Gilmartin; Secretary, Department of Social Services and (Social services second review) - [2022] AATA 723

Gilmartin; Secretary, Department of Social Services and (Social services second review) [2022] AATA 723 (11 April 2022)
Division:GENERAL DIVISION
File Number:2021/3626
Re:Secretary, Department of Social Services
APPLICANT

Vicki GilmartinAnd
RESPONDENT

DECISION
Tribunal:Member D Mitchell
Date:11 April 2022
Place:Brisbane

The Tribunal sets aside the decision under review and substitutes a decision that:
(a)the Respondent became a member of a couple on 6 February 2010; and
(b)the Respondent has the following FTB debts to the Commonwealth:
(i)for the 2009/2010 financial year as recalculated in consideration that the Respondent was a member of a couple from 6 February 2010;
(ii)a debt of $11,687.02 for the 2010/2011 financial year;
(iii)a debt of $11,887.34 for the 2011/2012 financial year;
(iv)a debt of $14,745.71 for the 2012/2013 financial year;
(v)a debt of $11,548.60 for the 2013/2014 financial year;
(vi)a debt of $10,407.02 for the 2014/2015 financial year;
(vii)a debt of $5,505.04 for the 2015/2016 financial year;
(viii)a debt of $1,030.20 for the 2016/2017 financial year; and

(c)the FTB debts are recoverable in full.

..........................[SGD].......................................
Member D Mitchell

CATCHWORDS
SOCIAL SECURITY – Family Tax Benefit – overpayment – administrative error – where no sole administrative error – where no special circumstances – decision under review set aside and substituted
LEGISLATION
A New Tax System (Family Assistance) Act 1999 (Cth)
A New Tax System (Family Assistance) (Administration) Act 1999 (Cth)
CASES

Atkinson and Secretary, Department of Social Services [2017] AATA 1963
Boscolo v Secretary, Dept of Social Security[1999] FCA 106; (1999) 90 FCR 531
Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114
Dranichnikov v Centrelink [2003] FCAFC 133
Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541
Kazmierczak v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs[2010] FCA 1084
Re Anderson and Secretary, Department of Families and Community Services (2002) 69 ALD 494
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Callaghan and Secretary, Department of Social Security (1996-97) 45 ALD 435
Re Ivovic and Director-General of Social Services (1981) 3 ALN N95; [1981] AATA 57
Salsone and Secretary, Department of Family and Community Services [2002] AATA 1117
Secretary, Department of Family and Community Services and Jonauskas [2001] AATA 72
Secretary, Department of Social Security v Hales [1998] FCA 219
Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267; [2012] FCA 639
Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190; (2003) 76 ALD 105
Tubic and Secretary, Department of Families, Community Services and Indigenous Affairs [2007] AATA 13
REASONS FOR DECISION
Member D Mitchell
11 April 2022
INTRODUCTION

The decision under review is the decision of the Social Services and Child Support Division (SSCSD) of the Administrative Appeals Tribunal dated 23 April 2021.[1] On that date, the SSCSD varied the decision made on behalf of the Secretary, Department of Social Services (the Applicant) to raise and recover the following family tax benefit (FTB) debts from
[1] Exhibit 1, T Documents, T2, pages 4-10, Decision of the SSCSD.

Ms Vicki Gilmartin (the Respondent):[2]
[2] Exhibit 1, T Documents, T2, pages 4-10, Decision of the SSCSD.
(a)a debt of $3,293.03 for the 2009/2010 financial year;
(b)a debt of $11,687.02 for the 2010/2011 financial year;
(c)a debt of $11,887.34 for the 2011/2012 financial year;
(d)a debt of $14,745.71 for the 2012/2013 financial year;
(e)a debt of $11,548.60 for the 2013/2014 financial year;
(f)a debt of $10,407.02 for the 2014/2015 financial year;
(g)a debt of $5,505.04 for the 2015/2016 financial year; and
(h)a debt of $1,030.20 for the 2016/2017 financial year.
The SSCSD varied the decision under review such that with regard to the FTB debt in relation to the:[3]
(a)2009/2010 financial year, the Respondent had a recoverable debt to the Commonwealth, with the amount of this debt to be recalculated by the Applicant on the basis that the Respondent became a member of a couple on 6 February 2010;
(b)2010/2011 financial year, the Respondent had a recoverable debt to the Commonwealth, with the portion of that debt from 8 September 2010 onwards was waived with effect from 23 November 2020 pursuant to section 97(3) of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (the FA Administration Act); and
(c)2011/2012 through to 2016/2017 financial year, the Respondent’s recoverable debt is waived with effect from 23 November 2020 pursuant to section 97(3) of the FA Administration Act.
[3] Exhibit 1, T Documents, T2, page 4, Decision of the SSCSD.
The Applicant sought review of that decision by this Tribunal, by way of an application dated

25 May 2021.[4]
[4] Exhibit 1, T Documents, T1, pages 1-3, Application for Review.
BACKGROUND
The Respondent first received FTB in January 1997.[5]
[5] Exhibit 2, Secretary’s Statement of Facts & Contentions, Attachment A, Respondent’s historical Payment Summary mainframe screen.
Throughout the 2009/2010 to 2016/2017 financial years, the Respondent received FTB as a single person. Her rate of FTB was calculated based solely off her adjusted taxable income.[6]
[6] Exhibit 1, T Document, T5, pages 139-258, ADEX Debt Explanation and Debt Information.
On 29 June 2009, the Applicant issued the Respondent with a letter, amongst other things, advising her that she was required to notify Centrelink if she became, or ceased to be a member of a couple and whether there were any changes to her or her partner’s income.[7]
[7]
Further letters advising the Respondent of the requirement to advise Centrelink of any changes to her member of a couple status and that her FTB was being paid to her on the basis of a combined income amount of $49,000 were sent by the Applicant on 9 July 2009, 5 September 2009, 16 December 2009, 23 February 2010 and 26 February 2010.[8]
[8] Exhibit 1, T Documents, T14, pages 2211, 2214, 2219, 2223, 2226, 2231, Archived display summary and correspondence for the period 29 June 2009 – 21 July 2014.
On 12 March 2010, the Respondent married Mr Patrick Gilmartin.[9]
[9] Exhibit 1, T Documents, T2, page 5, Decision of SSCSD.
Further letters providing the same advice in relation to the Respondent’s member of a couple status and combined income amount were sent to the Respondent by the Applicant on 16 March 2010, 4 May 2010, 2 June 2010, 7 July 2010, 2 August 2010 and

6 September 2010, noting that her combined income amount increased to $51,450 from

7 July 2010.[10]
[10] Exhibit 1, T Documents, T14, pages 2236, 2243, 2254, 2273, 2276, 2281, Archived display summary and correspondence for the period 29 June 2009 – 21 July 2014.
On 8 September 2010, the Respondent attended the Beenleigh Centrelink office[11] and as a result, her legal name was changed to Mrs Vicki Gilmartin in the Applicant’s internal records[12] and her income estimate for FTB purpose was updated to $45,000.[13] While the Respondent’s surname was changed on the internal Centrelink record on that date, her partnered status was not amended and she continued to be paid FTB on the basis that she was single.[14]
[11]    Exhibit 2, Secretary’s Statement of Facts & Contentions, Attachment C, Mainframe record activity screen for activity code 1177.
[12]    Exhibit 2, Secretary’s Statement of Facts & Contentions, Attachment B, Respondent’s Customer Personal Details summary mainframe screen.
[13]
[14]    Exhibit 2, Secretary’s Statement of Facts & Contentions, page 3, paragraph 10.
Between October 2010 and August 2016, the Applicant issued to the Respondent more than 90 notices regarding her FTB entitlement.[15]
[15] Exhibit 2, Secretary’s Statement of Facts & Contentions, Attachment D, Notices provided to the Respondent from Centrelink.
On 7 September 2016, the Respondent’s FTB was cancelled on the basis that she no longer had a FTB child and was not qualified for the payment.[16]
[16] Exhibit 1, T Documents, T15, page 2739, Correspondence for the period 29 April 2011 - 18 February 2021.
On 4 November 2020, the Respondent lodged a claim for JobSeeker Payment. As part of that claim the Respondent told the Applicant that she was married and had been living with Mr Gilmartin since 12 March 2010.[17]
[17] Exhibit 1, T Documents, T4, page 129, Jobseeker online claims form.
On 23 November 2020, the Applicant’s system was updated to reflect the Respondent’s relationship status changing from single to partnered with effect from 12 March 2010.[18]
[18] Exhibit 1, T Documents, T11, page 2122, Respondent’s customer mainframe screens.
The Respondent’s husband received employment income in each of the 2009/2010 to 2016/2017 financial years.[19]
[19]
The update triggered a further reconciliation of the Respondent’s FTB eligibility from

12 March 2010, taking into account both her and her husband’s actual adjusted taxable incomes in the 2009/2010 to 2016/2017 financial years. This led to the raising of debts in each of those years.[20]
[20] Exhibit 2, Secretary’s Statement of Facts & Contentions, page 3, paragraph 14.
On 23 November 2020, the Applicant raised and sought to recover the following FTB debts against the Respondent:[21]
[21] Exhibit 2, Secretary’s Statement of Facts & Contentions, page 3, paragraph 15.
(i)$3,293.03 for the 2009/2010 financial year;
(ii)$11,687.02 for the 2010/2011 financial year;
(iii)$11,887.34 for the 2011/2012 financial year;
(iv)$14,745.71 for the 2012/2013 financial year;
(v)$11,548.60 for the 2013/2014 financial year;
(vi)$10,407.02 for the 2014/2015 financial year;
(vii)$5,505.04 for the 2015/2016 financial year; and
(viii)$1,030.20 for the 2016/2017 financial year.
The Respondent sought review of that decision. On 3 December 2020, an Authorised Review Officer (ARO) affirmed the decision to raise and recover the debts.[22]
[22] Exhibit 1, T Documents, T6, pages 259-269, Decision and Notes of ARO.
The Respondent sought review of the ARO’s decision by the SSCSD. On 23 April 2021, the AAT varied the decision under review as follows:[23]
(a)2009/2010 financial year, the Respondent had a recoverable debt to the Commonwealth, with the amount of this debt to be recalculated by the Applicant on the basis that the Respondent became a member of a couple on 6 February 2010;
(b)2010/2011 financial year, the Respondent had a recoverable debt to the Commonwealth, with the portion of that debt from 8 September 2010 onwards was waived with effect from 23 November 2020 pursuant to section 97(3) of the FA Administration Act; and
(c)2011/2012 through to 2016/2017 financial year, the Respondent’s recoverable debt is waived with effect form 23 November 2020 pursuant to section 97(3) of the FA Administration Act.
[23] Exhibit 1, T Documents, T2, page 4, Decision of the SSCSD.
Following this, the Applicant sought a second-tier review of this matter by the General Division of the Tribunal, by way of application dated 25 May 2021.[24]
[24] Exhibit 1, T Documents, T1, pages 1-3, Application for Review of Decision.
On 28 March 2022, a telephone Hearing was held for this application. At the Hearing the Respondent gave evidence under affirmation. As at the date of the Hearing, the Respondent was not in receipt of social security benefit payments.
The relevant law in relation to the payment of FTB and recovery of debts to the Commonwealth is found in the A New Tax System (Family Assistance) Act 1999 (Cth)
(FA Act) and A New Tax System (Family Assistance) (Administration) Act 1999 (Cth)
(FA Administration Act).
ISSUES
The issues for the Tribunal to consider are:
1.whether the Respondent became a member of a couple from 6 February 2010;
2.whether the Respondent was paid more than her correct amount of family tax benefit during the period spanning the 2009/2010 to 2016/2017 financial years (debt period); and if so
3.whether the excess payments are debts to the Commonwealth that are recoverable in part or in full?
RESPONDENT’S EVIDENCE
The Tribunal notes that the Respondent has provided both her and her husband’s income tax returns for the debt period. The Tribunal has reviewed those returns in relation to the adjusted taxable income amounts calculated by the Applicant and is satisfied that the amounts calculated are correct.
The Respondent provided a Statement of Financial Circumstances dated

7 September 2021 which provides at that time:[25]
·The Respondent’s net pay per week was $1,021.00;
·The Respondent’s husbands net pay per week was $1,067.00;
·The Respondent and her husband received in total $1,050.00 rental income a month;
·Their household expenditure was $2,441.86 a week;
·Their combined assets were valued at $708,769.00; and
·She was unable to sell the investment property (that she estimated to be valued at $500,000.00) as her father was residing at the property and a court had found he had a financial interest in the property.
[25] Exhibit 2, Secretary’s Statement of Facts & Contentions, Annexure E, Respondent’s Statement of Financial Circumstances dated 7 September 2021.
At the Hearing the Respondent told the Tribunal that she does not understand why, if she has done nothing wrong and the debts have arisen because Centrelink officers have not done their jobs, she is now being asked to repay the money she honestly received.
The Respondent told the Tribunal that:
·      During the debt period she had told Centrelink on many occasions about her relationship with Mr Gilmartin.
·      She and Mr Gilmartin had attended the Beenleigh Centrelink office together when she notified the Centrelink Officers that they had gotten married and she changed her name.
·      She was not sure exactly when she first notified Centrelink, however thought it would have been prior to September 2010 and more likely in June or July 2010.
·      She and Mr Gilmartin attended the Beenleigh Centrelink office on a number of occasions due to child support issues they were both having with their previous partners.
·      At one time when they were going backwards and forwards to Centrelink, Mr Gilmartin was not working and his income was zero. The information was entered into the system incorrectly and he ended up with a child support debt. They had to go back in and sort it out and then had to repay a $7,000 debt. She was not exactly sure of the year this occurred.
·      She did not know how much FTB she should have been paid. She had always told Centrelink everything she needed to and they worked out her payments. She had always elected not to receive the full payment so that it could be reconciled at the end of the year. She said that sometimes she got paid extra money at the end of the year and sometimes her next year’s payments would be reduced if she had been overpaid.
·      She took no notice of how much FTB she was receiving as it went into an account that her mother had access to. During the debt period, the money was used so that her children could regularly fly down and see her mother and to help her mother when she needed it.
·      They did not rely on the FTB money. They lived and managed their lives with their earnings.
·      She has no idea what she was meant to be paid or what the overpayment was.
·      To her, her circumstances had never changed. She was married, she disclosed their income and lodged her tax returns. As such there was no reason for her to update anything with Centrelink.
·      She would have received the letters during the debt period, however she only read a few. The letters were all the same to her and her circumstances had not changed, so she would open the envelop, see the letter was from Centrelink and put it in her file, she would not read most letters.
·      When asked what she understood family income to mean, she said “how much you and your partners salary would be for the next year”.
·      Both her and Mr Gilmartin’s salary did not change all that much, the base was the same with little change other than sometimes they received bonus.
·      She provided everything she was asked to provide and did everything Centrelink asked her to do.
·      She never at any stage hid anything.
·      Nothing has changed in her circumstances, she and Mr Gilmartin are still married and both are still earning wages.
·      She did nothing differently in 2010 to which she had done previously since her first child was born.
·      When she reached out for JobSeeker, Centrelink told her that they did not know she was married and then they said they did know in 2018 and then the next time they said they knew from 2010.
·      This whole thing has occurred due to someone in Centrelink not doing their job properly.
·      Her daughter had applied for Youth Allowance in 2015 or 2016 and at that time, Centrelink contacted her and she disclosed both her and Mr Gilmartin’s income and her daughter’s application was refused because they earnt too much.
·      When taken through the Statement of Financial Circumstances dated
7 September 2021, she confirmed that her expenses had not changed, her liability commitments had not changed, Mr Gilmartin’s income was the same, however her father was no longer able to always meet the $500.00 a fortnight rent so she had gotten a part-time job in which she earnt between $480.00 and $510.00 a week after tax. Her part-time job meant she would always be able to cover the mortgage repayments.
·      They were able to meet their expenses and service their debts and sometimes they had a little bit left over if Mr Gilmartin gets overtime.
·      She had told the SSCSD that she had capacity to repay the debt on a repayment plan if she had to and this was still the case, however she does not know how much that would be. She said she does not have a choice.
·      She cannot sell her investment property as her father lives there and a magistrate during her divorce proceedings had said he has a financial interest in the property and can continue to live in it until he passes away. She has tried to get her father out of the property however has been unsuccessful. Given the state of the property, she considers it will cost a lot of money to be able to sell it and she just sees it as a money pit.
·      She does not know what to say about why her circumstances are special. She lives in a caravan and not on the street, which she is grateful for. She is struggling each day and she just takes each day as it comes.
·      She is financially ruined because of the investment property house. She will be lucky to sell it eventually and cover the mortgage.
·      She is just doing the best she can.
·      She just wants the whole thing over and done with so she can move on. The ongoing proceedings are affecting her sleep and health.
On cross-examination, the Respondent:
·      Acknowledged that she received the Centrelink letters during the debt period.
·      Said that if she provided her income tax returns then the figures would be correct.
·      Said that she assumed the letters were from Centrelink and were the same so she did not read most of them.
·      When asked if she accepted that the nine letters that provided her family income estimates as being between $45,000.00 to $73,000.00 during the debt period, and if those estimates were not correct that she was required to contact Centrelink and that her failure to make such contact also attributed to the debt was correct, said yes.
·      Said she does not know what to say, she just wants this all to stop and stated “just make the decision you have to” and disconnected from the Hearing.[26]
[26]    The Applicant confirmed by email later the same day that she did not want to be further contacted and wanted a decision to be made.
CONSIDERATION

From the outset it is relevant to note that at no stage has the Applicant suggested that the Respondent knowingly or fraudulently claimed more FTB than she was entitled to. The Tribunal agrees with that assessment and further finds that based on the evidence before it, the Respondent did notify Centrelink that she was married on 8 September 2010. These factors however do not change the fact, for the reasons set out below, that the Respondent received more FTB than she is entitled to during the debt period.
When did the Respondent become a member of a couple?
The evidence before the Tribunal sets out that the Respondent and Mr Gilmartin commenced living together and became members of a couple from 6 February 2010. The Respondent and Mr Gilmartin were married on 12 March 2010.
At Hearing the Respondent told the Tribunal she agrees that she became a member of a couple with Mr Gilmartin in February 2010, however could not remember the exact date.
The Tribunal notes that in the Respondent’s and Mr Gilmartin’s income tax returns for the 2009/2010 year, they have listed that they were partners from 6 February 2010.
Based on the evidence before it, the Tribunal finds that the Respondent became a member of a couple with Mr Gilmartin on 6 February 2010.
Did the Applicant receive the correct amount of FTB during debt period?
Section 21 of the FA Act provides the requirements for when an individual is eligible for FTB and refers to those provisions of the Act which are relevant in working out the individual’s rate of FTB.
Section 58(1) of the FA Act provides that an individual’s annual rate of FTB is to be calculated in accordance with the Rate Calculator in Schedule 1 to the FA Act. The rate calculator for FTB takes into consideration the individual’s adjusted taxable income and maintenance entitlement and includes the standard rate of FTB, relevant supplement and rent assistance benefits.
Schedule 3 to the FA Act provides that the “adjusted taxable income” of an individual for FTB purposes for an income year, where the individual is a member of a couple includes the adjusted taxable income for that the year of the individual’s partner.
Where it is determined that an individual is eligible to receive FTB, their rate is calculated and the general proposition is that a reconciliation will be undertaken to ensure the person is paid the correct amount of FTB during the relevant period.
Section 71(2) of the FA Administration Act provides that if a person has been paid an amount and received an amount that is greater than the amount that should have been paid to the person, the difference between the received amount and the correct amount is a debt due to the Commonwealth by the person.
The Tribunal notes that the evidence before it clearly indicates that in calculating the Respondent’s rate of FTB during the debt period, her husband’s income was not taken into consideration. While the Respondent told the Tribunal that she was not aware how her FTB was calculated and she relied on Centrelink to take care of it, that does not detract from the fact that had her husband’s income been taken into consideration, the rate of FTB she was paid would have been different.
Based on the evidence before it, the Tribunal finds that the Respondent received more FTB than she was entitled to during the debt period on the basis that her husband’s adjusted taxable income was not taken into consideration. As such, pursuant to section 71(2) of the FA Administration Act, the amount of FTB the Respondent has been overpaid is a debt owed to the Commonwealth.
As the Tribunal has found that the Respondent was a member of couple with her now husband from 6 February 2010, the debt calculation for the 2009/2010 financial years should be recalculated to take into consideration Mr Gilmartin’s adjusted taxable income from that date. The Tribunal accepts the debt calculations otherwise provided by the Applicant as being correct, noting that the Respondent did not make submissions to the contrary, but rather gave evidence that the calculations are something she leaves up to Centrelink.
Are the Respondent’s FTB debts repayable in part or in full?
As the Tribunal has found that FTB debts exist for the debt period, it must consider whether those debts must be repaid.
It is generally expected that debts to the Commonwealth are recovered. This proposition in relation to debt recovery was expressed by French J in Secretary, Department of Social Security v Hales [1998] FCA 219 at [1] as:
The taxpayer is entitled to expect that in the ordinary course money paid to people that they are not entitled to received will be recovered, albeit in a way appropriate to the circumstances which led to the overpayment and the circumstances of the persons concerned.
However, there are circumstances where the recovery of debts is either put on hold for a period of time (written off) or are no longer pursued (waived). Relevant to the Respondent’s FTB debts, the Applicant may write off, or waive, her FTB debt if the requirements set out in sections 95, 97 or 101 of the FA Administration Act are met.
Should the debts be written off pursuant to section 95 of the FA Administration Act?
Section 95(1) of the FA Administration Act provides the Applicant may, on behalf of the Commonwealth, decide to write off a debt for a stated period or otherwise, but only if subsections (2), (4A) or (4B) applies. Relevantly, section 95(2) of the FA Administration Act allows the Applicant to decide to write off a debt 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.
Section 95(4) of the FA Administration Act provides that 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 (Cth); 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 Applicant contended that there is no basis to write off the debt as there is no evidence that the debt is irrecoverable at law, the Respondent’s whereabouts are known, it is cost effective for the Commonwealth to take action to recover the debts and based on the Respondent’s Statement of Financial Circumstances dated 7 September 2021, she has capacity to repay the debts. The Applicant contended that the Respondent’s financial circumstances, although strained, do not give rise to an inability to repay the debts by way of a modest repayment arrangement, which she could negotiate with Centrelink.[27]
[27] Exhibit 2, Secretary’s Statement of Facts & Contentions, pages 7-8, paragraphs 36-44.
Based on the evidence before it, the Tribunal is satisfied that the Respondent’s FTB debts are recoverable at law, her whereabouts are known and it is cost effective for the Commonwealth to take action to recover the debts. As such the Tribunal must further consider whether the Respondent has capacity to repay the debts.
The Tribunal notes that the Respondent’s overall financial position when considering the Statement of Financial Circumstances dated 7 September 2021 shows a weekly deficient of funds of approximately $115.00 as well as the Respondent having access to a significant asset pool.
While the Tribunal accepts the Respondent’s evidence in relation to the state of, and her inability to readily realise any equity sitting in, her investment property, the Respondent’s overall weekly financial position at the date of Hearing is clearly better than that provided in the Statement of Financial Circumstances.
At Hearing the Respondent confirmed that the household expenses and assets remained the same, however said that she had taken on a part time job to ensure they were able to cover the mortgage repayments on the rental property in circumstances when they did not receive the full rent for the month. The Respondent also told the Tribunal that they are presently able to meet their expenses and service their debts and sometimes they had a little bit left over, particularly if her husband gets overtime.
The SSCSD recorded that the Respondent gave evidence that she would be able to repay money to Centrelink under an instalment plan if required.[28] The Respondent told this Tribunal she agreed that she provided that evidence to the SSCSD and said that it continued to be correct. She could enter a repayment plan as she would have to but she just does not know what the repayments would be.
[28] Exhibit 1, T Documents, T2, page 9, paragraph 18, Decision of the SSCSD.
As such based on the evidence before it, the Tribunal finds that the Respondent has capacity to repay the debts and while her financial circumstances are difficult, there is no evidence before the Tribunal that recovery would cause her severe financial hardship.
Consequently, the Tribunal finds that the Respondent’s FTB debts cannot be written off pursuant to section 95 of the FA Administration Act.
Should the debts be waived due to sole administrative error pursuant to section 97 of the FA Administration Act?
Section 97 of the FA Administration Act for the purposes of this matter provides that the Applicant 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.
Selway J, in Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190 at paragraph [35] stated:
The ordinary or usual interpretation of the phrase ‘attributable solely to’ is that it refers to the single or sole cause of the relevant act or event. The word ‘attributable’ means ‘capable of being attributed’. It involves an objective assessment of causation. The words ‘a debt attributable solely to an administrative error’ can be paraphrased as meaning that the only cause that objectively can be ascribed to the relevant debt is an administrative error.
The Applicant submitted that it accepts the Respondent received the payments that gave rise to the FTB debts in good faith.[29] Based on the evidence before it, the Tribunal agrees with that submission.
[29] Exhibit 2, Secretary’s Statement of Facts & Contentions, pages 12-13, paragraphs 69-72.
The Applicant submitted that it accepts the Respondent did notify Centrelink of a change in her legal name on 8 September 2010 and that correspondence was sent to her under that name from that date.[30] The Applicant, however, contended that the Respondent’s FTB debts were not attributed solely to an administrative error as:[31]
[30] Exhibit 2, Secretary’s Statement of Facts & Contentions, page 9, paragraphs 49-50.
[31] Exhibit 2, Secretary’s Statement of Facts & Contentions, pages 9-12, paragraphs 53-68.
53. The Agency sent multiple notices to the Respondent during the debt period as set out in Attachment D, which alerted her to the fact that her FTB was being calculated based on an incorrect combined income figure. These 98 notices also included a requirement pursuant to section 25 of the Administration Act for the Respondent to advise the Agency of any changes to her and/or her partner’s income.
54.The notices dated 29 April 2011, 1 May 2012, 22 August 2012, 2 May 2013, 7 May 2014, 6 May 2015, 6 August 2015, 11 May 2016 and 1 August 2016 also specifically, and clearly, required the Respondent to update her family income estimate for the 2011/2012, 2012/2013, 2013/2014, 2014/2015, 2015/2016 and 2016/2017 financial years by choosing one of two options. Option 1 provided for the Respondent to accept the Agency’s family income estimate as accurate, and Option 2 required the Respondent to provide the Agency with an accurate family income estimate by a specific date, if the estimate outlined in Option 1 was not accurate.
55.Further, section 25 of the Administration Act requires a person to notify the Secretary as soon as practicable about matters that might affect their entitlement to FTB.
56.There is no evidence the Respondent contacted the Agency to query or to correct the combined income amount being used to determine her FTB rate following her 8 September 2010 contact with the Agency, in which she provided an income estimate of $45,000. Agency records and the notices sent to the Respondent in the debt period instead indicate that the changes in the Respondent’s combined income amount were the result of Agency determinations of combined income figures being applied to her record, which the Respondent did not contact the Agency to correct, despite the notices outlining that she was required to do so if they were incorrect.
57.The Respondent’s evidence to the AAT1 was that recovery of her debts should be waived on the basis that she notified the Agency that she and Mr Gilmartin had married shortly after they commenced living together and that she then provided details of both their taxable incomes each year to the Australian Taxation Office (ATO) (T2, p7).
58.Firstly, the Secretary submits that as outlined in the 92 notices sent to the Respondent in the debt period, she was required to advise the Agency of changes in her circumstances and income amounts.
59.Providing information to the ATO does not satisfy or discharge this reporting requirement, and in support of that contention the Secretary relies on the decision of Townson and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2013] AATA 321, in which Senior Member Kenny found at para [8] that:
‘The first element to be satisfied under that provision of the Act is that the debt must be attributable solely to administrative error made by the Commonwealth. The applicant conceded that he had received letters from Centrelink throughout the relevant period which referred to the income relied on by Centrelink to determine the level of his age pension. Copies of the letters were in evidence and the amount stated as the applicant’s annual income is, variously, 12 or 14 cents.[4] He was employed as a taxi-driver throughout the relevant period and, though his income varied from day to day, he agreed that his average annual income was considerably in excess of the amount in the Centrelink letters. I am satisfied that those letters comprise notices under s 68 of the Social Security (Administration) Act 1999 (Cth) which obliged the applicant to provide the information requested. I am also satisfied that he did not advise Centrelink of his income during the relevant period. His reason for failing to do so was that he understood, from advice given by his accountant some time before the relevant period, that he did not need to do so provided he kept the ATO informed of his income. Clearly, that information was incorrect. Because he did not provide the requested information to Centrelink, it follows that the Commonwealth was not solely responsible for the overpayment of age pension to him. The debt may not be waived under s 1237A of the Act.’
60.Secondly, the Secretary submits that there is no evidence in the material currently before the Tribunal to support the Respondent’s contention that she notified the Agency of any relevant change in her circumstances until 8 September 2010, that date being the date her surname was changed on her internal Agency record.
61.However, the Secretary does acknowledge, as identified by the AAT1, that there is evidence of a contact between the Respondent and the Agency post 8 September 2010 in which the Respondent’s partnered status and partner details were discussed.
62.File note details of a contact relating to an emergency payment claim on 18 January 2011 (T12, p2159-2160) outline that the Respondent’s partner details were confirmed to be correct, and that the Respondent provided information related to her partner’s income details prior to the emergency event occurring and for eight weeks into the future. The Secretary notes this contact was in the context of an Income Recovery Subsidy Payment claim and not in relation to the Respondent’s ongoing FTB.
63.Despite this January 2011 contact and the Respondent’s ongoing provision of income tax returns to the ATO, the Secretary contends that the Respondent has contributed to the debts such that they cannot be said to be attributable solely to administrative error made by the Commonwealth, as per Gerhardt and Sekhon above.
64.The Respondent’s income tax returns that she provided to the AAT1 outline that her and her partner’s taxable incomes in the debt period were:
…….
66.Additionally, the Secretary also submits that these income tax returns also indicate that the Respondent’s combined family income was significantly in excess of the Agency determined amounts communicated to her in the notices sent to the Respondent dated 29 April 2011, 1 May 2012, 22 August 2012, 2 May 2013, 7 May 2014, 6 May 2015, 6 August 2015, 11 May 2016 and 1 August 2016.
67.The Secretary again notes that these notices advised the Respondent that if the Agency determined estimate was not correct then she was required to contact the Agency to provide an updated income estimate. The Secretary maintains his contention that there is no evidence the Respondent contacted the Agency to provide an updated income estimate for FTB purposes after 8 September 2010, noting that discussions about income in the 18 January 2011 contact were limited to fortnightly income and income for the next eight weeks as part of an income recovery and subsidy payment (T12, p2159-2160).
68.Accordingly, the Secretary submits that the Respondent’s FTB debts are not attributable solely to an administrative error made by the Commonwealth, but rather the Respondent’s failure to advise the Agency of her partner’s income as required by law, which was communicated to her in the 98 notices sent to her in the period 17 March 2010 to 1 August 2016.
The Respondent’s whole case centred around her contention that she does not understand why, if she has done nothing wrong and the debts have arisen because Centrelink officers have not done their jobs, she is now being asked to repay the money she honestly received.
The Tribunal considers the Respondent gave open and frank evidence at the Hearing, to which end the Tribunal accepts that she did advise Centrelink she had gotten married and had not hid that from subsequent dealings with Centrelink. As such the Tribunal finds that the Respondent’s FTB debts for the debt period were caused by an administrative error made on behalf of the Applicant.
The test however is whether those debts arose solely due to an administrative error. It is here that the problem lies for the Respondent. The Respondent openly told the Tribunal that she received, however did not read the letters sent by Centrelink during the debt period. She said that she updated her details and from that point on did not consider her circumstances to have changed, was not reliant on the FTB payment and as such relied on Centrelink to get the information from her and her husband’s tax returns and calculate her entitlements accordingly. Further the Respondent on cross-examination acknowledged that her failure to read the letters she received from Centrelink and take positive steps to correct the incorrect information within those letters had contributed to the incorrect calculation of her entitlements.

The notice provisions of the FA Administration Act[32] make it clear that upon being issued with such a notice, a positive obligation is placed on the FTB payment recipient to not only advise Centrelink if their circumstances change, but to also check the details outlined in the notice and advise Centrelink if they are incorrect. The Respondent in failing to engage with the letters (which constitute notices for the purposes of the FA Administration Act) she received from Centrelink has failed to meet the obligation to ensure that the information being used to calculate her entitlements to FTB were correct. Regardless of the fact that the Respondent considered her circumstances had not changed and that Centrelink had access to all relevant information it may need, she has through her failure to positively engage with Centrelink contributed to the circumstances in which the FTB debts in question arose.
[32] Section 158 of the FA Administration Act.
Consequently, based on the evidence before it, the Tribunal finds that the Respondent received the amounts of FTB in the debt period in good faith, however the FTB debts in relation to those financial years are not attributable solely to an administrative error.
As such the Tribunal finds that the Respondent’s FTB debts in relation to the debt period cannot be waived pursuant to section 97 of the FA Administration Act.
Should the debts be waived due to special circumstances pursuant to section 101 of the FA Administration Act?
Section 101 of the FA Administration Act provides that the Applicant may waive the right to recover all or part of a debt if they are 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.
The FA Administration Act does not provide a definition of ‘knowingly’, however it has been considered in a number of Tribunal decisions.[33] The Tribunal notes that in Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114 in referring to an earlier decision in Secretary, Department of Family and Community Services and Jonauskas [2001] AATA 72 at [74] said:
‘…I concluded that 'knowingly' means actually knowing as opposed to the other two of the three degrees of knowledge. The first of the other two sorts is the sort of knowledge that comes from deliberately refraining to make enquiries because the enquiries will lead to answers that are not desired by the enquirer. The second is constructive knowledge in the sense that the person ought to have known the specific information or had the means of knowledge.’
[33] For example see: Re Callaghan and Secretary, Department of Social Security (1996-97) 45 ALD 435 and Re Anderson and Secretary, Department of Families and Community Services (2002) 69 ALD 494.
The Applicant submitted that they accept the Respondent’s FTB debts did not result from her knowingly making a false statement or false representation or from knowingly failing or omitting to comply with her notification obligations under the FA Administration Act.[34] Based on the evidence before it, the Tribunal agrees with the Applicant’s submissions.
[34] Exhibit 2, Secretary’s Statement of Facts & Contentions, page 14, paragraph 77.
The FA Administration Act does not provide a definition of special circumstances, however the general proposition established by relevant Federal Court decisions make it clear that special means something different from the usual or ordinary.[35]
[35] Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541, at 545per Kiefel J; Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones(2012) 89 ATR 267; [2012] FCA 639, at [51]; Boscolo v Secretary, Dept of Social Security[1999] FCA 106; (1999) 90 FCR 531, at [18]; Barker J in Kazmierczak v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs[2010] FCA 1084, at [37].
In Re Beadle and Director-General of Social Security (1984) 6 ALD 1, the Tribunal held at page 3:
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.
In Re Ivovic and Director-General of Social Services (1981) 3 ALN N95; [1981] AATA 57, the Tribunal stated:
Whilst it would be unwise, if not impossible, to attempt to lay down any precise delineation of what may amount to “special circumstances” …., the use of the word “special” is, we think, intended to allow the decision-maker the fullest opportunity to consider the particular circumstances of each case … In the exercise of the discretion …., the decision-maker must have regard to whether, by exercising the discretion in a particular case, he will be achieving or frustrating ends or objects which are conformable with the scope and purpose of the …. Act.
The Applicant contended that the Respondent’s debt cannot be waived under section 101 of the FA Administration Act as there is no evidence to suggest that the Respondent’s circumstances in their totality are distinguishable to the extent that they could be considered ‘special circumstances’ enlivening waiver.[36] In considering the Respondent’s financial circumstances and administrative error as a special circumstance, the Applicant contended that:[37]
[36] Exhibit 2, Secretary’s Statement of Facts & Contentions, page 15, paragraph 83.
[37] Exhibit 2, Secretary’s Statement of Facts & Contentions, pages 16-17, paragraphs 90-95.
90. Upon review of the Respondent and her partner’s financial circumstances in their totality, it is therefore evident that both parties are in paid employment, have small savings balances, appear to be meeting their regular expenses each week and are able to maintain expenses including private health insurance and have a small entertainment budget. Additionally, they maintain significant assets that they will have the capacity to sell in the future, which, based on their current estimated value will enable them to pay off the entirety of their debts and still retain a significant amount of the settlement proceeds, if they elect to do so. The Secretary contends that when these financial circumstances are compared to the circumstances of others either in receipt of, or reliant on income support payments, it cannot be said that they are distinguishable such to the extent that they could be considered ‘special circumstances’ enlivening waiver.
Administrative error as a special circumstance
91.In regards to whether administrative error can amount to special circumstances enlivening waiver, the Secretary notes that in making an assessment as to whether there are special circumstances, it is relevant to consider how the overpayment came about (see, e.g. Dranichnikov v Centrelink [2003] FCAFC 133 at [66]). However, despite this, authorities have established that administrative error alone is generally not sufficient to constitute special circumstances, nor is it appropriate to use section 101 of the Administration Act to circumvent the application of section 97 of the Administration Act.
92.In Salsone and Secretary, Department of Family and Community Services [2002] AATA 1117, the Tribunal considered the corresponding sole administrative error and special circumstances provisions in the Social Security Act 1991 and at [31] stated: ‘Section 1237A of the Act appears to cover the field as regards the prospects for waiver in respect of administrative error. If waiver is not available under that provision then there is a strong presumption that s 1237AAD should not be invoked to circumvent s 1237A.’
93.In Tubic and Secretary, Department of Families, Community Services and Indigenous Affairs [2007] AATA 13, the Tribunal held at [30]:
‘I do not exclude the possibility that there might be cases where administrative error, taken alone, will give rise to special circumstances which make it desirable to waive a debt under s. 101 of the Administration Act. However, waiver under s. 101 of the Administration Act will not necessarily be appropriate in all circumstances in which administrative error causes or contributes to a debt being incurred. There must be something in the administrative error that gives rise to what may be properly regarded as special circumstances. In that regard it should be noted that the experience of the Tribunal has been that administrative error by the Respondent's delegates is, unfortunately, far from unusual. More importantly, where special circumstances arise from administrative error of the Commonwealth, there must be something about the administrative error that makes it desirable to waive the debt. Often that will involve some unfairness or hardship to the person who received the payment if repayment were to be required.’
94.In Atkinson and Secretary, Department of Social Services [2017] AATA 1963, the Tribunal confirmed at [95]:
‘There are numerous Tribunal determinations where special circumstances have been found to exist because, inter alia, there has been administrative error by Commonwealth officers: Brown and Secretary, Department of Family and Community Services [1999] AATA 113, Castle and Secretary, Department of Employment, Training and Youth Affairs [1999] AATA 176 and Reardon and Secretary, Department of Family and Community Services [2002] AATA 33. In each of these determinations administrative error was one of a number of factors that were taken into account. Administrative error alone can constitute special circumstances, but in such an instance there must be something in the administrative error which will involve unfairness or hardship to the recipient if repayment is required.’
95.The Secretary acknowledges that there is an element of administrative error in that the Respondent did advise the Agency of a change in her circumstances in September 2010 and the Agency acted on the basis of her being partnered in the January 2011 phone contact without also then updating her record to treat her as partnered for the purposes of calculating her FTB rate. However, for the reasons detailed above, the Respondent contributed to the debts arising by failing to contact the Agency to query or correct her combined income despite receiving multiple notices advising her of this error. In these circumstances, and where the Respondent has had the benefit of the payments but not the entitlement, there is no injustice in requiring the Respondent to repay the debts.
The Tribunal notes that the Respondent said in evidence that she did not know what to say about why her circumstances should be considered special. She said she lives in a caravan, not on the street, which she is grateful for, but she is struggling each day and just takes each day as it comes. The Tribunal accepts that the Respondent is not living a lavish lifestyle and that her and her husband work hard to meet their bills. However, while their financial position is strained, based on the evidence before the Tribunal and with reference to paragraphs 25-28 above, the Tribunal finds that her financial circumstances when considered as a whole are better than most people in receipt of social security payments and cannot be considered to be special for the purpose of exercising the discretion to waive the repayment of her FTB debts pursuant to section 101 of the FA Administration Act.
As outlined above, the Tribunal accepts that the Respondent’s FTB debts arose in part due to an administrative error made on behalf of the Applicant. Consistently, with the precedents referred to by the Applicant, the Tribunal agrees that administrative errors alone can constitute special circumstances in some cases, however in such cases there must be something in the administrative error that makes it desirable to waive the debt, such as there being some unfairness or hardship to the person who received the payment if repayments were to be required.
In this instance an administrative error did contribute to the Respondent’s FTB debts arising, however as set out above, the debt also arose due to the Respondent’s failure to ensure that the information on which her FTB payments were calculated were correct. Had the Respondent read the notices sent to her by Centrelink, it would have been clear that the family income used to calculate her rate of FTB and annual reconciliation was materially incorrect for most of the debt period. In such circumstances, the Tribunal does not consider an unfairness or hardship (particularly given the earlier discussion in relation to this issue) arises from the Respondent being required to repay her FTB debt.
As such the Tribunal finds that the administrative error in this matter does not lead to a finding of special circumstances being applicable such that the Respondent’s FTB debts could be waived pursuant to section 101 of the FA Administration Act.
Whilst to the Respondent, who said she relied on Centrelink to have the correct income information from her filed income tax returns and to calculate her correct rate of FTB payments, this may seem harsh. However, the FTB legislation makes it clear that there is an onus on the benefit recipient to ensure that the details being relied upon by Centrelink to pay the relevant benefit is correct. The Respondent was provided with a large number of notices of which required her to check the details and advise if they were incorrect. By deciding not to engage with the correspondence sent to her from Centrelink, the Respondent has, as referred to above, unintentionally contributed to the FTB debts in question.
Based on the evidence before the Tribunal and for the reasons outlined, the Tribunal finds that the Respondent’s circumstances are not sufficiently special or unusual to warrant the exercise of the discretion in section 101 of the FA Administration Act to waive the debt. Consequently, the Tribunal finds that the Respondent’s FTB debts cannot be waived pursuant to section 101 of the FA Administration Act.
CONCLUSION
For the reasons set out above the Tribunal finds that the:
(a)Respondent was a member of a couple from 6 February 2010;
(b)Respondent was paid more than her correct amount of FTB during the debt period;
(c)Respondent’s FTB debts for the 2009/2010 and 2010/2011 years must be recalculated in consideration that the Respondent was a member of a couple from 6 February 2010 rather than 8 September 2010 and that the recalculate debt is owed to the Commonwealth;
(d)Respondent’s FTB debts for the 2011/2012 to 2016/2017 financial years are correctly calculated and are debts owed to the Commonwealth;
(e)requirements of sections 95, 97 and 101 of the FA Administration Act are not met; and
(f)Respondent’s FTB debts are recoverable in full.
Accordingly, the decision under review is set aside and substitutes a decision that:
(a)the Respondent became a member of a couple on 6 February 2010; and
(b)the Respondent has the following FTB debts to the Commonwealth:
(i)for the 2009/2010 financial year as recalculated in consideration that the Respondent was a member of a couple from 6 February 2010;
(ii)a debt of $11,687.02 for the 2010/2011 financial year;
(iii)a debt of $11,887.34 for the 2011/2012 financial year;
(iv)a debt of $14,745.71 for the 2012/2013 financial year;
(v)a debt of $11,548.60 for the 2013/2014 financial year;
(vi)a debt of $10,407.02 for the 2014/2015 financial year;
(vii)a debt of $5,505.04 for the 2015/2016 financial year;
(viii)a debt of $1,030.20 for the 2016/2017 financial year; and
(c)the FTB debts are recoverable in full.

I certify that the preceding 79 (seventy-nine) paragraphs are a true copy of the reasons for the decision herein of Member D Mitchell

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

Date of hearing: 28 March 2022

Applicant: Services Australia

Solicitor for the Applicant: Mr Andrew Summers

Respondent: By Telephone

Exhibit 1, T Documents, T14, page 2208, Archive display summary and correspondence for the period

29 June 2009 – 21 July 2014.

Exhibit 1, T Documents, T12, page 2157, Respondent’s archived customer contact notes for the period

21 May 2009 - 10 December 2014.

Exhibit 1, T Documents, T10, pages 286-375, Income Tax Return details for the Respondent and

Mr Gilmartin.

Date of hearing:	28 March 2022
Applicant:	Services Australia
Solicitor for the Applicant:	Mr Andrew Summers
Respondent:	By Telephone