HFHK and Secretary, Department of Social Services (Social services second review)

[2017] AATA 469

HFHK and Secretary, Department of Social Services (Social services second review) [2017] AATA 469 (11 April 2017)

Division:GENERAL DIVISION

File Number:           2016/2983

Re:HFHK

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Mr D.J. Morris, Member

Date:11 April 2017

Place:Perth

The Tribunal affirms the decision under review.

.......[Sgd].................................................................

D.J. Morris, Member

CATCHWORDS

SOCIAL SERVICES – Child Care Benefit – Family Tax Benefit– whether applicant paid in excess of correct entitlement – is debt raised and recoverable – should debt be waived or written off, in part or full – applicant is war widow – deficiencies between computer systems of Department and Department of Veterans’ Affairs – was there ‘maladministration’ – whether severe financial hardship or special circumstances making desirable to waive debt applicable - decision affirmed

LEGISLATION

A New Tax System (Family Assistance) Act 1999, Sch 1, cls 3 and 25

A New Tax System (Family Assistance)(Administration) Act 1999, ss 71, 71C, 97, 101

Social Security Act 1947 (repealed)

CASES

Angelakos v Secretary, Department of Employment and Workplace Relations (2007) 110 ALD 9; (2007) 44 AAR 436; [2007] FCA 25

Beadle and Director-General of Social Security (1984) 6 ALD 1; (1984) AAR 362; [1984] AATA 176

Ford and Ethel Reynolds and Secretary Department of Social Security (1986) 10 ALN N155; (1986) 4 AAR 478; [1986] AATA 120

Groth v Secretary, Department of Social Security (1995) 40 ALD 541; [1995] FCA 1708

Lumsden and Secretary, Department of Social Security (1986) 10 ALN N225; [1986] AATA 228

Secretary, Department of Social Security v Coralie Hales (1998) 153 ALR 259; [1998] FCA 219

Timothy Davy and Secretary, Department of Employment and Workplace Relations (2007) 94 ALD 693; [2007] AATA 1114

Ward v Commissioner of Taxation [2016] FCAFC 132

REASONS FOR DECISION

Mr D.J. Morris, Member

11 April 2017

BACKGROUND

1. The Applicant, HFHK, receives Family Tax Benefit (FTB) payments in respect to her four minor sons, one born in 2001, twins born in 2004 and one born in 2014.  On 23 January 2014 HFHK became partnered. At that time she was in receipt of a Department of Veterans’ Affairs (DVA) war widow’s pension and an income support supplement from DVA.  HFHK advised both DVA and the Department of Human Services (Centrelink) that she had become partnered.

2. HFHK separated from her partner in September 2015.

3. On 11 January 2016, Centrelink decided to raise and recover certain debts on the grounds that HFHK’s entitlement to FTB and Child Care Benefit (CCB) should have been income tested following the cancellation of her income support supplement in January 2014. The debts were:

   ·FTB debt totalling $6,182.13 for the period 23 January 2014 to 30 June 2014;

   ·FTB debt totalling $15,398.73 for the 2014-15 financial year;

   ·CCB debt totalling $516.52 for the period 27 January 2014 to 6 July 2014; and

   ·CCB debt totalling $3,028.46 for the period 12 January 2015 to 5 July 2015.

4. HFHK asked that these debt decisions be reviewed. A review was undertaken by an Authorised Review Officer (ARO), an officer of Centrelink not involved in the original decision. The ARO concluded that all the debts were caused solely by administrative error and decided to waive recovery of the debts that related to the 2013-14 financial year (T19, pg 57).  However, the ARO also decided that recovery of the remaining debts could not be waived because they were raised within the financial year following the year in which the debts occurred.

5. The ARO found that the overpayment of FTB and CCB for the 2014-15 financial year was recoverable and also found that the correct amount of the recoverable debt was a total amount of $18,427.19 (T19, pg 60).

6. HFHK sought a review by the Social Services and Child Support Division of this Tribunal (AAT1). On 11 May 2016, AAT1 conducted a hearing and affirmed the ARO’s decision.

7. HFHK applied for a review by the General Division of the Tribunal. The hearing took place on 3 March 2017. The Applicant represented herself, gave evidence and was cross-examined by Mr Ashley Burgess, representing the Respondent, the Secretary of the Department of Social Services.

8. The Respondent tendered two volumes of documents under section 37 of the Administrative Appeals Tribunal Act 1975 (‘T’ documents), which were admitted into evidence (Exhibits R1 and R2).

9. The Tribunal also took in the Secretary’s Statement of Facts, Issues and Contentions dated 9 September 2016 with two annexures (Exhibit R3).

10. The Applicant tendered the following documents:

    ·Applicant’s submission, received on 30 September 2016 (Exhibit A1);

    ·Bravery Trust letter, dated 14 July 2016 (Exhibit A2); and

    ·Statement of Financial Circumstances, dated 15 August 2016 (Exhibit A3).

    FACTS

11. A person’s eligibility for FTB payments is determined pursuant to Part 3 of A New Tax System (Family Assistance) Act 1999 (the Act) by application of Schedule 1 to that Act. The relevant law in this matter is the Act and A New Tax System (Family Assistance) (Administration) Act 1999 (the Administration Act).

12. Section 71 of the Administration Act states:

    71Debts arising in respect of family assistance other than child care benefit, child care rebate and family tax benefit advance

    No entitlement to amount

    (1)  If:

    (a)  an amount has been paid to a person by way of family tax benefit,stillborn baby payment, single income family supplement or schoolkids bonus (the assistance) in respect of a period or event; and

    (b)  the person was not entitled to the assistance in respect of that period or event;

    the amount so paid is a debt to the Commonwealth by the person.

    Overpayment

    (2)  If:

    (a)  an amount (the received amount) has been paid to a person by way of assistance; and

    (b)  the received amount if greater than the amount (the correct amount)of assistance that should have been paid to the person under the family assistance law;

    the difference between the received amount and the correct amount is a debt due to the Commonwealth by the person. 

13. Section 71C of the Administration Act states:

    71C     Debts arising in respect of child care benefit where overpayment

    If:

    (a)  an amount (the received amount) has been paid to a person by way of child care benefit in respect of a period; and

    (b)  the received amount if greater than the amount (the correct amount) of benefit that should have been paid to the person under the family assistance law in respect of that period;

    the difference between the received amount and the correct amount is, subject to section 71F, a debt due to the Commonwealth by the person.  

14. Section 71F of the Administration Act relates to debts arising under more than one provision and is not relevant to this matter.

15. In this matter it was common ground of both the Applicant and the Respondent that the debt had been correctly calculated and that there was, in terms of these provisions, a debt due to the Commonwealth by HFHK.

16. Section 95 of the Administration Act gives the Secretary of the Department certain powers to write off the debt for a stated period or otherwise if certain requirements set out in subsections (2), (4A) or (4B) are met.

17. Section 97 of the Administration Act gives the Secretary the power to waive the Commonwealth’s right to recover the whole or part of a debt if the circumstances set out in sections 97, 98, 99, 100, 101 or 102 of that Act are satisfied. Sections 98, 99, 100 and 102 are not applicable in HFHK’s case.

18. The Tribunal therefore must consider whether provisions available under sections 97 or 101 are applicable to HFHK’s circumstances in regard to waiving part or all of this acknowledged debt. The Tribunal must also consider whether the requirements in section 95 of the Administration Act are met, for write off of the debt for a stated period.

    What happened?

19. HFHK is a war widow. As such she is entitled to a war widow’s pension and an income supplement, administered by DVA, and FTB and CCB payments, administered by Centrelink.

20. As mentioned above, she is a single mother with four children.  She was widowed in 2005 and her husband’s death was accepted by DVA as being service-related in terms of eligibility for war widow’s pension in 2007.

21. In January 2014 HFHK contacted Centrelink to advise that she had become partnered and that her partner’s income was about $130,000 a year.

22. In May 2014 the Applicant made inquiries of Centrelink in relation to her FTB.  In August 2014 she contacted Centrelink and made inquiries as to whether her partner’s income was used for the full financial year or from the date Centrelink was notified.  In September 2014 HFHK advised Centrelink that she had had another child and her FTB entitlement was adjusted accordingly.

23. In September 2014 HFHK contacted Centrelink and advised that her partner’s taxable income was $100,000. In September 2014 she contacted Centrelink and, in the Respondent’s submissions (which were contested by the Applicant) advised that, owing to a change in work/hours and pay rate, her partner’s income was updated as $24,000. 

24. On 25 November 2015, HFHK advised Centrelink that she was no longer partnered. 

25. On 11 January 2016, Centrelink sent a letter to the Applicant advising that an overpayment had been made in regard to the CCB she had received in the 2014-15 financial year.  HFHK had received $3,959.78 and was correctly entitled to $931.32 (T17, pg 50).

26. On the same day, Centrelink sent another letter to HFHK advising that there had also been an overpayment of FTB she had received for the 2014-15 financial year. The Applicant received $28,212.72 and was correctly entitled to $12,813.99 (T18, pg 53).

27. HFHK sought a review of the debt decisions and the ARO decided on 19 February 2016 to vary them by deciding that she did not have to repay the amounts which related to overpayments made in the 2013-14 financial year because they were solely due to Centrelink’s administrative error and should be waived on that ground. The ARO found that the 2014-15 debts were, however, recoverable.

28. The Applicant submitted that, as was also detailed in the Respondent’s own submissions, she made inquiries about the effect her re-partnering would have on payments made by DVA and Centrelink.  As a result of those inquiries, her DVA income support supplement was cancelled and she said Centrelink advised her she was still entitled to FTB and CCB as she was in receipt of a war widow’s pension.

29. HFHK submitted that she had properly informed DVA and Centrelink of her circumstances and believed, therefore, she was entitled to the payments she received.

30. The Applicant submitted to AAT1 and at this hearing, and it was not contested by the Respondent, that Centrelink failed to take her (now former) partner’s income into account when determining her subsequent entitlement to FTB and CCB as required by the relevant rate calculators.  The consequence was the overpayment.

31. The Respondent made submissions to me, and I accept that there was no suggestion that HFHK did not provide details of her circumstances, and changes in those circumstances, at the relevant times.  The Respondent also conceded that HFHK at all times received the payments made to her in good faith, on the honest assumption that she was entitled to receive them.

32. HFHK told AAT1 (T3, pg 9 at [21]) that when she contacted Centrelink in September 2014, she was told by officers that there was a:

    …system problem to do with Centrelink and DVA payments, and in order to pay her the correct amount of family assistance Centrelink had to do a “work-around”.

33. The Tribunal had before it a document (T23, pg 104) dated 26 September 2014 which “recorded” that HFHK had updated the combined income estimates for her and her partner to be $23,500 for him and $18,500 for her, a total of $42,000. The Applicant told AAT1 that she did not provide those figures and that they were actually entered into the computer system by Centrelink to, in her words, “fool the system” into paying her the full rate of FTB.

34. HFHK’s contentions in this regard seem to me to be supported by the customer record entered on 26 September 2014 by an officer at the Coffs Harbour office of Centrelink, which reads, relevantly (T23, pg 122):

    Cust has been impacted by a known system issue for FAO cust’s on DVA payments.  Cust is entitled to max rates of FTB and CCF.  As per NNU – Family Tax Benefit (FTB) and Child Care Benefit (CCB) incorrectly reducing for some Department of Veterans’ Affairs (DVA) customers (9052) – cust inc has been updated accordingly and cust has been contacted and advised of payments and current system issues.

35. This evidence corroborates what the Applicant claims. It is clear to me that the debts came about not because of anything HFHK did but because of an inadequacy in the computer systems. Put simply, it would appear to me that the DVA and Centrelink computer systems are unable to properly exchange relevant information on the income of persons, like HFHK, who may be in receipt of income support benefits from both departments.

36. This is a most unwelcome state of affairs. The Tribunal is unable to ascertain how many citizens may be in the class of persons that HFHK is, that is, in receipt of income support from both DVA and Centrelink, but this may be a group of significant size.  The Tribunal is aware, for instance, that there are formal administrative arrangements between Centrelink and DVA so an eligible veteran can elect to have his or her age pension paid to them by DVA rather than Centrelink, so the very fact of these arrangements indicates a person receiving benefits from both sources is not uncommon.

37. It is not the proper function of the Tribunal to offer the Respondent public policy advice, but it would seem logical that if officers of Centrelink consider this, in their words, “a known system issue”, it should be something that is remedied.

38. In this case it has led to a person, through no fault of her own, receiving in good faith certain monies and it is reasonable to conclude that she was unaware that she was not entitled to the full amounts.

39. The ARO said, in her letter to the Applicant dated 19 February 2016 (T19, pg 60):

    I am satisfied that the debts in this case are attributable to administrative error.  You told both this department and the Department of Veterans Affairs that you’d become partnered.  You also gave both department details of your partner’s income.  Evidently the departments did not communicate effectively about the cancellation of your Income Support Supplement and for that reason your family assistance payments continued on an income test free basis.

    I’m satisfied, too, that you received the incorrect payments in good faith.  I believe you were told that because you were receiving a War Widows Pension, your family assistance payments would be unaffected by your partner’s income.

    As the administrative error and good faith criteria are satisfied, the recovery of the 2013/2014 Family Tax Benefit and Child Care Benefit debts will be waived.  This is because they were determined more than 13 weeks after the incorrect payments were made, and, more than a year after the end of the income year to which they related.

40. Section 97 of the Administration Act states, in relation to debts that arise from administrative error, as follows:

    97       Waiver of debt arising from error

    (1)  The Secretary must waive the right to recover the proportion (the administrative error proportion) of a debt that is attributable solely to an administrative error made by the Commonwealth if subsection (2) or (3) applies to that proportion of the debt.

    (2)  The Secretary must waive the administrative error proportion of a debt if:

    (a)  the debtor received in good faith the payment or payments that gave rise to the administrative error proportion of the debt; and

    (b)  the person would suffer severe financial hardship if it were not waived.

    (3)  The Secretary must waive the administrative error proportion of a debt if:

    (a)  the payment or payments were made in respect of the debtor's eligibility for family assistance for a period or event (the eligibility period or event) that occurs in an income year; and

    (b)        the debt is raised after the end of:

    (i)  the debtor's next income year after the one in which the eligibility period or event occurs; or

    (ii)  the period of 13 weeks starting on the day on which the payment that gave rise to the debt was made;

    whichever ends last; and

    (c)  the debtor received in good faith the payment or payments that gave rise to the administrative error proportion of the debt.

    (4)  For the purposes of this section, the administrative error proportion of the debt may be 100% of the debt.

41. I find, on the facts, that the ARO was correct in her decision in regard to the 2013-2014 FTB and CCB debts.  The 2013-2014 should be waived because they came about solely because of an administrative error – in this case the apparent incompatibility of the DVA and Centrelink computer systems – and HFHK received the payments in good faith.

42. However, the debts that the Applicant incurred in the 2014-2015 financial year cannot be waived under section 97(3) of the Administration Act because those debts were determined on 16 December 2015, i.e. within the 2015-2016 financial year, unless HFHK can meet the requirements to invoke the Secretary’s power in section 97(2)(b) that she would “suffer severe financial hardship” if the debts were not waived.

43. The Applicant contended in her written submissions that she suffers severe financial hardship and in consideration of her individual family circumstances, the debt should be waived under section 97(2) of the Administration Act.

44. HFHK also submitted that the Tribunal should consider that she satisfies the requirements in section 101 of the Administration Act which provides a discretion for the Secretary of the Department of Human Services to waive debts in special circumstances. Section 101 states:

    101     Waiver in special circumstances

    The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:

    (a)  the debt did not result wholly or partly from the debtor or another person knowingly:

    (i)         making a false statement or a false representation; or

    (ii)  failing or omitting to comply with a provision of the family assistance law; and

    (b)  there are special circumstances (other than financial hardship alone) that make it desirable to waive; and

    (c)  it is more appropriate to waive than to write off the debt or part of the debt.

    The Applicant’s contentions regarding severe financial hardship

45. In support of this contention, HFHK made the following written submissions (Exhibit A1, paras [3-7]):

    The Applicant is a single mother of four children. 

    The Applicant requires the assistance of charitable organisations in the form of gift cards or hampers to ensure there are enough basic essentials for the family. 

    The Applicant has submitted an income and expenditure [statement] explaining the severe financial hardship the family struggles under and the ongoing expenses that must be met. 

    On an individual basis the future financial situation of the Applicant is highly unlikely to improve and the amount of $15.00 per fortnight significantly impacts [upon] the ability for [sic] the family to meet basic needs on a fortnight by fortnight basis. 

    The Applicant is severely isolated from any family as they all reside in the Eastern states and is unable to afford to move back after moving to Western Australia with the ex-partner.

    The Applicant’s contentions regarding special circumstances

46. HFHK submitted that the term ‘special circumstances’ in section 101 is not defined and has been given “a wide scope of interpretation by the court.” HFHK cited Beadle and Director-General of Social Security [1984] AATA 176, wherein the Tribunal stated, at paragraph [12]:

    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.

1. The Applicant submitted the fact that the employees of the Secretary did not have the relevant training or knowledge to ensure that the Applicant was entitled to receive the benefits and positively informed the Applicant that the payments received were correct was a special circumstance. HFHK also said she was reliant on the “special skills, knowledge and access to systems” to ensure that the correct entitlement was paid and that, after fulfilling her obligation to inform the Secretary of becoming partnered, the Applicant had no way of accessing the internal computer systems to check whether the information had been entered and processed correctly.

2. She argued the fact that Centrelink circumvented its own computer system and entered incorrect income details “informing the Applicant to ignore the data entered until the issue was fixed” amounted, in her contention, to “serious maladministration.”

3. HFKK contended that the fact that Centrelink employees did not:

   regularly deal with issues pertaining to War Widows Pensions and FTB to provide and implement the payments correctly shows that this individual case is unusual and was markedly different from the usual cases handled by the Secretary call centre staff.

   CONSIDERATION

4. In Groth v. Secretary, Department of Social Security [1995] FCA 1708, Kiefel J considered the meaning of the expression “special circumstances”. Her Honour said at [12]:

   The phrase ‘special circumstances’, it has been said, although imprecise is sufficiently understood not to require judicial gloss: Beadle’s case [Beadle v Director-General of Social Security] at ALR 229 ALD 674, and for present purposes it is sufficient to observe that it would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case. That was, I consider, the only enquiry to be undertaken in this case. It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.

5. In Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25, Besanko J warned against requiring there to be exceptional circumstances before there may be said to be special circumstances at [33]:

   ... I also note that the authorities have emphasised time and again the importance of maintaining flexibility in determining what constitutes special circumstances. The danger is that the test will be overstated if the word ‘exceptional’ is emphasised. It was not the intention of Parliament to confine the exercise of the discretion to an exceptional case. There is less risk of overstatement if the words ‘unusual’ or ‘uncommon’ are emphasised. Those words indicate, correctly in my view, the fact that there must be something that distinguishes the case from the ordinary or usual case. It may not be easy to postulate the ordinary or usual case other than in quite general terms and, in doing so, close attention must be given to the particular statutory context.

6. The Full Court of the Federal Court has recently cautioned against a decision-maker taking too narrow a view of what may constitute “special circumstances” within the meaning of an Act of Parliament.  In Ward v Commissioner of Taxation [2016] FCAFC 132, Their Honours stated, in that context at [43]:

   In our opinion, the Tribunal erred in law by taking too narrow a view of what may constitute “special circumstances” within the meaning of the statute.  This may have been caused by unnecessarily considering factors in isolation before focusing on the entirety of the circumstances said by the applicant to be special.

7. In her evidence, HFHK said to expect an individual citizen to repay a debt which arose through maladministration is unjust, especially when that person is in “low socio-economic circumstances and vulnerable”. She said that the intention of section 97 is to protect individuals where an administrative error is attributed to Centrelink and that the phrase “special circumstances” should be read as broadly as possible because it is the only protection that individuals have from the actions of Centrelink.

8. In cross-examination, HFHK said she had not provided bank account details because there was no place for that on the ‘Statement of Financial Circumstances’ form.  She stated that she had a main bank account and one credit card.  In Exhibit A3, which was the Statement of Financial Circumstances form filled in by the Applicant and dated 15 August 2016, HFHK stated that her income per fortnight was $1,019 per fortnight in Centrelink payments and $1,096 per fortnight from her DVA War Widow’s Pension, plus $254 in child support paid by her former partner, presumably a fortnightly amount.  This reveals a stated fortnightly income of $2,369. 

9. This was also the amount that the Respondent submitted was HFHK’s fortnightly income.

10. I note in passing that the Statement of Financial Circumstances form does actually include provision for a person to detail his or her bank account details.  During the hearing the Applicant offered to obtain and provide bank statements to the Tribunal.  The Respondent did not adopt a position on that offer and the Tribunal concluded that this was an honest omission and that the Applicant’s other evidence had been frank, and there was no suggestion of HFHK having substantial personal savings which she has not disclosed.  The Tribunal did not require this information.

11. HFHK also said she owned a 50 per cent share in a motor vehicle she valued at $35,000 but that this vehicle was “disputed property” between her and her former partner. 

12. In terms of household expenditure, HFHK said she pays $820 a fortnight for rent and has other general and grocery expenses in the order of $1,572 a fortnight.

13. In evidence, HFHK agreed that she was now receiving $1,019 per fortnight in Centrelink payments which was greater than the $805 amount she had told AAT1 and explained that her entitlements had gone up since the time of the AAT1 review.  She said that both Legacy and the Bravery Trust had provided vouchers to assist her in her household expenditure and provided some evidence of that (Exhibit A2).

14. The Respondent asked how the Applicant’s expenses appear to have risen over $300 per month since May 2016 (the date of the AAT1 review) and noted that HFHK had told the previous hearing that she estimated she “has about $300 a week left after her expenses” not taking into account car registration and associated costs such as new tyres.  The Applicant was unable to explain the change in expenditure except to make the fair point that her children are all getting older and grocery bills were therefore increasing, and especially the costs for her youngest child, as he gets older.

15. The Tribunal Member at the first tier review, noting that HFHK has four dependent children and is on a fixed income and concluded that she is in “straitened financial circumstances” but was not persuaded that the recovery of the debts at the rate of $15 per fortnight would cause her to suffer “severe financial hardship”.

16. I must, in this review, consider HFHK’s circumstances afresh. I may agree with some of the conclusions that the Member drew at AAT1, or I may find otherwise. The words “severe financial hardship” used in section 97(2)(a) of the Administration Act are not defined in that Act or its companion Act. The Tribunal has considered how to, however imperfectly, apply this assessment to a person’s particular circumstances.

17. Deputy President Jennings, QC, considered this exact phrase in relation to the Social Security Act 1947 (repealed) in Ford and Ethel Reynolds and Secretary to the Department of Social Security [1986] AATA 120. He said, at paragraphs [29-31]:

    However, the applicants must also satisfy the Tribunal that they would suffer “severe financial hardship” if s. 6AD did not apply to them. That expression is not defined. The pensions benefits and allowances which the Act provides for persons who fulfil the requirements of the Act are clearly designed (inter alia) to avoid severe financial hardship to persons who would otherwise be without adequate means of support.

    The level of pension or benefit payable to different persons in different circumstances is a recognition by Parliament of the amount which is considered to be appropriate for that purpose from time to time.

    The decision to introduce the assets test was the implementation of a policy not to subsidise the income of some persons who had sufficient resources of their own.  If those resources in fact produce an income in excess of the maximum pension payable to an aged person it will be difficult for such a person to demonstrate “severe financial hardship”.  It may be possible if his or her reasonable living expenses are unusually high for some exceptional reason.  But in the ordinary case “severe financial hardship” is a condition that is more likely to be demonstrated by a person whose income is materially less than the current maximum pension.

18. The Respondent quoted a later case, Lumsden and Secretary, Department of Social Security (1986) AATA 228 wherein the Tribunal quoted Reynolds and expanded it slightly to suggest that a person’s entire financial position would need to be materially less than the current rate of pension.

19. I think Deputy President Jennings' approach in Reynolds has an objective logic.  It would seem that the Applicant’s financial circumstances are “straitened” in the sense of the Macquarie Dictionary definition of that word, meaning “restricted; difficult; narrow”.  I accept that, after her household fixed costs and groceries are budgeted for each fortnight, she does not have much discretionary expenditure.  However, her fortnightly income is some $2,369.  That is some $61,564 per annum.  This is not an especially generous income, but using the logic in Reynolds and comparing HFHK’s annual income to one well-established social security benefit, the aged pension, the Applicant’s annual income is substantially higher than the aged pension, which with the energy supplement is currently some $23,095 per annum.

20. With this income and noting her disclosed expenditure commitments, on the basis that the Applicant is paying $15 per fortnight in repayment of the overpayment, I find that she would not suffer severe financial hardship if the debt was not waived, so the requirements which would invoke the Secretary’s mandatory waiver under section 97 are not met.

21. Turning to whether special circumstances apply, other than financial hardship, which would make it desirable to waive the debt, adopting the reasoning in Angelakos and Ward, I have considered the entirety of HFHK’s circumstances.  I have also taken into account that both parties have drawn the Tribunal’s attention to the decision of Deputy President Forgie in Timothy Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114, where she stressed that the term ‘special circumstances’ in section 1237AAD(b) of the Social Security Act 1991, which is a similar provision relating to debt waiver as in the Administration Act, the phrase must be read in the context of ‘special circumstances…that make it desirable to waive” a debt. As set out above, those special circumstances in section 101 must be special circumstances other than financial hardship alone.

22. HFHK has made fair submissions about her personal circumstances but I do not find that any of them could be characterised as uncommon or particularly unusual.  Many recipients of social security benefits are single parents, and many are isolated by geography from other family members who might otherwise support them.  In terms of the flaws in the exchange of data between the DVA and Centrelink computer systems, regrettably HFHK would not appear to be in an unusual or uncommon situation, but in fact she is one of a class of persons in this category.  The Tribunal cannot quantify the class, but, as mentioned above, is aware that there are many persons who receive benefits from both departments.

23. In terms of the Applicant’s contentions about “maladministration”, I would agree that her entitlements were managed, in the ordinary definition of that word, badly or inefficiently.  HFHK submitted that officers of Centrelink told her to “just ignore the data entered until the system is fixed”.  There is nothing to corroborate this assertion by the Applicant, but I have no reason not to believe her. However, in considering the concept of ‘maladministration’, the Tribunal considers that there would need to be shown some positive dereliction of duty by officers in HFHK’s case for this point to constitute special circumstances. There was no such dereliction. On her own evidence to AAT1 and submissions to this hearing, HFHK said that the officers applied a “work around” to try and ensure she received the benefits she was entitled to, because they were aware of a “system issue”.

24. Although the computer systems were flawed, the officers were actually, if somewhat maladroitly, attempting to help the Applicant receive what they assessed as her proper entitlements.  That they miscued and the result was that she was overpaid does not, in my mind, provide the ingredients for special circumstances.  I may have come to a different conclusion if the outcome for HFHK had been a substantial financial detriment to her.  But it was not; it was to the contrary, HFHK actually received a substantial financial benefit with the overpayment, not a disadvantage.

    CONCLUSION

25. The Applicant has been paid in excess of her entitlements from the public purse, which she acknowledges.  As French J said in Secretary, Department of Social Security v Coralie Hales [1998] FCA 219 at paragraph [1]:

    The taxpayer is entitled to expect that in the ordinary course money paid to people which they are not entitled to receive will be recovered, albeit in a way appropriate to the circumstances which led to the overpayment and the circumstances of the persons concerned.

26. The Tribunal is not unsympathetic to the Applicant. She acted properly in providing regular advice to DVA and Centrelink of her changes in circumstances. She is the unwitting recipient of a failure in a computing system which was not of her doing. But the impassable outcome was that she received substantially more money in benefits than she should have, not less. The 2013-14 debt was, as I have found, correctly written off as sole administrative error. But that provision cannot be used for the later debts, and after careful consideration I find that the other provisions in section 97 and section 101 of the Administration Act are not applicable to HFHK’s circumstances.

27. For completeness, I also find that the provisions in section 95 of the Administration Act are not applicable to the Applicant. The debt is not irrecoverable at law. The Applicant’s whereabouts are known and it is cost-effective for the Commonwealth to recover the debt. The debtor also has the capacity to repay the debt by the modest repayment arrangements that have been put in place. While I can understand HFHK’s exasperation, she did have the benefit of the funds, and the repayment regime is not onerous.

28. I find that the decision of the ARO was therefore the correct decision.

    DECISION

29. The Tribunal affirms the decision under review.

I certify that the preceding 75 (seventy-five) paragraphs are a true copy of the reasons for the decision herein of Mr D.J. Morris, Member

.......[Sgd].................................................................

Administrative Assistant

Dated: 11 April 2017

Date of hearing:	3 March 2017
Applicant:	In person
Representative for the  Respondent:	Mr A Burgess
Solicitors for the Respondent:	Sparke Helmore Lawyers