Hall; Secretary Department of Family and Community Services - [2000] AATA 971

DECISION AND REASONS FOR DECISION [2000] AATA 971

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N1999/940

GENERAL ADMINISTRATIVE DIVISION          )
           Re      SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Applicant
           And    SUZANNE HALL
  Respondent

DECISION

Tribunal Dr J D Campbell

Date8 November 2000
PlaceSydney

Decision The Tribunal sets aside the decision under review and in substitution therefore finds that the Respondent has a debt of $3350.05 due and payable to the Commonwealth, arising as a result of overpayment of family payment to the Respondent during the period 17 July 1997 to 8 October 1998.

[Sgd] Dr J D Campbell
Member
CATCHWORDS
Social Security - family payment - overpayment - whether debt arises - construction of a notifiable event - effect of notifiable event - application of sections 1069-H18, 1069-H19 and 885 - effect of recalculation of appropriate tax year - whether notifiable event can apply to two consecutive tax years - sole administrative error - special circumstances

Social Security Act 1991 - Sections 860, 872, 873, 874, 875, 876, 877, 877, 878, 879, 880, 881, 881A, 884, 885, 891, 1069, 1223, 1237AAD

Re Secretary, Department of Family and Community Services and Dyson [2000] AATA 306
Re Secretary, Department of Family and Community Services and Blackberry (1998) 53 ALD 112
Re Stuart and Department of Social Security (1997) 54 ALD 241
Re Secretary, Department of Family and Community Services and Morgan [1999] AATA 390
Re Secretary, Department of Family and Community Services and Gale [2000] AATA 193
Re Beadle and Director General of Social Security (1984) 6 ALD 1

REASONS FOR DECISION

Dr J D Campbell

The Secretary, Department of Family and Community Services ("the Applicant") in this matter seeks a review of the decision of the Social Security Appeals Tribunal ("the SSAT") dated 18 May 1999 that there was no overpayment of family allowance made to and/or debt owing by Ms Hall ("the Respondent"). This decision had set aside the earlier decision of a delegate of the Applicant dated 18 November 1998, which had been later affirmed in a decision by an authorised review officer dated 9 February 1999.
A hearing was held before the Tribunal on 25 May 2000 at which the Applicant was represented by Mr Slattery, an advocate from the Administrative Law Section of Centrelink. The Respondent was represented by Ms Koller, a solicitor from the Welfare Rights Centre. The Respondent presented oral evidence to the Tribunal.

The following material was placed in evidence before the Tribunal:
Documents prepared pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 T1-34 pp1-119
Letter from the Applicant to the Respondent dated 17 November 1999       Exhibit A1
Applicant's statement of facts and contentions dated 18 November 1999    Exhibit A2
Applicant's submission dated 25 May 2000       Exhibit A3
Applicant's letter to Respondent dated 17 October 1996        Exhibit A4
Respondent's statement of facts and contentions dated 18 May 2000         Exhibit R1
List of Respondent's expenses     Exhibit R2

issues

The relevant issues in this matter are:
(a)whether the Respondent has incurred a debt to the Commonwealth in the amount of $3550.05 representing family payment paid during the period 17 July 1997 to 8 October 1998; and
(b)whether, if a debt has arisen, the debt should be recovered from the Respondent; and
(c)whether the Applicant's letter to the Respondent of 17 October 1996 constitutes a notice of a notifiable event with the necessary specificity to satisfy the requirements of section 1069-H6 of the Act; and
(d)whether the Respondent's particular circumstances fall within the ambit of section 1069-H19 of the Act.

legislation

The relevant legislation in this matter is the Social Security Act 1991 ("the Act") and in particular sections 860, 872, 873, 874, 875, 876, 877, 877, 878, 879, 880, 881, 881A, 884, 885, 891, 1069, 1223 and 1237AAD.
background
The Respondent informed the Tribunal that she completed her schooling at the end of year 12, has two children, born 14 June 1996 and 11 January 2000, and has not been employed since commencing maternity leave prior to the birth of her first child. The Respondent stated that she has been receiving family payment since 14 June 1996. The Respondent indicated that she had many letters from the Applicant with regard to her family payment, and normally she would visit Centrelink for form lodging and/or with enquiries.
The Respondent told the Tribunal that her partner was unemployed in the second half of calendar year 1996; that he was receiving newstart allowance which commenced on 17 October 1996; that on 16 December 1996 her partner commenced casual employment with Round Town Transport (Aeroflex) and that this position became a full time position in March 1997. The Respondent further indicated that in formulating the estimates for 1997/98, she did not take into consideration maintenance payments made directly to her partner's ex-wife for their three children.
In a letter to the Respondent dated 17 October 1996 (Exhibit A4) the Applicant informed the Respondent that pursuant to sections 872, 873 and 873A of the Act, she must notify the Applicant within 14 days in terms of the following:
"You must tell us if you or your partner; start work or commence work, change jobs, or start self employment; or you are self employed and your combined income will be more than $24,915 in either 1995/96 or 1996/97 financial year."
On 30 April 1997 the Applicant wrote to the Respondent advising her that family payment had been reduced to the minimum rate of $23 per fortnight, as her partner was no longer receiving newstart allowance (T4, p17).
As a consequence of the failure to notify the Applicant of her partner's commencement of casual work on 16 December 1996, overpayments of newstart allowance ($1320.69) and parenting payment ($463.10) occurred. These have been paid in full and are not in issue.
The Applicant issued to the Respondent a family payment/childcare assistance request for income and assets details on 2 May 1997, which was lodged with the Applicant on 18 May 1997, in which the Respondent advised that:

combined taxable income for her and her partner for 1995/96 was $19,609;
her partner "started or recommenced work or changed jobs" on 20 March 1997;
estimated combined taxable income for 1996/97 for self ($4538), and partner ($10,000) plus newstart allowance; and
income earned in last four weeks was: family payment ($587) and partner allowance ($1868.88) (payslips attached). (T5)

On 16 May 1997 the Applicant forwarded a letter to the Respondent advising her that the income used to work out her and partner's combined rate of family payment was $19,609.00 and further that she must advise within 14 days if the combined income would be more than $25,685 in the 1995/96 or 1996/97 financial years (T8, p27).
On 17 July 1997 the Respondent lodged a "changes to your income and assets" form with the Applicant in which she estimated a combined taxable income for her and her partner for 1997/98 at $18,586 (partner's income estimated by multiplying gross weekly wage by 52). The Respondent did not complete the estimate at question 12 (T9, p33).
The Applicant continued to pay the Respondent family payment on base year income (1995/96) of $19,609 (T10).
The Applicant advised the Respondent on 16 October 1997 of a lump sum payment of family payment in advance and again requested the Respondent to notify within 14 days if the combined taxable income of herself and partner were to exceed $26,731.40 in either the 1996/97 or 1997/98 financial year (T11).
On 21 November 1997 the Respondent advised the Applicant of the actual combined taxable income for 1996/97 of $20,754 (T12).
In a series of advices to the Respondent, the Applicant indicated that the Respondent must notify within 14 days if the combined taxable income of her and her partner exceeded:

$20,754 for either 1996/97 or 1997/98 – 16 December 1997 (T14).
$26,426 for either 1996/97 or 1997/98 – 19 January 1998 (T15).
$25,740 for either 1996/97 or 1997/98 – 17 September 1998 (T16).

On 21 October 1998 the Respondent lodged with the Applicant the Annual "Review of Your Family Allowance and Childcare Assistance" form in which she advised combined taxable income for 1997/98 of $29,593 and an estimate of a combined taxable income of $26,000 to $27,000 for financial year 1998/99 (T17).
As a consequence, on 18 November 1998 the Applicant raised a debt of $3550.05 owed by the Respondent as a result of overpayment of family payment/allowance for the period 17 July 1997 until 8 October 1998 (T24).
This was reviewed by an authorised review officer and affirmed in a decision dated 1 February 1999 and by the SSAT which on 18 May 1999 set aside the primary decision and found that there was no debt.
submissons: the applicant
The Applicant contends that the debt was correctly raised and should be recovered from the Respondent. It is the Applicant's contention that the Respondent failed to notify the Applicant of a notifiable event, being her partner commencing casual work in December 1996. The Applicant notes that notification of the partner's employment of 20 March 1997 was made on 18 May 1997; that the estimate for 1997/98 of $18,586 was given by the Respondent on 17 July 1997; and it is the correct treatment of this estimate which is the issue in contest.
It is the Applicant's submission that the commencement by the Respondent's partner of casual work in December 1996 was a notifiable event pursuant to subsection 872(1) and 1069-H6, which the Respondent failed to notify. As a consequence section 860 may be applied to recalculate the rate of family payment subject to the provisions contained within module H of section 1069. The Applicant argues that it was correct to continue paying the Respondent at the same rate of family payment when the review was undertaken in July 1997 as the income amounts estimated for 1996/97 and 1997/98 were at a level which did not affect payment at the base year rate (1995/96).
The Applicant further contends that module H of section 1069 of the Act contains provisions which permit the Secretary to determine what tax year is the appropriate tax year to use when determining a person's entitlement, with the tax year only changing in certain circumstances. It is the Applicant's contention that the relevant provision in this matter is section 1069-H19.
It is the Applicant's contention that a notifiable event occurred in the tax year 1996/97, at which time an estimate was not sought, as the Respondent failed to notify until 18 May 1997. The Applicant argues section 1069-H18 does not apply, as, while the notifiable event occurred in the tax year 1996/97, the income quantum for that year was $20,754, and that this was not 110% more than the actual income for base year 1995/96 of $19,609 and 110% of the Respondent's income free area of $23,350 at that time. Accordingly section 1069-H18 is not applicable, and on the basis of the information provided at that time it was correct to continue payment at the maximum rate with the appropriate tax year remaining as the base tax year 1995/96.
The Applicant, as a consequence of information received on 17 July 1997 submits that section 1069-H19 allows the Secretary to have regard to the Respondent's estimate of $18,586 for the tax year (1997/98) following the event tax year (1996/97). Further it is submitted that subsection 1069-H19 (a) and (b) are satisfied, but on the information provided at 17 July 1997, the Respondent's family payment continued to be assessed in calendar year 1997 on the basis of the base year 1995/96 income of $19,609, as it is evident that the estimate of income for tax year 1997/98 is not likely to exceed either the Respondent's income for the base tax year 1995/96 and the income free area by 110% (figures in previous paragraph). In essence the Applicant contends that section 1069-H19 is not applicable at this time (namely 17 July 1997).
The Applicant further contends that as a result of the review form lodged by the Respondent on 21 November 1997, pursuant to section 873 of the Act, it was appropriate to move to the new base year (1996/97) pursuant to 1069-H13 of the Act, with family allowance continuing to be paid at maximum rate.
With the lodgement of the Respondent's end of year review form on 21 October, the Applicant was advised that the Respondent's combined actual income for 1997/98 was $29,593 and that this was more than 110% of the Respondent's estimated income of $18,586, provided on 17 July 1997 for the same tax year 1997/98. It was also more than 110% of the Respondent's income free area of $23,350 for the same period.
The Applicant contends that regard was had to the estimate for 1997/98 provided by the Respondent on 17 July 1997 and that pursuant to section 885 of the Act recalculation can occur when the actual income exceeds the estimate by 110%, with the Respondent's rate of family payment to be recalculated on the basis of that income, and the recalculation taking effect from the date of the earlier determination (17 July 1997) pursuant to section 891 of the Act.
It is the Applicant's contention that an overpayment of $3550.05 resulted, with this constituting a debt pursuant to subsection 1223(3) of the Act.
The Applicant further contends that there is no sole administrative error in this matter and that there has been no misapplication of the legislation by the Applicant. Accordingly, albeit that the Respondent may have received payments in good faith, subsection 1237A(1) of the Act does not apply.
Finally the Applicant contended that the Respondent had not demonstrated any matters which could constitute special circumstances and accordingly section 1237AAD of the Act is not applicable.
submissions: the respondent
The Respondent submitted that there was no notifiable event, in that the notice issued to the Respondent on 17 October 1996 was deficient and failed to nominate that there was a notifiable event for the purposes of the module pursuant to section 1069-H6 of Act. In making such a submission the Respondent was relying upon Deputy President Blow in Secretary, Department of Social Security and Blackberry (1998) 53 ALD 112 where he commented that in essence an event may be described as a notifiable event pursuant to section 872 of the Act, but it may not trigger the provisions which change a person's base tax year, unless there is a specific intention to do so by complying literally with the requirements nominated in section 1069-H6 of the Act.
The Respondent further argues that in the event there was a notifiable event, it could not be said that the income was likely to exceed 110% of the base year income (1994/95) or the income free area. Further, when asked to supply particular income details on 2 May 1997, the Respondent responded on 18 May 1997 of her estimated combined taxable income for 1996/97 as $14,538, plus her partner's newstart allowance. The Respondent was not requested to make an estimate for 1997/98. On the facts and figures provided, the Respondent contends that section 1069-H19 was not triggered, as it was not likely that the income would exceed the relevant figures in 1997/98, and in so doing relied upon Re Secretary, Department of Family and Community Services and Dyson [2000] AATA 306. As a consequence the Respondent contends that the appropriate tax year for calculation of the Respondent's family payment remained the base tax year.
Further the Respondent argues that section 885 of the Act can only be used where an incorrect estimate has been lawfully used, and in the Respondent's case there is no provision allowing the lawful use of an estimate as there was no provision to change her base tax year to one for which an estimate was necessary.
Finally the Respondent contends that if any debt is found to exist it should be waived on the grounds of sole administrative error for failing to correctly assess her entitlements, pursuant to section 1237A of the Act and/or alternatively waived in the special circumstances as nominated by the Respondent to include her financial circumstances and the issue and consequences of the administrative error where the Applicant failed to make proper enquiry of the Respondent as regards an estimate of combined financial income for year 1997/98, when the Applicant became aware of the notifiable event in May 1997.
consideration and findings
The facts in this matter are generally agreed between the parties, with the issue of the Respondent's credit not in dispute. Accordingly the Tribunal makes the following findings of fact:
(a)the Respondent commenced receiving family payment on 14 June 1996;
(b)the Respondent did receive a letter dated 17 October 1996 which stated that the Respondent must inform the Applicant if either she or her partner start work, or recommence work or change jobs or start self employment;
(c)the Respondent's partner commenced casual work on 16 December 1996;
(d)the Respondent's partner commenced full time work with the same employer on 20 March 1997;
(e)the Respondent did not advise the Applicant that her partner had commenced casual work on 16 December 1996;
(f)the Respondent did advise the Applicant on 18 May 1997 that her partner commenced full time work on 20 March 1997; combined taxable income for year 1995/96 was $19,609; estimated taxable income for year 1996/97 was $14,538 plus newstart; and the combined income earned in the last four weeks was family payment ($587) and partner allowance ($1868.88);
(g)the Respondent advised the Applicant on 17 July 1997 of an estimated combined taxable income for her and her partner for 1997/98 of $18,586;
(h)the Applicant, having considered the estimate, continued to pay the Respondent family payment based on base tax year 1995/96 of $19,609;
(i)the Respondent's combined taxable income for 1996/97 was $20,754; and
(j)the Respondent's combined actual income for 1997/98 was $29,593.

The Tribunal notes that particular submissions have been made as to whether or not the statutory requirements for a notifiable event have been satisfied. In so doing, the following pertinent legislative framework is stated:
"860. If the rate of the family allowance payable to a person in a calendar year has been worked out in accordance with the Family Allowance Rate Calculator in section 1069, the rate of family allowance payable to the person only has to be worked out again during that calendar year if:
the person notifies the Department or an officer that a notifiable even has occurred in relation to the person; or
a notifiable event has occurred in relation to the person and the person fails to notify the Department that it has occurred; or
the Secretary makes a determination in relation to the person under point 1069-H21 or point 1069-H22C in Module H of the Family Allowance Rate Calculator in section 1069; or
(ca) family allowance advance is or is not payable for a particular period; or
the person revises an estimate of his or her income; or
the person has underestimated his or her income; or
(f) the Commissioner of Taxation changes an assessment of the person's taxable income.
…
872.(1) The Secretary may give a recipient of family payment a notice that requires the recipient to inform the Department if:
(a) a specified event or change of circumstances occurs; or
(b) the recipient becomes aware that a specified event or change of circumstances is likely to occur.
…
1069-H6. If the Secretary gives a person notice under subsection 872(1) relating to the payment of family payments to the person, the Secretary may state in the notice that an event described in the notice is a notifiable event for the purposes of this module."

It is the Tribunal's view that the statutory framework provides, in the context of this matter, that a determination that family allowance is payable to a person continues in effect until it ceases to be payable as a consequence of issues of compliance, or failing to comply, with notification requirements under section 872 (subsections 875, 876). Section 860 permits a recalculation to occur during the calendar year where there has been a failure to notify the department of a notifiable event. Subsection 1069-H13 and 1069-H14 within the family payment rate calculator nominates that the appropriate tax year for a family payment payday is the base tax year, this being the tax year that ended on 30 June in the calendar year that came immediately before the calendar year in which the payment occurs. Changes to the appropriate tax year because of a notifiable event can only occur in defined circumstances, namely subsection 1069-H18 and 1069-H19.
In turning to the initial issue of whether or not a valid notice was issued to the Respondent on 17 October 1996, which required her to notify the Applicant within 14 days of particular events occurring or likely to occur, there is no argument between the parties that the notice issued to the Respondent pursuant to section 872(1) placed obligations on her to notify such notifiable events. The issue in question is whether the notice issued satisfies section 1069-H6, and consequently whether on the occurrence of such an event, the failure to notify the notifiable event has effect within module H.
In addressing this issue, the Tribunal notes the particular terms of the letter of 17 October 1996 to the Respondent and the particular activities/events which the Respondent was mandated to notify. The events nominated and the requirement placed upon the Respondent are neither complex nor onerous, and in the Tribunal's opinion reflect the nominated or particular events and an action to be undertaken by the Respondent if such events were to occur. Notification of these notifiable events are in the Tribunal's view part of the statutory process. In noting the word "may" within section 1069-H6, the Tribunal is of the opinion that it provides a discretion for the writer of the section 872(1) notice, as to whether or not he wishes to reinforce and particularise for the recipient of the notice, the particular sections within the Act, in which notification of a notifiable event has effect. Further the Tribunal is of a mind that a literal reading of the section would indeed frustrate the purposes of the Act, as a result of notification of a notifiable event having no real consequences, with any recalculation allowed under section 860 being frustrated by the absence of a "notifiable event" for module H. In summary it is the Tribunal's finding, given the discretion implied by the use of the word "may", that the real intention of the section 872(1) notice was to nominate notifiable events with the clear intention of recalculating the Respondent's rate of family payment once notified.
The Tribunal is further reinforced in its opinion by the findings in Re Stuart and Secretary, Department of Social Security (1997) 54 ALD 241, where at 251 Deputy President Forgie states:
"41. Ms Hall has pointed to Ms Stuart's return to work as a notifiable event. I have first looked to the documents for the requisite notice under section 872(1). The Department's letter dated 27 October, 1994 is such a notice for it comes within that definition in that it meets the requirements of section 872.
42. Does the letter specify that any of the events described in the notice is a notifiable event for the purposes of Module H (ie for the purposes of the family payment income test in Module H (point 1069-H4)? It states that it is a "recipient notification notice". This is a generic term defined in section 23 to cover a wide range of notices under various sections of the Act. It does not specifically refer to Module H or specifically state that the events described are notifiable events for the purposes of that Module.
43. I do not think, however, that the notice must itself expressly state that it is specifying events for the purposes of Module H. The notice must be looked at as a whole to determine whether the events have been specified and it is clear that they have been specified for the purposes of Module H. Looked at in this fashion, I consider that the letter of 27 October, 1994 is a notice under subsection 872(1) that specifies certain events for the purposes of calculating Ms Stuart's family payment ie for the purposes of Module H."

The Tribunal also notes the decisions in Re Secretary, Department of Family and Community Services and Morgan [1999] AATA 390 and Re Secretary, Department of Family and Community Services and Gale [2000] AATA 193. The Tribunal also considered the matter of Blackberry (supra), and found for the reasons already stated that it could not concur.
Turning to the particulars of this matter, the Tribunal finds that the letter to the Respondent dated 17 October 1996 did nominate particular events, namely if the Respondent or her partner started work, recommenced work or changed jobs. Further the Tribunal finds that the Respondent's partner did start work on 16 December and the Respondent did not notify the Applicant of this "notifiable event". As to whether there was another notifiable event when the Respondent's partner commenced full time work on 20 March 1997, while the Tribunal is of the view that moving from casual work to full time work albeit with one employer may well constitute a change of jobs, in this matter it is of little consequence, as one "notifiable event" has already been found to exist in tax year 1996/97.
appropriate tax year
The Tribunal, having concluded that there was a notifiable event in tax year 1996/97 and that this became known to the Applicant during April/May 1997, next considers what effect the occurrence of a notifiable event should have had on any change to the appropriate tax year, that is away from the base tax year upon which the Respondent's family payment was paid, up to the occurrence of the notifiable event being calculated.
The Tribunal has earlier observed that the change to the appropriate tax year can occur under particular circumstances nominated in subsections 1069-H18 and 1069-H19. These two subsections of the Act provide as follows:
"1069-H18 If:
(a)a notifiable event occurs in relation to a person; and
(b)the person's income for the tax year in which the notifiable event occurs exceeds:
(i)     110% of the person's income for the base tax year; and
(ii)    110% of the person's income free area;
the appropriate tax year, for the purpose of applying this Module to the person for the remainder of the family allowance period, is the tax year in which the notifiable event occurs.
1069-H19If:
(a)a notifiable event occurs in relation to a person; and
(b)point 1069-H18 does not make the year in which the event occurs (the event tax year) the appropriate tax year; and
(c)the person's income for the tax year that follows the event tax year is likely to exceed:
(i)     110% of the person's income for the base tax year; and
(ii)    110% of the person's income free area;
the appropriate tax year, for the purpose of applying this Module to the person for:
(d)the part of the family allowance period in which the event occurs that comes after the end of the event tax year; and
(e)the next family allowance period after the one referred to in paragraph (d);
is the year that follows the event tax year."

In relation to section 1069-H18, the Tribunal notes that a notifiable event did occur in 1996/97; that the combined taxable income for 1996/97 was $20,754; that the combined taxable income for the base tax year (1995/96) was $19,609 and that the Respondent's income free area was $23,350. It is evident that the Respondent's combined taxable income for 1996/97 does not exceed by 110% the Respondent's income for the base tax year (1995/96) and the income free area appropriate at that time. The Tribunal so finds and concludes that section 1069-H18 is not applicable in this matter.
In turning to section 1069-H19, the Tribunal finds that a notifiable event did occur in tax year 1996/97, that point 1069-H18 does not make the event tax year the appropriate tax year and that the Respondent's income for tax year 1997/98 (the tax year following the event tax year), while estimated by the Respondent on 17 July 1997 to be $18,586, was more likely to be in the order of $26,000 to $27,000. The Tribunal, in making such a finding, has given consideration to the available evidence which existed at the time that the Applicant became aware of the notifiable event, and as a consequence requested information from the Respondent on 2 May 1997. Such requested information was lodged with the Applicant on 18 May 1997, and included attachments detailing the Respondent's partner's last four weeks of earnings, as well as indicating the date on which the partner commenced full time work (20 March 1997) and about which there was no evidence of discontinuance. The Tribunal, in noting that the partner worked only three days in one week, concludes that the partner was earning at the rate of approximately $500 per week plus overtime (40 x 12.48) and as a consequence the Tribunal, based on the evidence which was available at the time concludes that the combined taxable income for the Respondent and her partner was likely to be of the order of $26,000 to $27,000 for tax year 1997/98.
As a consequence of the Tribunal's finding, it is concluded that the combined income for tax year 1997/98 is likely to exceed 110% of the base year income (1995/96) of $19,609 and 110% of the income free area ($23,350). As a consequence the Tribunal finds that section 1069-H19 is applicable in this matter, resulting in a change of tax year from base tax year to tax year following the event tax year. As the event tax year was 1996/97, the correct tax year for family payment calculation is tax year 1997/98.
In arriving at such findings, the Tribunal has noted the decision of Dyson (supra) and concurs with Deputy President Forgie's consideration of the word "likely" and more so with the opinion that whether a person's income was likely to exceed those limits nominated must be assessed objectively on the basis of information known at the time that the Department has knowledge of the notifiable event and has made enquiry of the Respondent as to current and expected level of earnings.
The Tribunal next observes that the Respondent on 17 July 1997 provided an estimate of combined taxable income for 1997/98 of $18,586 and that this was considered by the Applicant, prior to a continuance of family payment on base tax year (1995/96). The Tribunal has already found that the effect of section 1069-H19 is to change the appropriate tax year from the base tax year to tax year 1997/98, the year for which the Respondent has supplied an estimate.
In considering the Respondent's evidence, it is clear to the Tribunal that it was a significant underestimate, for she elected not to include salary garnishees for child maintenance for her partner's previous wife and three children in formulating her estimate. As a consequence of the underestimate the Applicant continued to pay family payments on base tax year (1995/96).
The Tribunal, in noting the Respondent's combined taxable income for 1997/98 of $29,593, observes that the Applicant did have regard to the Respondent's estimate for this particular period, and in accordance with section 885(1) and section 891 of the Act which provide as follows:
"885.(1) If:
(a) working out the rate of family payment payable to a person, regard is had to the person's income for tax year; and
(b) the income to which regard was had consisted of an amount estimated by the person; and
(c) the person's income for that tax year is more than 110% of the amount of the income which the determination of the rate of family payment was based.
…
891.If:
the Secretary makes a determination of a person's rate of family allowance; and
in making the determination, the Secretary had regard to the person's income for a tax year;
the income to which regard was had included an amount or amounts estimated by the person; and
the person's income for the tax year is more than 110% of the amount of the income on which the determination referred to in paragraph (a) was based; and
the Secretary makes a determination varying the person's rate of family allowance, or cancelling the person's family allowance, to give effect to the recalculation required by section 885;
the later determination takes effect on the day on which the earlier determination took effect."

The Tribunal finds that a recalculation should occur, and that the later determination should take effect from the date of the earlier determination, namely 17 July 1997, as the Respondent's combined taxable income of $29,593 for 1997/98 did exceed by 110% the estimate given of $18,586 for 1997/98.

Section 1223(3) of the Act provides as follows:
"Recalculation of amount of family allowance
1223(3) Subject to subsection (4), if:
an amount (the "received amount") has been paid to a person by way of family allowance; and
the person's rate of family allowance is recalculated under:
section 884 (amendment of assessable income); or
section 885 (underestimate of income); or
section 886 (failure to notify notifiable event); and
(c) the received amount is more than the amount (the correct amount) of the family allowance payable to the person;
the difference between the received amount and the correct amount is a debt due to the Commonwealth."

The Tribunal concludes that the Respondent has received an overpayment of family payment and that this is a debt due to the Commonwealth. The period in which the debt was accrued is 17 July 1997 to 8 October 1998.

In considering issues of waiver, the Tribunal notes the following sections of the Act, which provide:
"1237A(1) Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.
1237A(1A) Subsection (1) only applies if:
(a)the debt is not raised within a period of 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."

It was submitted to the Tribunal that the Applicant should have, upon acquiring knowledge of the notifiable event, sought information from the Respondent as to her estimate of combined taxable income for 1997/98, and not waited until receipt of such information on 17 July 1997 in response to their request. The Respondent indicated in this form that she had formulated the combined income estimate for 1997/98 by multiplying the partner's weekly income by 52. In evidence before the Tribunal the Respondent indicated that she had not included the garnishee maintenance payments in the partner's weekly income. It is evident to the Tribunal, that while an earlier request for an estimate for combined taxable income for 1997/98 may been appropriate, the Applicant, by virtue of the Respondent's stated methodology of formulating the estimate, would have been in no better situation than when eventually provided with the estimate on 17 July 1997. The Tribunal has already decided that for section 1069-H19 to be operative in this matter, an objective consideration of likely earnings for 1997/98 must be undertaken, at a time adjacent to actual knowledge of the notifiable event. In this matter the Tribunal has found that the Respondent by way of the provision of her partner's time sheets in his role as a full time employee provided sufficient objective evidence for the Tribunal to find that section 1069-H19 was applicable in this matter.
However the matter does not necessarily end at this point. The Tribunal acknowledges that the Respondent did provide an underestimate of combined taxable income for 1997/98 on 17 July 1998, and the Applicant acknowledged that it had regard to this estimate in deciding that family payment should continue to be assessed on the basis of the base tax year. The issue that is exposed by the Applicant having regard to this estimate, is whether the Applicant should have had any regard to it, in that in the light of section 1069-H19 being found to be applicable in this matter, the Applicant must have formed the view that there was a likelihood that the Respondent's combined taxable income for 1997/98 would exceed by 110% both the base tax year amount (1995/96) of $19609 and the income free area of $23,350, and in so doing so must have come to the view that combined taxable income for the Respondent for 1997/98 was likely to be greater than $25,650. The question that the Tribunal must ask is whether the Applicant should have had regard for any estimate that was less than an amount which must have existed for section 1069-H19 to be applicable in this matter. It is the Tribunal's finding that the Applicant should have made further enquiry as to the formulation of the estimate provided by the Respondent on 17 July 1997, for it was inconsistent with the necessary workings of section 1069-H19. As such it was not open to the Applicant to have regard to an estimate which was patently inconsistent with a level of income necessary some few months earlier for section 1069-H19 to be applicable. As a consequence the Tribunal does further find that the Applicant, by having regard to an estimate, by not making further enquiry when the estimate was patently inconsistent with a likely level of income necessary for section 1069-H19 to be applicable and having not disregarded the estimate for the very reason of inconsistency with the likely level of income necessary for section 1069-H19 to be applicable, has embarked on an administrative course of action which is inconsistent with the Act.
The remaining issue for the Tribunal to decide is whether the Applicant's actions constitute sole administrative error. While the Tribunal has already acknowledged and found that the Respondent provided an underestimate of combined earnings for 1997/98 on 17 July 1997, it is evident that this estimate was accepted by the Applicant, when it acknowledged that regard was had to this estimate. While the underestimate is the source of the overpayments, it is evident to the Tribunal that the Applicant accepted the estimate without further enquiry, and in a situation where it should have been on notice that the likely level of income for the Respondent would have to be considerably higher, if section 1069-H19 were to be applicable. In essence the Applicant had regard to the estimate when it should have been disregarded with further enquiry undertaken to establish the formulation of the estimate. In the Tribunal's view the overpayment arose both from the underestimate provided and the manner in which this estimate was dealt with by the Applicant. It is the Tribunal's finding that the error that led to the overpayment arose from actions by both the Applicant and the Respondent and that as a consequence sole administrative error by the Applicant is not established.

Finally the Tribunal, considering the issue of waiver because of special circumstances, notes section 1237AAD which states:
"1237AAD. The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a)the debt did not result wholly or partly from the debtor or another person knowingly:
(i) making a false statement or false representation; or
(ii)failing or omitting to comply with a provision of this Act or the 1947 Act; and
(b)there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c)it is more appropriate to waive than to write off the debt or part of the debt."

The Tribunal notes that the Respondent has submitted that her financial circumstances, as nominated in Exhibit R2, are tight with fortnightly outgoings not much less than income. The Tribunal finds that the Respondent's financial circumstances are not unusual, uncommon or unique and as such do not constitute special circumstances (Re Beadle and Director General of Social Security (1984) ALD 1 considered and followed).

The Tribunal also finds that no other circumstances exist which could fall under the definition of special circumstances and accordingly finds that there is no case for waiver of the debt under section 1237AAD of the Act.
determintion
The Tribunal sets aside the decision under review and in substitution thereof finds that the Respondent has a debt of $3350.05 due and payable to the Commonwealth, arising as a result of overpayment of family payment to the Respondent during the period 17 July 1997 to 8 October 1998.

I certify that the sixty (60) preceding paragraphs are a true copy of the reasons for the decision herein of Dr J.D. Campbell.
Signed:         .....................................................................................
  Associate
Date/s of Hearing  25 May 2000
Date of Decision  8 November 2000
Solicitor for the Applicant         Ms S Koller
Solicitor for the Respondent    Mr B Slattery