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

Hockey and Secretary, Department of Social Services (Social services second review) [2018] AATA 978 (20 April 2018)
Administrative Appeals Tribunal
ADMINISTRATIVE APPEALS TRIBUNAL              )
  )           No: 2017/0543
General Division  )
Re: Carly Hockey
Applicant

And: Secretary, Department of Social Services
Respondent
CORRIGENDUM
TRIBUNAL:  Member D K Grigg
DATE OF CORRIGENDUM:   24 May 2018
PLACE:           Brisbane

The Tribunal directs the Registrar, pursuant to subsection 43AA(1) of the Administrative Appeals Tribunal Act 1975, to alter the text of the decision in this application as follows:

the front page of the decision should be corrected by replacing the reference to “written off” to “waived”; and

paragraph 78 of the decision should be corrected by replacing the reference to “written off” to “waived”.
........................[SGD]..............................
Member

Division:GENERAL DIVISION
File Number: 2017/0543
Re:Carly Hockey
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

Decision
Tribunal:Member D K Grigg
Date:20 April 2018
Place:Brisbane

The Tribunal sets aside the decision under review and substitutes a decision that the FBT and SKB Debts be written off pursuant to section 97 of the Administration Act.
...........................[SGD].............................................
Member D K Grigg

Catchwords
FAMILY ASSISTANCE – family tax benefit and schoolkids bonus – overpayment –where administrative error – whether payments received “in good faith” - decision under review set aside.
Legislation
A New Tax System (Family Assistance) Act 1999 (Cth)
A New Tax System (Family Assistance) (Administration) Act 1999 (Cth)
Social Security Act 1991 (Cth)
Cases
Haggerty v Department of Education, Training and Youth Affairs (2000) 31 AAR 529
Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484
Secretary, Department of Family & Community Services v Sekhon[2003] FCA 76
Sekhon v Secretary, Department of Family and Community Services[2003] FCAFC 190
Secondary Materials\
Guide to Social Security Law (2017, Cth)
REASONS FOR DECISION
Member D K Grigg
20 April 2018
INTRODUCTION AND CLAIMS HISTORY

At all relevant times Ms Hockey was a recipient of parenting payments (PP), family tax benefit (FTB) and the schoolkids bonus (SKB). The amount of benefits paid to a recipient is dependent upon a variety of circumstances including whether the recipient is a member of a couple. Ms Hockey had also been receiving child care benefits (“CCB”) and the childcare rebate (“CCR”) on the basis that she had 3 children in child care.
In March 2013 Ms Hockey notified the Department of Human Services (“Centrelink”) that she was now a member of a couple having married Mr Hockey on 15 February 2013.[1]
[1] Exhibit 1, T Documents, T4, pages 31-36, Change of relationship status form dated 11 March 2013.
On 26 March 2013 Ms Hockey and her partner verbally advised Centrelink that Ms Hockey would claim FTB for her step children and that payment would commence from 12 March 2013. At that time Ms Hockey and her then partner had 50% care of her partner’s 5 children.
On 26 March 2013 Ms Hockey received a Centrelink statement which indicated that her FTB was being calculated on the basis that she had 50% shared care of 7 children (including her 5 stepchildren) and 25% care of one other child.[2] A similar notice was sent on 6 April 2013.[3]
[2] Exhibit 2, Secretary’s Statement of Facts, Issues and Contentions dated 12 December 2017, Attachment A,
Centrelink notice dated 26 March 2013.
[3] Exhibit 2, Secretary’s Statement of Facts, Issues and Contentions dated 12 December 2017, Attachment A,
Centrelink notice dated 6 April 2013.
On 16 June 2013 Ms Hockey received a Centrelink statement which indicated that her FTB was being calculated on the basis that she had 100% care of 7 children and 25% care of one other child.[4] This was an error on Centrelink’s part.
[4] Exhibit 2, Secretary’s Statement of Facts, Issues and Contentions dated 12 December 2017, Attachment A,
Centrelink notice dated 16 June 2013.
Other Centrelink notices sent to Ms Hockey after 16 June 2016 all showed that the percentage care upon which Ms Hockey’s FTB was being calculated was 100%.[5]
[5] Exhibit 2, Secretary’s Statement of Facts, Issues and Contentions dated 12 December 2017, Attachment A,
pages 11-63, Centrelink notices dated 1 July 2013, 15 July 2013, 16 September 2013, 28 November 2013, 3 February 2014, 4 February 2014, 3 March 2014, 6 July 2014, 6 September 2014, 1 December 2014, 26 April 2015, 25 May 2015, 22 June 2015, 28 June 2016, 8 August 2015; Exhibit 1, T Documents, T5, pages 37-39, Centrelink notice dated 31 October 2015; Exhibit 1, T Documents, T7, pages 42-44, Centrelink notice dated 31 December 2015; Exhibit 1, T Documents, T8, pages 45-47, Centrelink notice dated 4 January 2016; T9, pages 48-50, Centrelink notice dated 6 January 2016; and 19 January 2016
On 5 November 2015 Ms Hockey received a Centrelink statement which indicated that her CCR (for the period 6 July 2015 – 4 October 2015) was being calculated on the basis that she had 3 children in child care.[6]
[6] Exhibit 1, T Documents, T6, pages 40-41, Centrelink notice dated 5 November 2015.
On 31 December 2015 Ms Hockey advised Centrelink via her online account that she had separated from her partner and was no longer caring for her 5 step children.
On 18 January 2016 Ms Hockey lodged a claim confirming that she had separated from her husband on 31 December 2015 and that she no longer had any care of her 5 stepchildren.[7]
[7] Exhibit 1, T Documents, T10, pages 51-56, Claim dated 18 January 2016.
On 19 January 2016 Ms Hockey received a Centrelink statement which indicated that her FTB was still being calculated on the basis that she had 100% care of 6 children, 50% care of one child and 25% care of one other child.[8]
[8] Exhibit 1, T Documents, T11, pages 57-59, Centrelink notice dated 19 January 2016.
On 21 January 2016 Ms Hockey received a Centrelink statement which indicated that her CCR was being calculated on the basis that she had 3 children in child care between 5 October 2015 and 3 January 2016.[9]
[9] Exhibit 1, T Documents, T12, pages 60-61, Centrelink notice dated 21 January 2016.
On 27 January 2016 Ms Hockey received a Centrelink statement which indicated that she had been assessed as being entitled to the maximum rate of CCB for the 3 children in child care.[10]
[10] Exhibit 1, T Documents, T13, pages 62-64, Centrelink notice dated 27 January 2016.
On 28 January 2016 Ms Hockey received Centrelink statements which indicated that Centrelink had determined she had been overpaid:
(a)FTB in the 2012-2013 financial year and raised a FTB debt in the amount of $3,868.09 (FTB Debt 2012-2013);[11]
(b)FTB in the 2013-2014 financial year and raised a FTB debt in the amount of $13,943 (FTB Debt 2013-2014);[12]
(c)FTB in the 2014-2015 financial year and raised a FTB debt in the amount of $14,808.10 (FTB Debt 2014-2015);[13]
(d)Schoolkids Bonus in the 2012-2013 financial year and raised a SKB debt in the amount of $497.50 (SKB Debt 2012-2013);[14]
(e)Schoolkids Bonus in the 2013-2014 financial year and raised a SKB debt in the amount of $1,025 (SKB Debt 2013-2014);[15]
(f)Schoolkids Bonus in the 2014-2015 financial year and raised a SKB debt in the amount of $1,264 (SKB Debt 2014-2015);[16]
[11]         Exhibit 1, T Documents, T14, pages 65-68, Centrelink notice dated 28 January 2016.
[12]         Exhibit 1, T Documents, T18, pages 77-80, Centrelink notice dated 28 January 2016.
[13]         Exhibit 1, T Documents, T15, pages 69-72, Centrelink notice dated 28 January 2016.
[14]         Exhibit 1, T Documents, T19, pages 81-82, Centrelink notice dated 28 January 2016.
[15]         Exhibit 1, T Documents, T16, pages 73-74, Centrelink notice dated 28 January 2016.
[16]         Exhibit 1, T Documents, T17, pages 75-76, Centrelink notice dated 28 January 2016.
On 28 January 2016 Ms Hockey also received a Centrelink statement which indicated that her FTB would be subsequently calculated on the basis that she had 100% care of 2 children (not 6), 50% care of 5 children and 25% care of one other child.[17]
[17] Exhibit 1, T Documents, T20, pages 83-85, Centrelink notice dated 28 January 2016.
On 1 February 2016, 2 February 2016 and 5 February 2016 Ms Hockey also received a Centrelink statement which indicated that her FTB was now going to be calculated on the basis that she had 100% care of 2 children, 50% care of 5 children and 25% care of one other child.[18]
[18] Exhibit 1, T Documents, T21, pages 86-88, Centrelink notice dated 1 February 2016; T22, pages 89-91,
Centrelink notice dated 2 February 2016; T23, pages 92-94, Centrelink notice dated 5 February 2016
On 5 February 2016 Centrelink wrote to Ms Hockey noting that one of her children was about to turn 16 and requesting information be provided within 13 weeks if that child was not continuing as a full time secondary student.[19]
[19] Exhibit 1, T Documents, T24, pages 95-96, Centrelink notice dated 5 February 2016.
On 15 February 2016 Ms Hockey received notices from Centrelink which indicated that Centrelink had determined she had been overpaid:
(a)FTB for the period 1 July 2015 to 1 January 2016 because the shared care of one child had not been taken into account and therefore raised a FTB debt in the amount of $1,574.85 (FTB Debt 2015-2016);[20]
(b)SKB in the 2015-2016 financial year and raised a SKB debt in the amount of $643 (SKB Debt 2015-2016);[21] and
(c)FTB for the period 1 July 2015 to 15 January 2016 because the shared care of four children had not been taken into account and therefore raised a FTB debt in the amount of $5,602.07 (FTB Debt2 2015-2016).[22]
[20]         Exhibit 1, T Documents, T25, pages 97-98, Centrelink notice dated 15 February 2016.
[21]         Exhibit 1, T Documents, T26, pages 99-100, Centrelink notice dated 15 February 2016.
[22]         Exhibit 1, T Documents, T27, pages 101-102, Centrelink notice dated 15 February 2016.
Ms Hockey sought a review of Centrelink’s decision to raise the Debts by an Authorised Review Officer (“ARO”) on the grounds that she notified Centrelink on time of the changes in the care of her stepchildren and because she was not partnered when the original change in care occurred.[23] The appeal to the ARO was unsuccessful. The ARO found that the Debts had not been raised incorrectly and that no “special circumstances” existed to waive the debts.[24]
[23] Exhibit 1, T Documents, T28, page 103, Decision of Authorised Review Officer dated 22 February 2016.
[24] Exhibit 1, T Documents, T28, pages 103–108, Decision of Authorised Review Officer and notes dated 22
February 2016.
On 30 May 2016, Ms Hockey received notices from Centrelink which indicated that Centrelink had determined she had been overpaid:[25]
(a)SKB debt in the amount of $857 (Debt ID 95490094); and
(b)FTB debt in the amount of $2,034.54 (Debt ID 95490093).
[25] Exhibit 1, T Documents,T34, pp 150 and T33, pp 148
Ms Hockey sought a review of Centrelink’s decision to raise the May Debts by an Authorised Review Officer (“ARO”). The ARO affirmed the decisions.[26]
[26] Exhibit 1, T Documents, T 35, pages 152-8
Ms Hockey then lodged an application for review with the Social Services and Child Support Division (“SSCSD”) of this Tribunal.[27] The SSCSD found that although the excess payments were made as a result of sole administrative error, Ms Hockey had not received the excess payments “in good faith” and affirmed the ARO’s decision on 16 December 2016.[28]
[27] Exhibit 1, T Documents, T36, pages 59-160, Letter from AAT to Centrelink dated 22 September 2016..
[28] Exhibit 1, T Documents, T2, pages 5-14, SSCSD’s Decision and Reasons for Decision dated 16 December 2016.
Ms Hockey has sought a review of the SSCSD’s decision by this Tribunal.
The total of the debts raised by Centrelink against Ms Hockey is $44,721.23 (“Debts”).
ISSUES FOR DETERMINATION
The issues for determination are whether:
(a)Ms Hockey has been overpaid her entitlements to FTB and SKB;
(b)the Debts are recoverable; and, if yes
(c)the Debts should be written off; or
(d)the Debts should be waived due to administrative error; or
(e)“special circumstances” exist such that the Debts should be waived.
WAS Ms Hockey OVERPAID FTB PAYMENTS?
Pursuant to section 59 of the A New Tax System (Family Assistance) Act 1999 (the Act) where the Secretary has determined an individual's percentage of care of a child to be at least 35% and not more than 65%, the person's shared care percentage is as set out in subsection 59(2) of the Act, which provides:
(2)      The individual's shared care percentage for the FTB child is the relevant percentage specified in column 2 of the table.

Shared care percentages
Item          Column 1  Column 2
Individual's percentage of care    Shared care percentage
1             35% to less than 48%                  25% plus 2% for each
percentage point over 35%
2              48% to 52%  50%
------------------------------------------------------------------------------------------
3              more than 52% to 65%                51% plus 2% for each
percentage point over 53%
Throughout the Debt Period, Ms Hockey was receiving FTB and SKB entitlements calculated on the basis that she had 100% care of her 5 stepchildren, when she only had 50% shared care of those children. Centrelink did not correct its records to reflect the fact that Ms Hockey only had 50% care of her stepchildren since 16 February 2013 until 4 January 2016. As a result, between June 2013 and January 2016, the FTB and SKB benefits Ms Hockey received were in excess of her actual entitlement.
Section 71 of the A New Tax System (Family Assistance) Administration Act 1999 (Cth)
(“Administration Act”) provides that overpaid FTB debts are debts due to the Commonwealth.
The Secretary submits that the excess payments are therefore debts due to the Commonwealth and that the Debts have been calculated correctly.[29]
[29] Exhibit 2, Secretary’s Statement of Facts, Issues and Contentions dated 12 December 2017, paras 27-28.
It is not in dispute that Centrelink calculated the Debts in accordance with the Act.
The Tribunal finds therefore that Ms Hockey owes the Debts to the Commonwealth.
ARE the debtS RECOVERABLE?
Even if a debt is owed, the Secretary may write off, or waive, a debt in certain circumstances set out in sections 95, 97 and 101 of the Administration Act.
Should the Debts Be Written Off?
Section 95 of the Administration Act provides relevantly:
95 Secretary may write off debt
(1) The Secretary may, on behalf of the Commonwealth, decide to write off a debt for a stated period or otherwise, but only if subsection (2), (4A) or (4B) applies.
Secretary may write off debt if debt irrecoverable or debt will not be repaid etc.
(2) The Secretary may decide to write off a debt under subsection (1) if:
(a) the debt is irrecoverable at law; or
(b) the debtor has no capacity to repay the debt; or
…
(d)it is not cost effective for the Commonwealth to take action to
recover the debt.
(3) For the purposes of paragraph (2)(a), a debt is taken to be irrecoverable at law if, and only if:
(b)there is no proof of the debt capable of sustaining legal proceedings for its recovery; or
…
(4) 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; 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(2)(a);
the person is taken to have a capacity to repay the debt unless recovery by those means would cause the person severe financial hardship.
A debt is taken to be irrecoverable at law if, and only if, there is no proof of the debt capable of sustaining legal proceedings for its recovery: section 95(3) of the Administration Act.
If a debt is recoverable by means of (section 95(4) of the Administration Act):
(a)deductions under section 84 of the Family Assistance Act; or
(b)deductions under section 1231 of the Social Security Act 1991; or
(c)setting off under section 84A Family Assistance Act; or
(d)application of an income tax refund under section 87 Family Assistance Act; or
(e)setting off under section 87A Family Assistance Act against a payment referred to in paragraph 82(2)(a);
the person is taken to have a capacity to repay the debt unless recovery by those means would cause the person severe financial hardship.
(my emphasis)
Is the debt irrecoverable at law? (section 95(3), Administration Act)
None of the circumstances set out in section 95(3) of the Administration Act exists in this case and therefore I find the debt is not irrecoverable at law.
Does Ms Hockey have the capacity to repay the debt? (section 95(4), Administration Act)
If a debt is recoverable by means of deductions from social security payments, income tax refunds or family assistance payments, the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship.
The issue is whether Ms Hockey is suffering from “severe financial hardship”.
Ms Hockey has been repaying the debt by way of fortnightly deductions of $15.00 from her current FTB payments.[30]
[30] Exhibit 2, Secretary’s Statement of Facts, Issues and Contentions dated 12 December 2017, para 31.
At the hearing, Ms Hockey submitted that she was suffering from financial hardship. However, she told the Tribunal that she had “enough [money] to live on”. Ms Hockey is currently in receipt of the parenting payment and FTB.[31] Ms Hockey said:[32]
·her current income is $880/fortnight
·she receives Centrelink benefits of $1100/fortnight
·she is repaying the Debts by way of $15/fortnight
·she is the sole provider for 2 children
·her income varies
·her expenses, as at 31 October 2017, were approximately $1,893/fortnight
·Mr Hockey makes no contribution towards repayment of the Debts
[31] Exhibit 2, Secretary’s Statement of Facts, Issues and Contentions dated 12 December 2017, para 31
[32] Exhibit 4, Financial Statement prepared by Ms Hockey as at 31 October 2017.
The Secretary submits that Ms Hockey is not suffering from severe financial hardship and has a clear capacity to repay the debt by instalments.[33] Other Tribunal decisions have determined that severe financial hardship needs to involve severe or extreme financial suffering and that a person’s entire financial position would need to be materially less than the current rate of their pension.[34]
[33] Exhibit 2, Secretary’s Statement of Facts, Issues and Contentions dated 12 December 2017, para 31.
[34] Re Lumsden and Secretary, Department of Social Security [1986] AATA 228; Stubbs and Secretary, Department
of Family and Community Services [2003] AATA 729; L and Department of Social Security [1995] AATA 159;
Secretary, Department of Family and Community Services and Birgden [2003] AATA 67.
The Secretary also referred to the Guide to Social Security Law (“the Guide”) which is used by Centrelink in interpreting and administering the Act. The Tribunal is not bound to apply the Guide but it may, and it should, apply it in exercising its discretion unless it is unlawful or “tends to produce an unjust decision”.[35]
[35] Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 645.

The Guide sets out in section 1.1.S.45 that:
For the purpose of considering a waiver or a write-off, or reducing or suspending recovery of an FTB advance a person would be subject to severe financial hardship if their net fortnightly income (after reasonable expenses are deducted from gross income) over the debt repayment period (for both debts and advance recovery) would be less than the minimum fortnightly amount the person would be allowed to repay under the flexible repayment arrangements for FA debts.
Based on the Guide, Ms Hockey would not be found to be suffering from severe financial hardship.
There is no evidence that Ms Hockey does not have the capacity to repay the Debts or suffers from severe financial hardship.
Therefore there is no basis for the FTB Debts to be written off pursuant to section 95(2)(b) of the Administration Act.
Is it cost-effective for the Commonwealth to recover the debt?( section 95(2)(d), Administration Act)
There is no indication from the Secretary that it is not cost-effective for it to recover the debt.
Should the debts be written off?
There is no basis for the FTB Debts to be written off under section 95 of the Administration Act.
SHOULD THE FTB DEBTS BE WAIVED DUE TO ADMINISTRATIVE ERROR (SECTION 97, ADMINISTRATION ACT)
The Secretary must also 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: section 97 of the Administration Act.
The debt “must be "attributable solely" to an administrative error. It is not enough that, in the absence of administrative error, the debt would not have arisen. Administrative error must be the sole cause, not merely one of multiple causes”: Secretary, Department of Family & Community Services v Sekhon[2003] FCA 76, per Wilcox J (at [41]) and on appeal to the Full Federal Court Sekhon v Secretary, Department of Family and Community Services[2003] FCAFC 190, at [23].
The Secretary explained that the Debts arose because of a computer error within Centrelink that converted Ms Hockey’s care percentage of her stepchildren from 50% to 100% from 8 June 2013. The Secretary accepts that the Debts are attributable solely to administrative error.[36] However, the Secretary submits that Ms Hockey did not receive her payments “in good faith” and therefore the Debts cannot be waived under section 97 of the Administration Act.
What is meant by “in good faith”?
[36] Exhibit 2, Secretary’s Statement of Facts, Issues and Contentions dated 12 December 2017, para 36.
The phrase “in good faith” is not defined in the legislation. However, the phrase has been considered by the Federal Court on numerous occasions. The Federal Court has held that:
(a)whether a payment has been received “in good faith” is determined by considering the state of mind of the recipient and is a subjective test;[37]
(b)“Wilful blindness is itself a state of mind”;[38] and
(c)the words "good faith" should be given their ordinary meaning.[39]
[37]         Pledger v Secretary, Department of Family & Community Services[2002] FCA 1576, at [59].
[38]         Pereira v Director of Public Prosecutions (1988) 82 ALR 217 at 219-220.
[39]         Pledger v Secretary, Department of Family & Community Services[2002] FCA 1576, at [103].
In Haggerty v Department of Education, Training and Youth Affairs (2000) 31 AAR 529 French J (as he then was) described when a lack of good faith will arise as follows:
[16] … want of good faith will arise where there is a positive belief that the payment has been made by mistake. It will also arise where there is a suspicion held by the recipient that he or she may not be entitled to the payment made or a doubt as to the entitlement coupled with some objective basis for such suspicion or doubt. The provision does not, however, authorise the imputation of want of good faith in any of the senses above described simply because there are in existence objective facts which would raise a belief or a doubt or a suspicion of non entitlement in the mind of some imaginary recipient. (emphasis added)
In Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484 (“Jazazievska”) Cooper J said:[40]
…a person does not act in good faith where the person turns a blind eye to circumstances which raise doubt as to the entitlement of the person to receive and retain the payment or refuses to make reasonable inquiries where doubt exists...
[40] [2000] FCA 1484, at [41].
In Jazazievska Ms Jazazievska had been overpaid family payments. The issue was whether she had received those payments in good faith. The evidence indicated that Ms Jazazievska had sufficient doubt as to the amount of entitlement she had received that she asked her bank about it. However, she did not query Centrelink directly. Cooper J found that this meant that she did not receive and retain the payments in good faith because she did not have an honest belief that she was entitled to receive and retain the payment.[41]
Did Ms Hockey receive the FTB and SKB payments in good faith?
[41] [2000] FCA 1484, at [44].
Ms Hockey commenced receiving FTB for her step children from 12 March 2013 at 50% but from 8 June 2013 at 100%. A computer system error converted the care percentage from 50% to 100%.
Ms Hockey stated in her written submissions that:[42]
'On July 1/2013, I contacted Centrelink to query a sum of money that had been deposited in to my account and the change in care percentage as reflected on the letters. My call was concerning what the arrears were for and why the percentage of care in the letters was showing now as 100% for ALL children, where it previously it had not reflected a percentage of care for child A and child B. I questioned why the percentage of care was showing as 100% for the Hockey children when we did not have care of them for that percentage of time.
The operator I spoke to informed me that the payments were correct as far as she was able to tell and that the screen she was looking at reflected a 50% care allocation to the five Hockey children. (Refer attached document of notes taken whilst on the call to the operator) She informed me that she would "escalate the call" to an investigation and if I did not hear back from anyone "assume everything is correct".
David [Hockey] witnessed the phone conversation.
[42] Exhibit 4, Statement of Ms Hockey dated 31 October 2017.
The Secretary contends that the payments were not received in good faith because:[43]
(a)although she told the SSCSD that “she had contacted Centrelink at least half a dozen times” in respect of the care percentages, there is no documentary evidence that she did so even though she continued to receive the Centrelink notices referred in paragraph 8 above; and
(b)although there is a file note dated 1 July 2013 which records Ms Hockey's query in relation to an arrears payment and an increase in the rate of payment, it is more likely that she was querying changes to her payment resulting from a notice sent by Centrelink on 16 June 2013 advising Ms Hockey that from 1 July 2013 she would receive extra money from the Australian Government as part of the Household Assistance Package.[44]
[43] Exhibit 2, Secretary’s Statement of Facts, Issues and Contentions dated 12 December 2017, paras 37-45.
[44] Exhibit 2, Secretary’s Statement of Facts, Issues and Contentions dated 12 December 2017, Attachment A, page
10.
The Secretary also noted in written submissions that Mr Hockey was employed at this time and therefore unlikely to have been present to witness the telephone conversation as attested to by Ms Hockey.[45]
[45] Exhibit 2, Secretary’s Statement of Facts, Issues and Contentions dated 12 December 2017, para 44.
Mr Hockey’s written statement makes no specific reference to his witnessing the telephone conversation of 1 July 2013.[46] Mr Hockey gave evidence before the Tribunal that he was in the vicinity of the phone call that Ms Hockey made to Centrelink on 1 July 2013 and could hear what Ms Hockey was saying but could not hear what the Centrelink officer said. He says he was not there every time Ms Hockey telephoned Centrelink but he assumed that what she told him was correct. Mr Hockey says he would have been there on that day because, although he was employed as a school chaplain, 1 July 2013 was a school holiday period and he did not work on Mondays. The Tribunal accepts Mr Hockey’s evidence and notes that 1 July 2013 was a Monday, therefore it is accepted that Mr Hockey was present when Ms Hockey made the telephone call of 1 July 2013 but it is also noted that he is unable to confirm what the Centrelink officer said to Ms Hockey.
[46] Exhibit 4, Affidavit of David Hockey dated 31 October 2017.
Ms Hockey also states in her written submissions that: [47]
We did not hear anything further from Centrelink following my call to them and my concerns about the percentage of care issues and so, at this point, we assumed that there was some sort of glitch in their system that was reflecting an incorrect percentage of care on my letters (as stated in the initial call) and that, as the screens that the officers worked off reflected the accurate percentage of care (i.e. 50%) that we simply carried on as normal.
At this point, I am now aware that I should have pursued the matter further, however back then I trusted Centrelink to handle my information correctly and so trusted that we were being paid correctly following my call. I did not understand the increase, however I had not, at any stage, informed Centrelink that the percentage of care had changed for the children, nor had David, and so we felt confident that all things were well with our payments.
Centrelink's assertion that they sent me a number of letters reflecting a different percentage of care is correct, but that is also working on the assumption that I a) received and opened all letters (which I did not) and b) that I had not had the phone call on July 1/2013 where I was assured that the screen reflected 50% care. This is also not taking into consideration that my access of the online system did not reflect a change in care percentage and my phone calls to Centrelink to update other details including a confirmation of my information that was reflected on their screen, including our address details, rent paid, and child care percentages.
It is clear, by their own admission, that the overpayments were due solely to an administrative error. I received the payments in GOOD FAITH based on the phone call I made to Centrelink on July 1/2013 and the failure of Centrelink to a) inform me that there was a system error occurring that was resulting in overpayments in step parent situations (P24845) and b) the lack of any follow up communication from Centrelink informing me that the payments were not correct. (See attached Statutory Declaration)
Centrelink did not adequately follow up on my concerns, as raised in my initial phone call, nor did they investigate my account in October 2013 when there was a clear directive as to there being a system wide error occurring in cases that involved a step parent family. This then resulted in a significant debt being attributed to my account, however that debt was not raised within the timeframes set under the Social Security Act, where a debt arises from an error made by Centrelink and is received in good faith.
I trusted Centrelink to handle my information correctly and assumed that the payments were correct. At no time did I supply erroneous information or attempt to defraud the payment system, and so it is on this basis that I make it clear that actions were in good faith and honest in their approach.
[47] Exhibit 4, Statement of Ms Hockey dated 31 October 2017.
At the hearing Ms Hockey confirmed that she contacted Centrelink on 1 July 2013 when she received the Centrelink notice dated 16 June 2013 because the amount of FTB indicated in the notice had increased to that received previously. The Tribunal notes that the Centrelink notices dated 26 March 2013 and 6 April 2013 indicate a FTB part A amount payable of $789.04 whereas the notice of 16 June 2013 provides for a FTB part A amount payable of $1257.20.[48]
[48] Exhibit 2, Secretary’s Statement of Facts, Issues and Contentions dated 12 December 2017, Attachment A,
Centrelink notices dated 26 March 2013, 6 April 2013, and 16 June 2013.
Ms Hockey said that the Centrelink officer she spoke to told her that the amount shown on the 16 June 2013 notice was the correct amount she was entitled to based on a percentage care of 50% for her 5 stepchildren. That is, although the notice indicated the FTB amount was calculated on the basis of a 100% percentage care, it had in fact been calculated on the basis of a 50% percentage care. Ms Hockey said the Centrelink officer told her that the system showed it was being calculated on the basis of a 50% percentage care. Ms Hockey also points to the fact that the Customer Record Access Monitor Reports (“CRAM reports”) show that Centrelink officers accessed Ms Hockey’s account after that telephone call.[49]
[49] Exhibit 3, CRAM Reports pages 168-198.
The Tribunal was taken to the CRAM reports and notes that they indicate that on 1 July 2013 Ms Hockey contacted Centrelink via telephone at approximately 10:52AM regarding, among other things, the “FTB increase”.[50]
[50] Exhibit 3, CRAM reports, page 8.
Centrelink has accepted the error was made by it. The Tribunal notes that Ms Hockey had provided Centrelink with correct information on claiming FTB and followed up with Centrelink promptly upon becoming concerned regarding the correctness of the information contained in the 16 June 2013 notice.
Ms Hockey says that when she contacted Centrelink regarding changes in childcare she would always confirm the details that Centrelink had on its system and was told that 50% percentage shared care of her stepchildren was what was indicated.
The Tribunal notes that the CRAM records do not contain full details of all information discussed between Ms Hockey and the Centrelink officers throughout the period concerned. However, Ms Hockey says that the fact that the records indicates that she was contacting regarding “general enquiries” is an indication of her having confirmed the details Centrelink had were correct.[51]
[51] For example, see Exhibit 3, Archived file notes dated 12 February 2014, 27 May 2014, 19 January 2015.
The Tribunal sees no reason to doubt Ms Hockey’s evidence. The CRAM records certainly indicate that Ms Hockey had regular contact with Centrelink throughout the relevant period regularly providing Centrelink with information of her income, her partner’s income and information regarding whether her children were attending school.[52] The Tribunal also finds that Ms Hockey was unwavering in her evidence regarding her discussions with Centrelink and notes that it seems unlikely to this Tribunal that someone who had such regular contact with Centrelink providing requisite information necessary for Centrelink to calculate her FTB, parenting payment, schoolkid bonus, childcare benefit and childcare rebate would purposely neglect to ensure that her FTB was being calculated correctly. That would seem out of character. The Tribunal finds this so particularly given the fact that the records confirm Ms Hockey’s evidence that she immediately contacted Centrelink as soon as she received the first notice showing the incorrect percentage of care for her stepchildren.
[52] For example, see Exhibit 3, Archived file notes dated 18 July 2014, 7 August 2014, 9 January 2015, 27 May 2014,
11 May 2014, 4 February 2014, 29 January 2014, 14 October 2013, 1 October 2013, 15 July 2013 and 3 June 2013.
While the Tribunal notes the Secretary’s submission that the evidence that is available does not fully corroborate Ms Hockey’s evidence, there is certainly no evidence to contradict it.
Further, the ARO’s response to an enquiry by the SSCSD concerning whether Centrelink’s system would show 50% care while generating letters showing 100% care was as follows:
The computer system access by staff, over the period of time related to the debts, showed 50% care for their father and 50% care for their mother. It was not recorded with the 50% care re the stepmother which was required to be recorded for the care to be correctly assessed for FTB purposes. This caused the customer, the stepmother, to be sent letters showing 100% care and for her to be paid FTB on the basis of 100% care.[53]
As the customer contacted to query receiving letters which said that her FTB was paid based on 100% care of the children this should prompt of the officer contacted to investigate further due to the discrepancy between the care percentage displayed on screens, the letters issued to the customer and the amount of FTB paid to the customer.[54]
[53] Exhibit 1, T documents, T 37, page 162, ARO's response to the SSCSD’s question dated 2 December 2016.
[54] Exhibit 1, T documents, T 37, page 164, ARO's response to the SSCSD’s question dated 13 December 2016.
Despite the SSCSD specifically asking for clarification about what exactly an officer would have seen on screen in relation to Ms Hockey, the ARO did not specifically say one way or the other. It would be impossible for the ARO to do so given the lapse of time.
When Ms Hockey first became aware of the Debts in January 2016 she contacted Centrelink and gave the same information then as she does now.[55]
[55] Exhibit 1, T Documents, T39, page 170, Centrelink records.
The Tribunal also notes a Centrelink’s officer’s record of a telephone conversation with Ms Hockey on 14 September 2016 which says he/she spoke to Ms Hockey and said “it looked more like it was coded as 50% but due to system issues was paid at 100%”.[56] This is consistent with Ms Hockey’s evidence that when she telephoned Centrelink on 1 July 2013 she was told the system indicated it was showing her percentage care as 50%.
[56] Exhibit 1, T Documents, T39, page 193, Centrelink records.
The Tribunal accepts Ms Hockey’s evidence that she was informed that her FTB had been calculated correctly. The SSCSD Member found that although the records indicate that Ms Hockey’s telephone call of 1 July 2013 had to be transferred to a more experienced officer, that there is no record of the subsequent conversation and that it was “implausible that an appropriately trained officer would not have created a record of the conversation”. The Tribunal disagrees that is implausible that a record was not kept particularly given that the reason the debts have arisen is solely due to errors made by Centrelink.
Given there is no evidence to suggest that Ms Hockey has been anything but upfront with Centrelink about her situation and regularly provided accurate information, this Tribunal does not understand the basis for the SSCSD determination that Ms Hockey’s evidence was unbelievable. After all, Centrelink has acknowledged this error was of their sole making.
There is no evidence that Ms Hockey turned a “blind eye”, nor did she fail to make timely enquiries of Centrelink. Her situation is distinguishable from Jazazievska.
Keeping in mind that whether a payment has been received “in good faith” is determined by considering the state of mind of the recipient and is a subjective test,[57] not an objective test, the Tribunal finds:
(a)the Debts arose due to a reconciliation by Centrelink of the amounts paid to Ms Hockey during a time when she was not eligible to receive those payments;
(b)the Debts arose solely from, or in relation to, administrative error; and
(c)Ms Hockey received the payments “in good faith”.
[57] Pledger v Secretary, Department of Family & Community Services[2002] FCA 1576, at [59].

Accordingly, the Tribunal finds that the Debts ought to be waived under section 97 of the Administration Act.
CONCLUSION
The decision under review is set aside and is substituted with a decision that the FTB and SKB Debts should be written off pursuant to section 97 of the Administration Act.

I certify that the preceding 78 (seventy-eight) paragraphs are a true copy of the reasons for the decision herein of Member D K Grigg

............................[SGD]............................................
Associate
Dated: 20 April 2018

Date of hearing: 26 February 2018

Date final submissions received: 22 March 2018

Applicant: In person

Advocate for the Respondent: Jasmine Forsyth, Senior Government Solicitor

Solicitors for the Respondent: Department of Human Services

[2018] AATA 978

20 April 2018

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Procedural Fairness

Remedies

Statutory Construction

Standing

Date of hearing:	26 February 2018
Date final submissions received:	22 March 2018
Applicant:	In person
Advocate for the Respondent:	Jasmine Forsyth, Senior Government Solicitor
Solicitors for the Respondent:	Department of Human Services