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

Huntly and Secretary, Department of Social Services (Social services second review) [2021] AATA 3979 (29 October 2021)
Division:GENERAL DIVISION
File Number: 2020/5614
Re:Pamela Huntly
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Member Dr J Henderson
Date:29 October 2021
Place:Perth

The Reviewable Decision, being the AAT1 Decision, dated 7 September 2020, is set aside.
The Tribunal substitutes a new decision that the whole of the debt for the periods 5 July 2016 to 12 September 2016 and 13 September 2016 to 8 October 2018 is a debt due to the Commonwealth and is recoverable.
................[Sgd]........................................................
Member Dr J Henderson
CATCHWORDS
SOCIAL SECURITY – pensions, allowances, benefits – whether Applicant was overpaid newstart allowance during relevant period – whether Applicant was overpaid parenting payment (partnered) during relevant period – whether overpayment constitutes a legally recoverable debt – whether write off or waiver provisions apply – sole administrative error not established – special circumstances not established – Applicant found to have intentionally misled Centrelink – Reviewable Decision set aside and substituted
LEGISLATION
Social Security (Administration) Act 1999 (Cth) s 68(2)
Social Security Act 1991 (Cth) ss 1223(1), 1236, 1236(1), 1236(1A), 1236(1B), 1236(1C), 1237A(1), 1237AAD, ch 5 pt 5.4
CASES
Chapman and Secretary to the Department of Family and Community Services (2003) 74 ALD 501
Coral Ann Moss and Secretary, Department of Social Security [1995] AATA 242
Dranichnikov v Centrelink (2003) 75 ALD 134
Gerhardt and Secretary, Department of Employment, Education and Training [1996] AATA 173
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Klaverstyn and Secretary, Department of Family and Community Services [2003] AATA 71
Re Feneley and Secretary, Department of Family and Community Services (2003) 74 ALD 585
Re Lumsden and Secretary Department of Social Security [1986] AATA 228
Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267
Secretary, Department of Family & Community Services v Sekhon (2003) 73 ALD 41
Secretary, Department of Family and Community Services and Birgden (2003) 36 AAR 374
SECONDARY MATERIALS
Guide to Social Security Law paras 6.7.3.10, 6.7.3.20
REASONS FOR DECISION
Member Dr J Henderson
29 October 2021
INTRODUCTION
The decision under review is a decision of the Social Services & Child Support Division (AAT1) of the Administrative Appeals Tribunal dated 7 September 2020 (Reviewable Decision), in relation to an overpayment of parenting payment (partnered) (PPP) and newstart allowance (NSA) (now known as ‘jobseeker payment’) received by the Applicant.
The AAT1 decision set aside an earlier decision of an Authorised Review Officer (ARO) of Services Australia (Centrelink) and substituted the decision that (T2):
for the period prior to 14 September 2016, Miss Huntly received overpayments but that due to Centrelink’s administrative error, the resulting debt is to be waived. The tribunal also finds that for the period from 14 September 2016, Miss Huntly received overpayments and that they are recoverable.
This Tribunal heard the matter on 30 June 2021 by telephone. The Applicant appeared on her own behalf, and Ms Hannigan of Services Australia appeared for the Respondent.
FACTS
On 26 April 2016, the Applicant lodged a claim for NSA (R2/attachment 1, page 1).
On 23 May 2016, Centrelink sent the Applicant a notice confirming regular payment of NSA from 7 June 2016 (T4/130). The notice included a requirement under s 68(2) of the Social Security (Administration) Act 1999 (Cth) (the Administration Act) for the Applicant to advise of any earnings for herself or her partner from employment.
The notice included the following information about how her payment was calculated:
Information used for calculating your regular payment
Total Fortnightly Income ………………………………………………………… $0.01
(Original emphasis.)
The Applicant subsequently contacted Centrelink on a fortnightly basis, as required by the reporting arrangements in place (T16/563; T16/558–9). Centrelink says that she reported nil income (Respondent’s SFIC at [6]).
On 16 August 2016, the Applicant lodged a claim for PPP (PPP Application) (R2/Attachment 2, page 7).
On 14 September 2016, Centrelink issued a notice to the Applicant telling her that her NSA had been cancelled from 13 September 2016 because she may have been eligible to receive another payment which was more appropriate to her circumstances (T6/267).
On 14 September 2016, Centrelink issued a notice to the Applicant confirming a grant of parenting payment from 13 September 2016 (T6/269). The notice included a requirement under s 68(2) of the Administration Act for the Applicant to advise of any earnings for herself or her partner from employment.
Centrelink issued the Applicant with eight further notices during the debt period, all including a requirement under s 68(2) of the Administration Act for the Applicant to advise of any earnings for herself or her partner from employment. The notices also advised the Applicant that her PPP was being calculated, relevantly, on the basis that her partner’s fortnightly earned income was $0.00 (T6/274, 285, 289, 327, 330, 333, 336, 339).
On 1 January 2017, the Applicant provided an estimate of her adjusted taxable income for a family tax benefit (FTB) for the financial year 2016/2017, which stated her taxable income to be $20,000 and her partner’s to be $52,000 (R2/Attachment 3, page 12).
On 24 April 2018, the Applicant provided an estimate of her adjusted taxable income for FTB for the financial year 2017/2018, that stated her taxable income to be $13,000 and her partner’s to be $76,000 (R2/Attachment 4, page 13).
On 21 September 2018, the Applicant provided an estimate of her adjusted taxable income for FTB for the financial year 2018/2019, that stated her taxable income to be $13,000 and her partner’s to be $84,000 (R2/Attachment 5, page 14).
On 26 September 2018, Centrelink issued the Applicant a notice asking her to confirm or update her earnings and her partner’s earnings by 8 October 2018 (T6/417).
On 4 October 2018, the Applicant provided to Centrelink her partner’s payslips from Ranger Holdings for the period 29 July 2016 to 6 September 2019 (T5/139; T9/436).
On 29 January 2019, Centrelink raised a PPP debt of $13,186.83 for the period
26 September 2017 to 8 October 2018 (Original Decision) (T7/430; T9/434).
On 30 January 2020, following a request for review, an ARO varied the Original Decision so that the Applicant had an NSA debt of $2,421.50 for the period 5 July 2016 to
12 September 2016 and a PPP debt of $26,387.53 for the period 13 September 2016 to
8 October 2018 (ARO Decision) (T9/436–437).
On 23 July 2020, the Applicant lodged an application for review of the ARO Decision with the AAT1 (T13/454).
In the Reviewable Decision dated 7 September 2020, the AAT1 set aside the ARO’s decision and decided that, although the Applicant had an NSA debt of $2,421.50 for the period 5 July 2016 to 12 September 2016 and a PPP debt of $26,387.53 for the period
13 September 2016 to 8 October 2018, recovery of the debt prior to 14 September 2016 was waived, because that portion of the debt was due to the sole administrative error of the Respondent.
On 15 September 2020, the Applicant lodged an application for review of the Reviewable Decision in the General Division of the Administrative Appeals Tribunal (AAT2) (T1/1).
On 28 September 2020, Centrelink implemented the AAT1 decision, resulting in a waiver of $2,456.09 from the debt (R2/Attachment 6, page 15).
ISSUES
It is conceded by the Applicant that she was overpaid both NSA and PPP in the relevant periods because her partner’s correct income was not taken into account in the Respondent’s calculations (transcript/8).
The issue to be decided in this application is therefore limited to whether there are any grounds to write off or waive recovery of either or both of the debts.
LEGISLATION
The relevant law relating to NSA and PPP is contained in the Social Security Act 1991 (Cth) (the Act) and the Administration Act. The relevant policy is contained in the Guide to Social Security Law (the Guide), which the Tribunal will apply unless there are cogent reasons for departing from it (Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634).
NSA is the main income support payment for people while they are unemployed and looking for work. In order to receive NSA, a person must be at least 22 years of age; looking for paid work; under the income and assets test limits; and, prepared to meet mutual obligation requirements.
PPP is the main income support payment for a young child’s main carer. In order to receive PPP a person must, among other requirements, be under the income and asset test limits and meet principal carer rules.
Creation of debt
Section 1223(1) of the Act states:
(1)Subject to this section, if:
(a)a social security payment is made; and
(b)a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;
the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.
By the date of the hearing, there was no dispute that the Applicant’s rate of NSA and PPP was calculated on an inaccurate basis during the debt periods and that she received payment of NSA and PPP in excess of her entitlement. The quantum of debt amount was not disputed. A total of $28,809.03 was paid to the Applicant in excess of her entitlement during the period 5 July 2016 to 8 October 2018.
SHOULD THE DEBT BE RECOVERED?
Chapter 5 pt 5.4 of the Act allows for debts to the Commonwealth to be written off or waived for a period in certain circumstances.
In Secretary, Department of Social Security v Hales (1998) 82 FCR 154, 155, French J (as he then was) noted that the taxpayer expects the repayment of social security benefits received by a person if they were not entitled to them:
From time to time in the administration of social security benefits overpayments occur. Sometimes these are the result of innocent non-compliance with the requirements of the law which can be affected by the stress associated with the circumstances that led to the receipt of benefits in the first place. 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. However, the confining of a recovery regime by rigid rules, particularly in this area of the law, is likely to be productive of unfair or harsh outcomes in some of the great variety of fact situations that can arise. There are provisions in the Act which recognise that reality. They relate to the writing off and the waiver of debts otherwise due to the Commonwealth.
(Emphasis added).
However, as his Honour identified in the above passage, the Act has inbuilt write off and waiver provisions to avoid any unfair or harsh outcomes that may arise.
Write off under s 1236(1) of the Act
Section 1236(1) of the Act provides:
(1)Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.
Section 1236(1A) sets out the exclusive circumstances where the Secretary may decide to write off the debt under s 1236(1) of the Act. It provides:
(1A)The Secretary may decide to write off a debt under subsection (1) if, and only if:
(a)the debt is irrecoverable at law; or
(b)the debtor has no capacity to repay the debt; or
(c)the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d)it is not cost effective for the Commonwealth to take action to recover the debt.
If a debt is written off, recovery of the debt is put on hold for a set period of time. The debt still exists and may be recovered later (Guide para 6.7.3.10).
Section 1236(1B) of the Act sets out the instances where a debt is irrecoverable at law; none of them apply to the facts of this matter.
Section 1236(1C) of the Act relevantly provides that if a debt is recoverable by means of deductions from a social security payment, the person is taken to have capacity to repay the debt unless recovery would cause ‘severe financial hardship’.
The meaning of ‘severe financial hardship’ has been considered in a number of Tribunal decisions, including Re Lumsden and Secretary Department of Social Security [1986] AATA 228; Secretary, Department of Family and Community Services and Birgden (2003) 36 AAR 374 and Klaverstyn and Secretary, Department of Family and Community Services [2003] AATA 71.
In Re Feneley and Secretary, Department of Family and Community Services (2003) 74 ALD 585, the Tribunal stated at 587 [36]:
Severe financial hardship is not defined in the Act. However, the meaning of the term, while not implying destitution goes beyond straitened financial circumstances and imports a need for the particular circumstances of a person to include suffering of a severe or extreme nature.
The Respondent contends that the Applicant’s debt cannot be written off under s 1236 of the Act for the following reasons:
(a)the debt is not irrecoverable at law;
(b)there is no evidence to suggest that recovery of the debt would cause the Applicant severe financial hardship;
(c)the Applicant has capacity to repay the debt;
(d)the Applicant’s oral evidence to the AAT1 was that:
(i)she is earning between $350 and $750 per fortnight; and
(ii)her partner works full-time and his annual income for the previous year was around $95,000.
The Applicant’s evidence at the hearing with respect to her current income was that she was currently earning only $300 per fortnight. She did not provide any evidence in support of that submission, but even if the Tribunal were to accept her oral evidence, it is not enough to satisfy the Tribunal that repayment of the debt would cause her severe financial hardship in circumstances where the Applicant’s partner is working full-time and earning a significant income.
Accordingly, the Tribunal finds that the debt cannot be written off under s 1236(1) of the Act.
Waiver for sole administrative error under s 1237A(1) of the Act
Section 1237A(1) of the Act provides that the Secretary must waive a debt if the debt is attributable to the ‘sole administrative error’ of the Commonwealth (in this case Centrelink):
(1)Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.
Note:Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).
(Emphasis added).
In contrast to the write off of a debt, the effect of a waiver is a permanent bar to the future recovery of the debt, meaning that the debt cannot be pursued at a future date (Guide para 6.7.3.20).
In Gerhardt and Secretary, Department of Employment, Education and Training [1996] AATA 173 [39]–[40] (Gerhardt), Deputy President Forgie stated that ‘solely’ in the context of a debt being attributable solely to the Commonwealth’s administrative error should be given its ‘ordinary meaning’. Deputy President Forgie stated, at [40]:
Applying those ordinary meanings to the sub-section mean that the Secretary must waive the right to recover the proportion of the debt that is attributable only to the Commonwealth’s administrative error. The Secretary’s duty to waive does not extend to those debts which are attributable to errors or other factors which are independent of the Commonwealth’s administrative error. It makes no difference that those other errors or factors are minor. If those other errors or factors follow as a result of the Commonwealth’s administrative error (i.e. they are incidental to the Commonwealth’s error), then it may be that the debt is attributable solely to the Commonwealth’s administrative error. Whether it is or is not attributable in that situation to the Commonwealth’s administrative error will be a question of fact.
In Secretary, Department of Family & Community Services v Sekhon (2003) 73 ALD 41, 47 [41], Wilcox J explained that:
However, it seems to me, the tribunal failed to consider the significance of the inclusion, in s 1237A(1), of the word “solely”. For the subsection to have effect, the “proportion” of the debt — in this case, it is common ground, that would be the whole of it — must be “attributable solely” to 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.
In Ward and Secretary, Department of Family and Community Services [2000] AATA 212 Deputy President Forgie referred to her decision in Gerhardt, and clarified the meaning of sole administrative error in the context of s 1237A(1) of the Act (at [46]–[47]):
46.In an unreported decision of Gerhardt and Department Employment, Education and Training … I considered the meaning of “solely” as it formerly appeared in s. 289(1) of the Student and Youth Assistance Act 1973. That sub-section was in terms similar to s. 1237A(1) of the Act and a submission had been made that the word “solely” did not mean that the error had been made exclusively by the Commonwealth. After reviewing the authorities, I concluded that the word “solely” meant “exclusively”, “only” or “to the exclusion of all else”. There is no substantive difference between s. 289(1) of the Student and Youth Assistance Act 1973 and s. 1237A(1) of the Act. Consequently, I have taken the same view in relation to s. 1237A(1).
47.This means that the Secretary’s duty to waive does not extend to those debts which are attributable to errors or other factors which are independent of the Commonwealth’s administrative error. It makes no difference that those other errors or factors are minor. If those other errors or factors follow as a result of the Commonwealth’s administrative error (i.e. they are incidental to the Commonwealth’s error), then it may be that the debt is attributable solely to the Commonwealth’s administrative error.
(Original emphasis.)
Waiver of NSA debt
At the hearing, the Applicant expressly accepted responsibility for the NSA portion of the debt, on more than one occasion. Early in the hearing she said: ‘I’ve never disputed the Newstart amount. That was never what I was ever disputing. I’m happy to own that part of it’ (Transcript/7).
During cross-examination by Ms Hannigan, the following exchange occurred (Transcript/21):
MS HANNIGAN:   I wanted to ask you about the Newstart debt you said - you said today you accept the Newstart debt, and that you own it I think is what you said. Why do you accept the Newstart debt?
APPLICANT:        Because I believe it was my mistake, because I did fill out my report incorrectly.
MS HANNIGAN:   And how did you not fill out the report incorrectly?
APPLICANT:        I didn’t declare [partner’s] earnings, I think, for that week.
MS HANNIGAN:   If at some point - so you’ve just accepted that you didn’t report [partner’s] earnings correctly in relation to the Newstart debt. Would you agree with me then that it’s also quite possible that you did the same for the parenting payment debt?
APPLICANT:        No. Because we were in quite bad hardship at that time, and we were struggling financially. So I just wanted a bit of extra money at that time. But then by the time we had my daughter, our finances had changed.
MS HANNIGAN:   Okay. So I take it that in that instance it was intentional that you filled out the reporting incorrectly so you would get a higher rate of payment because you were struggling financially. Is that right?
APPLICANT:        With Newstart, yes.

In light of those admissions, the Tribunal finds that the Applicant intentionally misled Centrelink with respect to her partner’s income in making her application for NSA. Accordingly, the debt is not attributable to the ‘sole administrative error’ of the Commonwealth.
Waiver of PPP debt
The Respondent says that the PPP debt cannot be attributable solely to administrative error if it was brought about in whole or in part by a faulty completion of the PPP application by the Applicant. However, the Tribunal does not accept that this is the case.
The Applicant’s evidence during the hearing was that she was not asked a question about her partner’s income. Given the Applicant’s admission during the hearing that she had previously misled the Respondent in order to secure a financial advantage during a period of hardship, the Tribunal has some hesitation in accepting the Applicant’s evidence. The Tribunal is not satisfied that the Applicant has been entirely honest and forthcoming with the Tribunal.
However, there is no evidence upon which the Tribunal can reasonably base a finding that the Applicant failed to declare her partner’s income in the PPP Application. There is no record of an incorrect declaration on the PPP Application (R2/Attachment 2) and no record of the Applicant failing to answer a question about her partner’s income on the PPP application. There is no record of the questions that the Applicant was asked, the answers to which generated the PPP Application.
It is clear from the PPP Application that the Applicant provided her partner’s tax file number. She did not neglect to include the existence of her partner in the course of the application. Indeed, it is likely that it would be recorded on the PPP Application if the Applicant had positively affirmed that her partner did not have an income, as this is an important detail for the PPP Application to record. It follows that the Applicant was not asked to confirm her partner’s income. There is no other logical explanation for the absence of that detail on the PPP Application, which the Tribunal understands to be auto-generated on completion of an online form.
The Tribunal finds that the debt is not attributable to any fault on the Applicant’s part in completing the PPP application.
The Respondent further contends that the Applicant received nine letters over the course of the debt period, from 14 September 2016 onwards. These letters indicated that her payment was being worked out using both her and her partner’s income, and that her partner’s fortnightly earned income was $0.
A failure to correct obviously incorrect information has been held to offend the ‘good faith’ reception requirement of s 1237A(1).
The Respondent relies on Chapman and Secretary to the Department of Family and Community Services (2003) 74 ALD 501 (Chapman) and Coral Ann Moss and Secretary, Department of Social Security [1995] AATA 242 (Moss) as authorities for the proposition that a debt is not solely attributable to administrative error where an Applicant fails to read notices which contain information that is ‘obviously incorrect’ and to then inform Centrelink of the error (Respondent’s Statement of Facts, Issues and Contentions para [82]). With respect, both cases are clearly distinguishable from the present circumstances.
In Chapman, the applicant had received a number of letters from the Department of Social Security which contained information that was ‘obviously incorrect’ (at 507 [39]). She noted the incorrect amount of income attributed to her husband and considered it ‘absurd’. Notwithstanding that observation and conclusion, the applicant in Chapman did not draw it to the attention of the Department. Importantly, she did not make representations to the Department about her partner’s status as a welfare recipient; she relied on him having provided that information in the context of his own payments. The Tribunal concluded that in all of these circumstances it could not find that the payments were received in good faith (at 507 [41]).
In Moss, the Tribunal at para [10] found that a notice setting out a definition of ‘income’, which included ‘income from any other source within or outside Australia’, should have put the applicant on notice that her additional shift payments were to be included in her calculated income or at least that she should make fresh enquiries. That finding was made in the context of the applicant in Moss having provided an incorrect answer to questions about ‘normal wage’s’ (see para [8]).
In the matter presently before the Tribunal, the Applicant has not provided an incorrect income amount for her partner in the PPP Application, and the correspondence is not said to have put her on notice that she had provided incorrect information.
However, the Tribunal has reviewed the letters to the Applicant, and notes that it is reasonably clear on their face that the Respondent was calculating her entitlements on the basis that her partner was not earning any income. That was put to the Applicant at the hearing and she was invited to comment. She said that she interpreted the letter in the following way (Transcript/13):
It was my understanding that the letters were addressed to me and about my circumstances, because it had - I believe it had my name and my Centrelink number on the top. I believed if they wanted to know about [partner’s] income or pays, they would address it to him, because he has got a Centrelink number and an account. I believed that they were about my income.
That interpretation is not reasonable in the context of the letters as a whole. They clearly state (T6/269):
Information used for calculating your regular payment:
Assets …
Your partner’s annual other income …
Your partner’s fortnightly earned income …
Your annual other income …
Your fortnightly earned income …
Important information:
Your payment is worked out using both your and your partner’s income.
(Original emphasis.)
In total the Applicant missed nine opportunities to draw Centrelink’s attention to the error. The Applicant’s credibility has suffered from her admission that she wilfully misled Centrelink in respect of the NSA application, and the Tribunal does not accept that the Applicant did not understand from the letters that her PPP was calculated on the basis that her partner was not earning any income.
The Tribunal finds that the Applicant did not receive the payments in good faith and there is therefore no basis to waive the debt pursuant to s 1237A(1) of the Act.
Waiver for special circumstances under s 1237AAD of the Act
Section 1237AAD of the Act provides that a debt can be waived by the Secretary if there are special circumstances. The section states:
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 this Act, the Administration 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.
(Notes omitted.)
In summary, s 1237AAD of the Act gives the Secretary the discretion to waive a debt if there are special circumstances, other than financial hardship alone, which make it appropriate to do so. Additionally, the person must not have contributed to the debt by making a false statement, representation or by otherwise failing to comply with a provision of the Act or the Administration Act.
The Tribunal finds that the NSA debt has arisen in circumstances where the Applicant knowingly misled the Respondent by incorrectly reporting her partner’s income. Special circumstances waiver is not available in respect of the NSA debt.
However, the Tribunal must still consider whether a special circumstances waiver is appropriate in respect of the PPP debt.
Defining ‘special circumstances’
The concept of ‘special circumstances’ has been discussed in the case law and in Tribunal decisions. The concept must be viewed in the context of the statute providing that if an amount is paid to a person who is not entitled to it, that amount must be recovered. This was explained by Deputy President Forgie in the following passage from Gerhardt at [47]:
The words “special circumstances” have been considered in a number of cases in a number of contexts. These include Beadle v Director-General of Social Security (1985) 60 ALR, Secretary, Department of Social Security v Hulls (1991) 22 ALD 570, Trimboli v Secretary, Department of Social Security (1989) 86 ALR 64 and Secretary, Department of Social Security v Smith (1991) 13 AAR 454. The essence of cases such as these is that a consideration of whether or not there are special circumstances must be undertaken in the context in which the discretion is given.
It is clear from Division 15 of Part 8 of the Act [referring to the Student Assistance (Youth Training Allowance) Amendment Act 1994 (Cth)] that the purpose of the provisions is to ensure the recovery of amounts paid under the Act to persons who are not entitled to be paid those amounts. What are special circumstances must be considered against that background. There will be special circumstances if the circumstances are such that it is unreasonable, unjust or inappropriate to recover the amount paid bearing in mind that the provisions are intended to ensure the recovery of amounts incorrectly paid.
As noted by Deputy President Forgie in Gerhardt, the circumstances must be such that ‘it is unreasonable, unjust or inappropriate to recover the amount’, despite the person having received a payment that they were not entitled to.
In Groth v Secretary, Department of Social Security (1995) 40 ALD 541, 545, Kiefel J (as she then was) explained that special circumstances would be such as to distinguish an applicant’s situation from ‘the usual or ordinary case’:
The phrase “special circumstances”, it has been said, although imprecise is sufficiently understood not to require judicial gloss: Beadle’s case ... 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.
In Dranichnikov v Centrelink (2003) 75 ALD 134, 148 [65]–[66], the Full Court of the Federal Court of Australia referred to the circumstances having to be ‘exceptional or unusual’ such that they ‘distinguish the case in consideration from the usual case’:
[65]The decision-maker clearly also determined that the circumstances were such that they were not exceptional or unusual so that waiver could not be made as a matter of discretion under s 101. That equates “special circumstances”, as that expression is used in the Administration Act with either exceptional circumstances or unusual circumstances. The origin of the test apparently adopted by the secretary appears to be the decision of the first instance judge in Beadle v Directory-General of Social Security (1985) 7 ALD 670; 60 ALR 225. That was a decision under previous legislation, the history of which is referred to by French J in Secretary of Department of Social Security v Hales (1998) 82 FCR 154; 51 ALD 695; 153 ALR 259. The Full Court in Beadle comprising Bowen CJ, Fisher and Lockhart JJ, however, was of the view that it was not possible to lay down precise rules as to what constituted special circumstances under the then s 102(1)(a) of the Social Security Act 1947 (Cth). Their Honours point out that the question whether there were special circumstances was one for the decision-maker (in that case the Director-General) bearing in mind the purpose for which the power was given. The reference to the first instance decision from which the words “unusual, uncommon or exceptional” come was not actually affirmed by the Full Court.
[66] To some extent the question whether there were special circumstances must
depend on how it came about that the error occurred. Again that is not a matter to which the decision-maker apparently averted. Other cases which have considered analogous words such as “special reasons” has tended to conclude, albeit in different contexts, that what is required will be circumstances which distinguish the case in consideration from the usual case. There will be a requirement that the circumstances are such that take the case out of the ordinary: Jess v Scott (1986) 12 FCR 187; 70 ALR 18 and the cases in various contexts in the decision which Lockhart, Shepherd and Burchett JJ discuss.
In Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267, 274 [51] Jacobson J provided a succinct summary of the authorities:
The effect of the authorities is that the phrase “special circumstances,” although lacking in precision, is sufficiently understood as including events or things that render the operation of the statue in a particular case as unfair, unintended or unjust. What is required is something that takes the case out of the ordinary, and unfairness or unintended consequences may show that this exists. Moreover, the circumstances of the case are not confined to matters that are external to the operation of the statutory scheme …
The Applicant did not advance any evidence of special circumstances prior to the commencement of the hearing. In her closing submissions, she said that she was 20 weeks pregnant with her third child, was building another house, which required the payment of two mortgages, and that she was, at the time of the hearing, earning only $300 per fortnight (Transcript/30).
None of the matters raised by the Applicant in her closing submissions render the existence of the debt unfair, unintended or unjust. They do not set her circumstances apart from those of many other people in her situation. It is therefore unnecessary to consider whether it would be procedurally unfair to the Respondent to allow the Applicant to give evidence in closing submissions, after the opportunity to cross examine had concluded. The Applicant’s current circumstances are not such as to engage the discretion to waive the debt pursuant to s 1237AAD of the Act.
CONCLUSION
Neither the NSA debt nor the PPP debt can be waived pursuant to s 1236 of the Act for the following reasons:
(a)neither debt is irrecoverable at law;
(b)whilst the Applicant’s situation is not an easy one, she is not in severe financial hardship; and
(c)the Applicant has capacity to repay the debt, albeit she will likely need a payment plan.
The Applicant’s failure to complete the NSA application correctly precludes waiver of the NSA debt pursuant to s 1237A(1) of the Act.
The Applicant’s failure to notify Centrelink of its error in recording her partner’s income as ‘$0’ precludes waiver of the PPP debt pursuant to s 1237A(1) of the Act because she has not received the payment in good faith.
There are no special circumstances that engage s 1237AAD of the Act in respect of either debt.
DECISION
The Reviewable Decision, being the AAT1 Decision, dated 7 September 2020, is set aside.
The Tribunal substitutes a new decision that the whole of the debt for the periods 5 July 2016 to 12 September 2016 and 13 September 2016 to 8 October 2018 is a debt due to the Commonwealth and is recoverable.

I certify that the preceding 82 (eighty -two) paragraphs are a true copy of the reasons for the decision herein of Member Dr J Henderson

...[Sgd].....................................................................
Associate
Dated: 29 October 2021

Date of hearing: 30 June 2021

Representative for the Applicant: Self-represented

Representative for the Respondent: Ms L Hannigan, Lawyer, Services Australia

[2021] AATA 3979

29 October 2021

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Procedural Fairness

Statutory Construction

Remedies

Jurisdiction

Appeal

Date of hearing:	30 June 2021
Representative for the Applicant:	Self-represented
Representative for the Respondent:	Ms L Hannigan, Lawyer, Services Australia