already been waived. The Secretary contended that there was no sole administrative error by Centrelink after that date. The information notices sent out by Centrelink obliged Ms Barnes to advise of any changes in circumstances, and the notice of 20 September 2010 in particular required Ms Barnes to inform Centrelink if her partner’s income was above $800 per fortnight. Ms Barnes claims not to have received all of the notices, but acknowledged receiving some and in any case they are deemed to have been received: ss 28A and 29 of the Acts Interpretation Act 1901. She did not respond to the notices and so the error was shared by Centrelink and Ms Barnes, and not solely attributable to Centrelink.
As for the reporting for other purposes, in the first place Centrelink has no record of actual updating of income through Ms Barnes or her partner coming into a Centrelink office, despite Ms Barnes’s claim to have done so. Any calculation of FTB or CCB would thus have been done on the basis of online advice or indexed figures.
Further, the Secretary contended that FTB and PPP are calculated on quite different bases: the methodology for calculating PPP takes into account income that is a partner’s ‘ordinary income’, as defined in the Act; FTB and CCB use methodologies that take into account a partner’s ‘adjustable taxable income’ as defined in the FA Act. One reported figure cannot be used for calculating the other benefit.
The Secretary submitted that Ms Barnes had reason to know that the information about her partner’s income was incorrect, as the notices said that the basis for calculating the payment was that her partner’s income was zero. As she had reason to know but took no action, she had turned a blind eye to circumstances and therefore had not received the payments in good faith.
The Secretary also argued that the debt should not be waived under s 1237AAD. Ms Barnes’s circumstances were not so different from the usual run of cases to warrant the description ‘special circumstances’.
CONSIDERATION
The raising of the debt was not contested. I am satisfied that there was an overpayment because Ms Barnes’s partner’s income was not taken into account; that the overpayment could be retrospectively reduced under s 100 of the Administration Act; and that the amount of the overpayment was a debt due to the Commonwealth under s 1223(1) of the Act. The issue for determination is whether the debt should be written off or waived.
Should the debt be written off?
Section 1236 of the Act allows a debt to be written off where, in accordance with specified circumstances, it is not in the interest of the Commonwealth to recover it. Of the circumstances listed in subsection (1A), that potentially relevant to the present matter is paragraph (b), where the debtor has no capacity to repay the debt. Subsection (1C) provides that where a debt may be recovered by deduction from a social security payment, the debtor is taken to lack the capacity to repay the debt only where repayment would result in the debtor being in ‘severe financial hardship’.
Ms Barnes is currently repaying the debt at the rate of $118.90 per fortnight through deductions made from her PPS payment. She is therefore taken to have the capacity to repay the debt unless those payments are putting her in severe financial hardship. The phrase ‘severe financial hardship’ is not defined in the Act for this purpose (there is a definition in s 19B but its application is limited to other provisions). Ms Barnes’s circumstances are straitened, but on the basis of her evidence, I do not believe that she can be said to be in severe financial hardship, given that she also receives FTB in instalments, and I so find. The debt should not be written off.
Should the debt be waived due to sole administrative error by Centrelink?
Under s 1237A, the Secretary must waive a debt or proportion of a debt that results solely from an administrative error by Centrelink, provided the payment has been received in good faith, and the debt was raised more than six weeks after the first payment giving rise to the debt. It is not contested that Centrelink made an error in not recording accurately the income earned by Ms Barnes’s partner, nor that there was more than six weeks before the debt was raised. The two questions to be answered are first whether that error was the sole administrative error giving rise to all or some proportion of the debt; and second, whether Ms Barnes received the payments in good faith.
The Secretary accepts that until 22 September 2010, it was Centrelink’s error alone that caused that part of the debt (which was waived by the ARO). From that time, the Secretary contends, Ms Barnes contributed to the debt by not providing information in response to Centrelink’s information notices. Ms Barnes contends that she provided the correct information at the outset and that information was updated for FTB and CCB purposes.
The case law is clear that a ‘sole’ administrative error means that there is no contribution to the error by the recipient of the benefit: see e.g. Sekhon v Secretary, Department of Family and Community Services (2003) 132 FCR 126; Re Gerhardt and Department of Employment, Education & Training [1996] AATA 173; Re Ward and Secretary, Department of Family and Community Services [2000] AATA 212.
As for the information provided in connection with FTB and CCB, I note that Centrelink has no record of face to face contact at Centrelink offices by Ms Barnes, nor by her partner. Centrelink records suggest that FTB was calculated using indexed income levels (this can be done because of reconciliation of payments through the tax system). The Secretary has provided extensive submissions arguing that the different nature of the rate calculations for PPP on the one hand and FTB and CCB on the other means that the income figures used to calculate one benefit cannot be used to calculate the other, and therefore the provision of information for FTB and CCB cannot be regarded as information for updating Centrelink on income for PPP purposes. This argument, I think, misses the real point: Centrelink records relating to PPP suggested that Ms Barnes’s partner had a zero income: therefore any income figure greater than zero reported for him, for whatever purpose, might arguably have put Centrelink on notice that its PPP income figure for him was mistaken, whether or not that reported income could be used for calculating what her rate of PPP ought to be. Inquiries made directly of Ms Barnes would then have brought the overpayment to light.
So, on that reasoning, was Centrelink fixed with the knowledge that Ms Barnes’s partner had an income above zero? Was it always the case that Centrelink held this information but failed to make use of it, and that therefore Ms Barnes made no contribution to the error?
I do not think that argument can be sustained. Sole administrative error does not require that Centrelink made no mistakes, but that the debtor made no contribution to the error. When Centrelink sent out an information notice on 20 September 2010, it included a requirement that Ms Barnes advise when her partner’s income went above $800 per fortnight, a figure it was already above. Ms Barnes does not remember reading that, and she suggests that not all letters arrive at a country address. Further, she suggests that she was under the impression that if her partner’s income stayed below $42,000 annually her benefit would be unaffected. I do not accept Ms Barnes’s explanation. The figure of $42,000 has no obvious source, and that Ms Barnes mistakenly believed it to be the figure at which the benefit would be affected has no bearing on my decision. Letters do go astray from time to time, but rarely, and surely not all the letters from Centrelink did so. As the respondent points out, under ss 28A and 29 of the Acts Interpretation Act 1901, Ms Barnes is taken to have received them. Ms Barnes seems to have treated the information notices, whether she did not read them, read them cursorily or read then carefully, with blithe disregard. After Centrelink began to send them out in September 2010 Ms Barnes became a contributor to the error.
Nor does the provision of information in regard to FTB and CCB somehow have the effect of transferring the onus back to Centrelink, so that the error once again became theirs alone. There are a number of cases where this issue has been considered, including cases where PPP was being paid but the rate was not updated to take account of information reported for FTB purposes. In Brookes and Secretary, Department of education, Employment and Workplace Relations [2008] AATA 501 the Tribunal decided that an FTB estimate could not be relied on the meet information obligations for PPP. In Fisher and Secretary, Department of Employment and Workplace Relations [2008] AATA 410 the Tribunal reached the same conclusion in similar circumstances. In Rosser and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2009] AATA 47 and Secretary, Department of Families, Community Services and Indigenous Affairs and George [2007] AATA 1456 the social security benefit in question was not PPP, but similar reasoning was applied to arrive at a similar conclusion. Two cases that went against this trend are Waddell and Secretary, Department of Employment and Workplace Relations [2006] AATA 557 and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Walsh [2008] AATA 75. In those cases the Tribunal found that a debt should be waived, because the recipient of the benefit in those cases had made a conscientious effort to keep Centrelink informed.
Ms Barnes’s argument treats the receipt of Centrelink benefits as a form of ‘set and forget’ arrangements in which the onus of calculating and delivering benefits was entirely on Centrelink’s shoulders. That is not how the social security system operates: it is a system of mutual entitlements and obligations. A person may establish that they have entitlements, but the entitlements come with obligations, central among which is the obligation to keep Centrelink informed. Ms Barnes did not do so – indeed she seems to have made no effort at all to do so – and the overpayment is the result of that inactivity.
I find therefore that the error was not the sole administrative error of Centrelink from the time of the first information notice. That notice was sent out on 20 September 2010 and it required Ms Barnes to inform Centrelink within 14 days of the various matters detailed. Ms Barnes defaulted on that obligation when those 14 days were past, that is on 4 October 2010. Under s 100 of the Administration Act, the matter she was obliged to tell Centrelink about – her partner’s income – would then have been applied to the calculation of the payment not from the time it was notified but from the time it was relevant, that is from the start of the payment of PPP. But s 1027A of the Act requires that the decision-maker must waive the proportion of the debt that arose from Centrelink’s administrative error alone. That error continued up to the time of Ms Barnes’s default, and the debt should be waived up to 4 October 2010.
The debt may only be waived if the payments were received in good faith. The case law on that question has adopted a broad understanding of what forms of behaviour fail that test. In particular, in Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484 the Federal Court held that turning a blind eye to circumstances that would have aroused doubt in a reasonable person was not in good faith; and in Panacci and Secretary, Department of Employment and Workplace Relations [2008] AATA 30 the Tribunal found that a debtor who had shown no curiosity or made any enquiry about a high rate of payment over an extended period had not received that payment in good faith. In this instance, a question could be raised about whether Ms Barnes received the payment in good faith by that test over the long period to April 2013, but I do not believe there is any evidence that she did not receive the payment in good faith at the outset, given that she had only recently provided accurate information to allow the benefit to be calculated.
The debt should be waived under s1237A up to 4 October 2010 but not beyond that date.
Should the debt be waived due to special circumstances?
Under s 1237AAD of the Act, a debt may be waived where three conditions are met: the debtor has received it without knowingly making a false representation or failing to comply with the Act or the Administration Act; there are special circumstances other than financial hardship alone; and the debt should be waived rather than written off (a written off debt may subsequently recovered; a debt that is waived may not be).
I do not regard Ms Barnes as having knowingly contributed to the overpayment. There is no evidence of a misrepresentation, and her attitude to the requirement to report to Centrelink seems to have been ignorance or disregard rather than knowing non-compliance.
Ms Barnes’s argument for waiving the debt under this provision is that the combination of her straitened financial circumstances and Centrelink’s errors amounts to special circumstances. The Act does not define ‘special circumstances’ but there is ample case law on the subject. The provision is there to allow the Secretary to take account of people’s particular circumstances in a flexible way, and avoid harsh and unfair outcomes; financial hardship is neither necessary nor sufficient by itself, but will be usually present (Secretary, Department of Social Security v Hales (1998) 82 FCR 154 (French J)). To qualify as special, the debtor’s circumstances must have something about them that differentiates them from the usual run of cases (Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25 and references cited therein). Both error and financial hardship can contribute to a finding that special circumstances obtain in a particular case, but together they must have something about them that takes them out of the usual, and they must, taken together, allow the decision-maker to conclude that an exception should be made to the general rule that people who have received more than they were entitled to should have to repay it.
The additional evidence that Ms Barnes provided after the hearing, material that, as the respondent noted, was not tested in cross-examination, provides a darker picture of Ms Barnes’s circumstances. Differences between the sworn evidence at the hearing and this later evidence include:
a)Ms Barnes says that she borrows from family most fortnights;
b)she has outstanding loans from family members when at the hearing Ms Barnes stated that she had no loans other than those she described;
c)she is paying off her car loan to her former partner, when at the hearing she said that her former partner was supporting her by paying the loan off; and
d)in a number of areas, such as at the supermarket, and in respect of childcare costs (which were for July) Ms Barnes reported a higher level of spending than at the hearing.
I can accept that people may have only an approximate idea of how much they are spending on routine items such as groceries, and that by examining dockets and records they may be able later to produce a more exact figure. It is not the same when the later evidence shows a direct inconsistency with the sworn evidence given at the hearing. It may be that Ms Barnes overlooked the loans from her sister and parents, but she presented the facts about the car loan in quite different ways in the two circumstances. Inevitably, I must prefer the sworn evidence given at the hearing, in the face of such inconsistency.
In the end, the weight I put on the later evidence is not decisive. On any reading of the evidence, I cannot reach the conclusion that Ms Barnes should receive the benefit of the special circumstances waiver. Ms Barnes is in difficult but not impossible circumstances financially; she is repaying the debt at a moderate rate and coping with that situation, even if with difficulty. The error by Centrelink may have contributed to her problems, but as noted above, social security benefits do not come on the basis that those receiving them can assume that all is well without making sure that the benefits and the rate at which they are paid are based on correct information. Ms Barnes made a contribution to the error. I find that Ms Barnes’s circumstances are not special circumstances for the purposes of s 1237AAD and the debt should not be waived under that section.
Conclusion
Ms Barnes has found herself confronted with a debt that she feels, I am sure quite sincerely, was not of her making. But that reflects a misunderstanding of the system she relies on to support her. That system requires cooperation between Centrelink and those who receive benefits through it, to ensure that benefits are calculated and paid on the basis of accurate, complete and up-to-date information.
DECISION
The decision under review is varied as follows:
a)that part of the applicant’s debt arising up to 4 October 2010 is waived;
b)the remainder of the debt is neither written off nor waived; and
c)the matter is remitted to the respondent for recalculation of the debt on the basis of a) and b) above.
I certify that the preceding 60 (sixty) paragraphs are a true copy of the reasons for the decision herein of Mark Hyman, Member. .......................[sgd].................................................
Associate: Sarah Wardell
24 October 2014
Date(s) of hearing 8 & 17 September 2014 Date final submissions received 26 September 2014 Applicant In person Advocate for the Respondent Charlene Gerrard Solicitors for the Respondent Department of Human Services
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