Janssen and Secretary, Department of Social Services (Social services second review) - [2023] AATA 1030

Janssen and Secretary, Department of Social Services (Social services second review) [2023] AATA 1030 (1 May 2023)
Division:GENERAL DIVISION
File Number(s): 2021/6824; 2021/8450
Re:Danielle Janssen and Shane Janssen
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Member W Frost

Date:1 May 2023
Place:Canberra

Pursuant to subsection 43(1)(c) of the Administrative Appeals Tribunal Act 1975, the decision under review is set aside and the matter is remitted to the Respondent for reconsideration in accordance with directions that:
a.Mr Janssen was overpaid the amount of $24,781.20 for the Disability Support Pension (DSP);
b.The other debts before the Tribunal are to be recalculated based on the above DSP debt amount;
c.The DSP debt and other recalculated amounts are debts due to the Commonwealth; and
d.Those debts are not to be written-off or waived.

....................[SGD]........................................
Member W Frost
Catchwords
SOCIAL SECURITY – alleged debt – Disability Support Pension – Family Tax Benefit – Child Care Benefit – income notification obligation – where the Applicants did not report a change in income – Applicants contended they were not informed regarding reporting separate incomes – overpayment – debts not to be waived – debts not to be written off – recalculation – decision set aside and remitted
Legislation
Administrative Appeals Tribunal Act 1975 (Cth), ss 37, 43
A New Tax System (Family Assistance) Act 1999 (Cth), Schedule 1
A New Tax System (Family Assistance) (Administration) Act 1999 (Cth), ss 25, 71, 95, 97, 101
Social Security Act 1991 (Cth), ss 8, 1064, 1072, 1073A, 1223, 1236, 1237A, 1237AAD
Social Security (Administration) Act 1999 (Cth), ss 66A, 68, 98, 99, 100, 123, 179
Social Services and Other Legislation Amendment (Simplifying Income and Reporting and Other Measures) Act 2020 (Cth), cited
Cases
Angelakos and Secretary Department of Employment and Workplace Relations [2007] FCA 25
Barnes and Secretary, Department of Social Services [2014] AATA 786
Beadle and Director-General of Social Security (1984) 6 ALD 1
Centkowska and Secretary, Department of Social Services (Social services second review) [2016] AATA 342
Davy and Secretary Department of Employment and Workplace Relations [2007] AATA 1114
Dranichnikov and Centrelink [2003] FCAFC 133
Feneley and Secretary, Department of Family and Community Services [2003] AATA 496
Ghanem and Secretary, Department of Social Services [2022] AATA 160
Groth and Secretary Department of Social Security (1995) FCA 1708
Judd and Secretary, Department of Social Services [2022] AATA 727
Klaverstyn and Secretary, Department of Family and Community Services [2003] AATA 71
Lumsden and Secretary Department of Social Security [1986] AATA 228
Purches and Secretary, Department of Family and Community Services [2005] AATA 267
Re Gerhardt and Department of Employment, Education and Training [1996] AATA 173
Re Ivovic and Director General of Social Services (1981) 3 ALN N95
Rosser and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2009] AATA 475
Saab and Secretary, Department of Social Services [2021] AATA 2766
Secretary, Department of Education, Employment and Workplace Relations and Brookes [2008] AATA 501
Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Walsh & Anor [2008] AATA 75
Secretary, Department of Family and Community Services and Birgden [2003] AATA 67
Secretary, Department of Social Security v Coralie Hales (1998) 82 FCR 154
Secretary, Department of Social Services and Vella [2021] AATA 4051
Secretary, Department of Social Services and Waqar [2020] AATA 1493
Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190
Stafford and Secretary, Department of Social Services [2018] AATA 2764
Tabije and Secretary, Department of Social Services [2014] AATA 778
Waddell and Secretary, Department of Employment and Workplace Relations [2006] AATA 557
Ward and Secretary, Department of Family and Community Services [2000] AATA 212
YKBJ and Secretary, Department of Social Services [2015] AATA 65
REASONS FOR DECISION
Member W Frost
1 May 2023
INTRODUCTION

This decision concerns the overpayment of social security and family assistance payments, being the Disability Support Pension (DSP), Family Tax Benefit (FTB), and Child Care benefit (CCB), totalling more than $50,000 and what should happen to such debts. The Applicants, Mrs Danielle Janssen and Mr Shane Janssen, were collectively in receipt of these payments. At all relevant times, the then Department of Human Services (now Services Australia and referred to in this decision as the Agency) was not informed by the Applicants of Ms Janssen’s actual fortnightly employment earnings. This led to the overpayments of the DSP, FTB and CCB to the Applicants.
In 2021, the Agency raised debts against the Applicants in relation to FTB, DSP and CCB. The Applicants disputed the alleged debts, but an Authorised Review Officer (ARO) found that the Agency’s decisions were correct.
The Applicants applied for review by the Social Services and Child Support Division of the Administrative Appeals Tribunal (AAT1). In August 2021, the AAT1 affirmed the Agency’s decisions, except for a decision to raise and recover a debt of $19,091.37 for overpayment to Mr Janssen of DSP for the period 1 March 2016 to 9 March 2021. The AAT1 set aside the decision and in substitution remitted it to the Agency with a direction that the DSP debt be recalculated on the basis that the debt period commenced on 1 March 2016 and ended on 25 November 2020, not 9 March 2021 as found by the ARO and initially by the Agency. The Applicants then applied to the General Division of the Administrative Appeals Tribunal (Tribunal) for review of the AAT1’s decision.
The Tribunal considered all documents filed in this proceeding by the Respondent, pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (AAT Act),[1] together with the Applicants’ documents[2] and the parties’ submissions.
[1] Being Exhibits 1, 2 and 3.
[2] Being Exhibits 4 to 10.
For the following reasons, the Tribunal has decided to set aside the AAT1 decision and remit the matter to the Respondent for reconsideration in accordance with directions that:
(a)Mr Janssen was overpaid DSP in the amount of $24,781.20;
(b)The other debts before the Tribunal are to be recalculated based on the above DSP debt amount;
(c)The DSP debt and other recalculated amounts are debts due to the Commonwealth; and
(d)Those debts are not to be written-off or waived.
As a result of the Tribunal’s decision, the applications are unsuccessful.
ISSUES
The issues for determination by the Tribunal were:
(a)whether the Applicants were paid social security and/or family assistance payments in excess of their entitlement; and
(b)if so, the amounts that they were overpaid;
(c)whether those overpaid amounts are debts owing to the Commonwealth; and
(d)if so, whether all or part of the debts should be written off or waived.
BACKGROUND
Mr Janssen
In or around 2013, Mr Janssen commenced receiving DSP.[3]
[3] Exhibit 2, page 541.
In February 2014, Mrs Janssen’s fortnightly earnings were recorded by the Agency as being $2,024.00.[4]
[4] Exhibit 1, page 728 and Exhibit 2, page 505.
On 3 July 2014, the Agency issued Mr Janssen with a statement in relation to his DSP, which relevantly stated:[5]
[5] Exhibit 2, pages 187-189.
Please check the information on this statement carefully. If the details on this statement are correct there is no need for you to contact us. If your circumstances have changed please contact us within 14 days. This request is an information notice given under social security law. You may find it convenient to keep this statement for your records.
Rate of payment – Your future rate of payment may change depending on the amount of your earnings, other income or assets. We have not shown family assistance payments. Note that all the information in this statement is from records we hold as at the issue date of the statement.
…
Earnings information – You need to tell us your earnings before tax and other deductions such as salary sacrifice. The amount must be for work performed in the Centrelink fortnight prior to notification and only the amount earned in the Centrelink fortnight, this may be different from your salary pay fortnight.
Partner earnings
Centrelink period   Amount
11 Apr 2014 to 24 June 2014              $2,024.00 pf
…
Family Tax Benefit estimate
Date last updated           Amount advised (combined taxable income)         For financial year
1 Jul 2014                 $49,629 pa  2014/2015
If you would like to update your estimate you can go to our website humanservices.gov.au, or call our self service line on 136 240, or call us on 136 150.
[emphasis in original]
In July 2014, Mrs Janssen’s fortnightly earnings were recorded by the Agency as being $2,106.62.[6]
[6] Exhibit 1, page 728 and Exhibit 2, page 505.
On 13 March 2016, the Agency sent Mr Janssen a notice in relation to his family assistance payments, which relevantly stated:[7]
[7] Exhibit 2, pages 190-192.
When to contact us
Under family assistance law, you must tell us about events that may affect your payments as soon as possible after any of these things happen or you become aware that they are likely to happen.
About your family’s income
You need to tell us about any changes to your and/or your partner’s income as soon as possible. This is important because your and/or your partner’s income will be checked with the Australian Taxation Office at the end of each financial year to make sure you have been paid the right amount.
Your Family Tax Benefit may be automatically adjusted when your income changes, helping to avoid or reduce overpayments.
The income details you must tell us about include changes to your or your partner’s:
• taxable income including income from salary and wages, lump sum payments…
…
I you receive Family Tax Benefit Part B and you are a member of a couple, you must tell us if the primary earner’s annual income goes over $100,000.00 or the lower earner’s annual income changes…
There are different notification requirements for income support payments. If you or your partner receive an income support payment and you have a change in income, you will need to update your income details for that payment too. [emphasis in original]
Between June 2016 and December 2017, the Agency sent Mr Janssen multiple further notices relating to his family assistance payments in terms similar to the above extracted notice.[8]
[8] Ibid., pages 198-200, 204-206, 213-215, 220-225, 228-230, 232-243, 245-265, 269-289 and 293-313.
In or around September 2016, Mrs Janssen commenced employment at the NSW Department of Family & Community Services (FACS) and from that time earned more than the previously reported amount of $2,106.62 in each working fortnight.[9]
[9] Exhibit 3, pages 697-708. See also Exhibit 1, pages 483-587.
On 27 September 2016, the Applicants reported to the Agency for FTB purposes that Mrs Janssen had taxable income for the 2016/17 financial year of $76,000.[10] Mrs Janssen’s actual taxable income for the 2016/17 financial year was $79,979.[11]
[10] Exhibit 2, page 606.
[11] Exhibit 1, pages 470-473.
On 26 October 2016, the Agency sent Mr Janssen a telephone text message stating that it had ‘received information that your employment details have changed’, which ‘could affect your Centrelink payments’, and requested him to ‘update your details’.[12]
[12] Ibid., page 621.
On 31 July 2017, the Applicants reported to the Agency for FTB purposes that Mrs Janssen had taxable income for the 2017/18 financial year of $77,216.[13] Mrs Janssen’s actual taxable income for the 2017/18 financial year was $87,305.[14]
[13] Exhibit 2, page 605.
[14] Exhibit 1, pages 475-476.
On 9 June 2018, the Agency sent Mr Janssen a notice regarding his DSP, which relevantly stated:[15]
[15] Exhibit 2, pages 320-322.
Information used for calculating your regular payment
Combined Annual Income ………………………………. $30.10
Combined Regular Fortnightly Earnings ………………..$2,106.62
…
What you must tell us
You must tell us within 14 days (28 days if residing outside Australia) if any of the changes listed below happen or are likely to happen to you and/or your partner (if you have one)…
This request is an information notice given under social security law.
• Income: Your or your partner’s gross income changes. Changes mean your income starts, stops, recommences or amounts vary. Gross income includes, but is not limited to:
- Start or stop work: If you start work for 30 hours a week or more including unpaid or voluntary work, seasonal work, any form of profession, trade, business or self-employment.
o Earnings: Employment income;… [emphasis in original]
On 1 July 2018, the Applicants reported to the Agency for FTB purposes that Mrs Janssen had taxable income for the 2018/19 financial year of $86,918.[16] The Applicants updated this estimate on 19 July 2018, 23 August 2018 and 15 December 2018 from $90,000 to $105,000.[17] Mrs Janssen’s actual taxable income for the 2018/19 financial year was $107,929.[18]
[16] Ibid., page 605.
[17] Ibid., pages 604-605.
[18] Exhibit 1, pages 478-479.
Between 13 May 2019 and 1 July 2019, Mr Janssen received multiple further notices relating to his DSP,[19] all of which again confirmed that the information used to calculate his regular DSP payment included ‘Combined Regular Fortnightly Earnings’ in the amount of $2,106.62.[20]
[19] Exhibit 2, pages 333-338 and 340-343.
[20] Ibid.
On 1 July 2019, the Applicants reported to the Agency for FTB purposes that Mrs Janssen had taxable income for the 2019/20 financial year of $108,000.[21] The Applicants updated this estimate on 17 January 2020 and 1 May 2020 to $113,000.[22] Mrs Janssen’s actual taxable income for the 2019/20 financial year was $113,753.[23]
[21] Ibid., page 604.
[22] Ibid., page 603.
[23] Exhibit 1, pages 481-482.
On 1 July 2020, the Applicants reported to the Agency for FTB purposes that Mrs Janssen had taxable income for the 2020/21 financial year of $115,938.[24] The Applicants updated this estimate on 17 August 2020 and 19 November 2020 from $116,711 to $113,000.[25]
[24] Exhibit 2, page 603.
[25] Ibid., page 602.
On 26 November 2020, the Agency’s records state, Mr Janssen contacted it regarding a general enquiry on DSP and that:[26]
Reason why an Action doc is Necessary: CSUt on DSP has EANS recorded for partner $54772.12 per annum. Ptr has and FTB income est of $113000, follow up required as EANS has been coded from 2014 and cus may not be aware of advising both ISP and FTB.
[26] Exhibit 1, page 631.
On 9 February 2021, the Agency’s records relevantly state as follows:[27]
Cus Ptr earnings on EANS converted after changes to income reporting and completed in activity 6422 on 02/12/2020. Cus is not on FTB as does not have children eligible anymore.
…
Attempted to contact customer as FTB docs on Ptr file state she has started a new job earning $117699 as her FTB estimate as she is current on FTB. RHL159 did FTB estimate with cus but no changes to EANS on cus file apart from conversion on 02/12/2020. Contact attempted on home number and mobile at 12pm on 09/02/2020 [sic] without success.
[27] Ibid.
On 10 February 2021, the Agency’s records state that it made multiple attempts to contact Mr Janssen ‘due to possible overpayment’ and, when contact was established, the Agency:[28]
Advised CUS of discrepancy with what has been reported in EANS and FTB estimate made by partner. CUS reporting EANS as $54772pa with $2106pf and FTB estimates is $117680pa which equates to $4526pf. This shows a possible approximate 50% discrepancy of what is being declared on FTB estimate v what CUS has been reporting on EANS. CUS stated he does not know how much his wife earns he would have to ask her.
[28] Ibid.
On 10 February 2021, the Agency sent Mr Janssen a ‘Request for information’ to assist in determining his entitlement to DSP.[29] The Agency requested Mrs Janssen’s personal income tax returns for the financial years from 2016/17 to 2019/20.[30] The following day, the requested documents were provided to the Agency.[31]
[29] Exhibit 2, pages 347-348.
[30] Ibid.
[31] Ibid., pages 349-362.
On 2 March 2021, the Agency sent Mr Janssen a further ‘Request for information’ to assist in determining his entitlement to DSP.[32] The Agency requested Mrs Janssen’s payslips for the period from 1 January 2016 to 2 March 2021.[33] The documents were subsequently provided to the Agency.[34]
[32] Ibid., pages 363-364.
[33] Ibid.
[34] Ibid., pages 366-482.
On 18 May 2021, the Agency raised an FTB debt of $909.68 against Mr Janssen for the 2017/2018 financial year.[35] The notice to Mr Janssen stated that, ‘[w]e have now checked your entitlement for the financial year 2017-18 using your annual family income and your family circumstances and you received more Family Tax Benefit than you were entitled to’.[36]
[35] Ibid., pages 493-496.
[36] Ibid., page 493.
On 4 June 2021, the Agency raised a DSP debt of $19,091.37 against Mr Janssen for the period from 1 March 2016 to 9 March 2021.[37] The notice to Mr Janssen stated that he was paid too much DSP ‘because an incorrect amount of your partner’s employment income from multiple employers was used to work out the payments made to you’.[38]
[37] Ibid., pages 497-499.
[38] Ibid., page 497.
On 1 July 2021, an ARO decided not to change the above decisions to raise debts in relation to Mr Janssen’s FTB and DSP.[39]
[39] Ibid., pages 503-509.
On 2 July 2021, Mr Janssen applied to the AAT1 for review of the ARO’s decision.[40]
[40] Ibid., page 513.
Mrs Janssen
Between 27 September 2010 and 9 September 2016, Mrs Janssen was employed by Mission Australia.[41] She worked full-time and was paid a fortnightly salary. As set out above, in July 2014, Mrs Janssen’s fortnightly earnings were recorded by the Agency as being $2,106.62.[42]
[41] Exhibit 3, page 689.
[42] Exhibit 1, page 728 and Exhibit 2, page 505.
On 12 September 2016, Mrs Janssen commenced employment with FACS.[43] She worked full-time and was paid a fortnightly salary.
[43] Exhibit 3, page 714.
During the 2016/17, 2017/2018, 2018/2019 and 2019/2020 financial years, Mrs Janssen was in receipt of FTB.[44] She also received CCB during the 2016/17 and 2017/2018 financial years.[45]
[44] Exhibit 1, pages 192-212, 216-254, 258-260, 263-283, 317-324, 330-332, 336-339, 357-359, 369-448 and 450-461.
[45] Ibid., pages 213-215, 261-262, 284-285, 325-327 and 354-356.
On 1 June 2017, the Agency issued Mrs Janssen a notice in relation to her family assistance payments in similar terms to the notices sent to Mr Janssen, including the following paragraph:[46]
There are different notification requirements for income support payments. If you or your partner receive an income support payment and you have a change in income, you will need to update your income details for that payment too.
[46] Ibid., pages 192-194.
Between June 2017 and June 2020, Mrs Janssen received multiple further notices from the Agency in similar terms regarding her family assistance payments.[47]
[47] Ibid., pages 195-212, 216-218, 225-242, 246-254, 258-260, 263-283, 319-324, 330-332, 337-339, 357-359, 369-371, 378-392, 395-448 and 450-461.
Between January and September 2018, Mrs Janssen also received multiple income statements from the Agency which relevantly stated as follows:[48]
[48] Ibid., pages 286-287, 340-343, 360-363.
Details of your income (Not including Centrelink payments)
There are no income details to report. [emphasis in original]
On 17 May 2021, the Agency raised a CCB debt of $1,198.05 against Mrs Janssen for the 2017/2018 financial year.[49]
[49] Ibid., pages 594-597.
On 18 May 2021, the Agency raised the following FTB debts against Mrs Janssen:[50]
(a)$4,610.78 for the 2017/2018 financial year;
(b)$14,284.58 for the 2018/2019 financial year; and
(c)$16,044.32 for the 2019/2020 financial year.
[50] Ibid., pages 598-609.

On 1 July 2021, an ARO decided not to change the above decisions to raise debts in relation Mrs Janssen’s CCB and FTB debts.[51]
[51] Ibid., pages 626-639.
On 2 July 2021, Mrs Janssen applied to the AAT1 for review of the ARO’s decision.[52]
[52] Ibid., page 640-645.
AAT1 decision and applications to this Tribunal
On 31 August 2021, the AAT1 affirmed the ARO’s decisions to raise and recover the CCB and FTB debts of Mrs Janssen and the FTB debt of Mr Janssen. However, the AAT1 set aside the decision to raise and recover Mr Janssen’s DSP debt for the period from 1 March 2016 to 9 March 2021 and remitted the matter to the Agency for reconsideration in accordance with a direction that the DSP debt be recalculated on the basis that the debt period commenced on 1 March 2016 and ended on 25 November 2020, not 9 March 2021.[53] The AAT1 found that any amount overpaid between 26 November 2020 and 9 March 2021 must be waived due to sole administrative error on the part of the Agency.
[53] Ibid., pages 7-14 and Exhibit 2, pages 9-16.
On 16 September 2021, Mrs Janssen lodged with this Tribunal an application for review of the AAT1 decision, which stated that the reasons for seeking a further review were:[54]
I maintain, I continued to report my income over the period the debt was incurred and believe the decision to be unjust and unethical based on Centrelink’s computer system not picking up any errors in my reporting from 2014 to 2021. There was no clear notification direction on how my income needed to be updated, nor did we receive many letters stating otherwise. Shane updated his and my income through his Centrelink account, as I did my own.
Repaying a debt of this amount is not fair when we were complying with reporting to Centrelink, unknowingly needing to report through another means. I argue why it took 7 years for this to be picked up when Centrelink confirms and balances each financial year with the ATO.
[54] Exhibit 1, pages 1-6.
On 23 September 2021, Mr Janssen lodged an application for review of the AAT1 decision with this Tribunal and further stated that the reasons for seeking a review were:[55]
I am seeking special circumstances for waiver of the debt given the additional needs of my stepdaughter, my wife and my own. I am not able to work, as I have been assessed as permanently disabled. I have to have regular medical appointments, I take a number of medications and have to travel to get to any of my appointments. I also suffer from anxiety which I take medication for. The expenses for all of these things is substantial now I do not receive any benefits of a concession card. [Mrs Janssen’s daughter] has a diagnosis of ADHD, with her medication being $97 every 28 days, along with regular Paediatrician appointments which cost $340 for each appointment. Danielle is diagnosed with chronic migraines, which do not response [sic] to medications; taking regular medication and having to see a GP regularly, in addition to her neurologist. Danielle is also diagnosed with PTSD, Borderline Personality Disorder and anxiety. The cost associated for managing all of these things, in addition to the debt would be unrealistic. We would need to sell our home, to be able to pay for all these things and the debt. Paying this debt will also impact negatively on our already poor mental health.
LEGISLATION & POLICY
[55] Exhibit 10.
DSP entitlement
Pursuant to section 1064 of the Social Security Act 1991 (Act), the rate of Mr Janssen’s DSP entitlement is determined in accordance with the ‘Rate Calculator’ at the end of that provision, which contains various applicable ‘Modules’. The introduction to the Rate Calculator at Module A, at point 1064-A1, states that the rate of DSP is a daily rate and ‘worked out by dividing the annual rate calculated according to this Rate Calculator by 364’. Step 5 requires the application of ‘the ordinary income test using MODULE E below to work out the income reduction’. That Module E, at point 1064-E2, includes an applicable step requiring the determination of a person’s ordinary income by adding ‘the couple’s ordinary income (on a yearly basis) and divide by 2 to work out the amount of the person’s ordinary income’.
FTB entitlement
Schedule 1 to the A New Tax System (Family Assistance) Act 1999 (FA Act) sets out the rate calculator to determine a person’s annual entitlement to FTB. Relevantly for this application, Part 1 of Schedule 1 at clause 1(2)(a)(ii) provides that the ‘Part A rate’ of FTB is calculated under Part 2 of Schedule 1 if ‘the individual, or the individual’s partner, is receiving a social security pension’ or ‘a social security benefit’. Alternatively, under Part 1 of Schedule 1 at clause 1(2)(b), if neither the person nor their partner is receiving a social security pension or benefit, and the person’s adjusted taxable income exceeds the person’s ‘higher income free area’, then the Part A rate is calculated under Part 3 of Schedule 1.
CCB entitlement
Schedule 2 to the FA Act provides how to determine if a person is eligible for CCB. Under the legislation at the time the relevant CCB payments were made to Mrs Janssen, working out a person’s rate of CCB for a session of care provided to a child required calculation of the person’s ‘taxable income’ percentage. Most relevantly, pursuant to then clause 7(a)(ii) in Part 4 of Schedule 2 to the FA Act, an individual’s taxable income percentage is 100% if the person or their partner is receiving a social security benefit or pension. If neither the person or their partner is receiving a social security pension or benefit, and the person’s adjusted taxable income for the income year does not exceed the lower income threshold, then the taxable income percentage was worked out using clause 8 in Part 4 of Schedule 2 to the FA Act.
Income
Subsection 8(1) of the Act defines ‘ordinary income’ to mean ‘income that is not a maintenance income or an exempt lump sum’. Under that provision, ‘income’, in relation to a person, means an amount that is ‘earned, derived or received’ by the person for the person’s own use or benefit. An ‘income amount’ means valuable consideration, personal earnings, moneys or profits (whether of a capital nature or not).
‘Employment income’ is relevantly defined under subsection 8(1A) of the Act to mean ‘ordinary income’ of a person ‘that is for remunerative work’ undertaken by the person ‘as an employee in an employer/employee relationship’ and includes salary and wages.
Subsection 8(1B) of the Act provides as follows:
For the avoidance of doubt, if:
(a) a person is treated, for the purposes of working out the person’s ordinary income, as having ordinary income of the person’s partner; and
(b) that ordinary income would be characterised as employment income in the hands of the partner if the partner were not a member of a couple;
then, for the purposes of this Act, that ordinary income is to be similarly characterised in the hands of the person.
Part 3.10 of the Act contains the general provisions relating to the ordinary income test. Those provisions were significantly changed following legislative amendments introduced by the Social Services and Other Legislation Amendment (Simplifying Income and Reporting and Other Measures) Act 2020, which commenced on 7 December 2020.
Pursuant to section 1072 in Part 3.10 of the Act, a reference to a person’s ‘ordinary income’ for a period is a reference to the person’s ‘gross ordinary income’ from all sources for the period.
Creation of a debt
Subsection 123(3)(b) of Social Security (Administration) Act 1999 (Administration Act) states that a determination regarding the rate of a social security payment continues in effect until the payment becomes payable at a lower rate under section 98, 99 or 100.
In accordance with subsection 100(1) of the Administration Act, if:
(a) a person who is receiving a social security payment is given a notice under subsection 68(2); and
(b) the notice requires the person to inform the Department of the occurrence of an event or change of circumstances within a specified period (the notification period); and
(c) the event or change of circumstances occurs; and
(d) the person does not inform the Department of the occurrence of the event or change of circumstances within the notification period in accordance with the notice; and
(e) because of the occurrence of the event or change of circumstances, the rate of the social security payment is to be reduced;
the social security payment becomes payable to the person at the reduced rate on the day on which the event or change of circumstances occurs.
Subsection 68(2) of the Administration Act relevantly states:
The Secretary may give a person to whom this subsection applies a notice that requires the person to do either or both of the following:
(a) inform the Department if:
(i) a specified event or change of circumstances occurs; or
(ii) the person becomes aware that a specified event or change of circumstances is likely to occur;
(b) give the Department one or more statements about a matter that might affect the payment to the person of the social security payment…
Section 66A of the Administration Act also imposes a standing obligation on social security recipients to inform the Agency of ‘an event or change of circumstances’ that might affect the payment of a social security payment within 14 days after the day on which the event or change occurs. Section 25 of the A New Tax System (Family Assistance) (Administration) Act 1999 (FA Administration Act) imposes a similar obligation for the purposes of family assistance payments.
Subsection 1223(1) of the Act provides that 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.
Similarly, section 71 of the FA Administration Act provides as follows:
No entitlement to amount
(1) If:
(a) an amount has been paid to a person by way of family tax benefit, stillborn baby payment or single income family supplement (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 due 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 is 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. [emphasis in original]
Writing off a debt
Section 1236 of the Act relevantly provides that:
(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.
(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.
(1B) For the purposes of paragraph (1A)(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
(c) the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or
(d) the debtor has died leaving no estate or insufficient funds in the debtor’s estate to repay the debt.
(1C) For the purposes of paragraph (1A)(b), if a debt is recoverable by means of:
(a) deductions from the debtor’s social security payment; or
(b) deductions under section 84 of the A New Tax System (Family Assistance) (Administration) Act 1999; or
(c) setting off under section 84A of that Act;
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.
…
Section 95 of the FA Administration Act is in similar terms to the above provision.
Waiving a debt
Administrative error
Subsection 1237A(1) of the Act relevantly provides that the Respondent ‘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’.
Section 97 of the FA Administration Act is in similar terms to the above provision, but also requires the ‘administrative error’ proportion of the debt to be waived if the person ‘would suffer severe financial hardship’.
Special circumstances
Section 1237AAD of the Act states that the Respondent may waive the right to recover all or part of a debt if 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.
Section 101 of the FA Administration Act is in similar terms to the above provision.
Tribunal’s jurisdiction
For completeness, the Tribunal notes that under section 179 of the Administration Act, an application may be made to the Tribunal for review of a decision of the AAT1 made under subsection 43(1) of the AAT Act. As previously mentioned in this decision, the AAT1 made a decision pursuant to subsection 43(1) of the AAT Act. This Tribunal therefore has jurisdiction in relation to the applications made by the Applicants for review of the AAT1 decision.
CONTENTIONS
The Applicants
The Applicants did not dispute that they received social security and family assistance payments to which they were not eligible. However, the Applicants contended that the Agency had not provided them with notice of how to separately report Mrs Janssen’s fortnightly employment income, the mechanism for such reporting was unclear and they reported annual income for FTB purposes that should have been used by the Agency to determine social security entitlements.
The Applicants submitted that they acted in good faith, did not knowingly misreport or fail to report their combined income and sought a waiver or write-off of the debts due to financial hardship, compassionate grounds and the sole administrative error of the Commonwealth, being the claimed failure to request fortnightly income information or match annual income information from FTB reporting with that held by the Agency for social security payments.
Respondent
The Respondent contended that:
(a)the Applicants received social security and family assistance payments in excess of their entitlement;
(b)those excess payments are debts due to the Commonwealth; and
(c)there is no basis to write-off or waive any part of the debts.
The Respondent therefore submitted that the AAT1 erred in finding that the part of Mr Janssen’s DSP debt relating to the period from 25 November 2020 to 9 March 2021 must be waived because of sole administrative error by the Commonwealth.
EVIDENCE
At the hearing, both Mr and Mrs Janssen confirmed that they relied on their written submissions and the documentation in this proceeding and did not wish to give evidence.
The Respondent’s representative asked Mr Janssen a small number of questions by way of cross-examination. Mr Janssen confirmed his residential address in Cootamundra, New South Wales, and that he has been in receipt of DSP since December 2013. Mr Janssen told the Tribunal he ‘wouldn’t say’ he regularly received a number of letters from the Agency regarding his social security and family assistance payments, he had ‘no idea’ how many he had received, but agreed that he carefully read and considered their contents. In this regard, Mr Janssen agreed that he would have read the letter issued by the Agency on 3 July 2014, including the statement to check the enclosed information carefully and provide any updates if his details change.[56] Mr Janssen was referred to the section of the letter titled, ‘Partner earnings’ under ‘Earnings information’, which set out an amount of $2,024 per fortnight.[57] Mr Janssen was asked whether he understood that the Agency was determining his entitlement to DSP on this earnings information. He said all of the information had been updated ‘religiously’, in reference to reporting Mrs Janssen’s annual income for the calculation of FTB.
[56] Exhibit 2, pages 187-189.
[57] Ibid., page 188.
Mr Janssen was also referred to a letter dated 13 March 2016 regarding his family assistance payments.[58] He said this was ‘years ago’, but agreed that he ‘would have’ read it ‘at some point’. Mr Janssen further said that he would have read the requirement, set out in that letter, to declare his and his partner’s income and that it ‘would have been’. He also agreed that he had read and understood the information about there being different requirements for certain income support payments. Mr Janssen agreed that he read and understood this statement. Mr Janssen did not agree with the proposition that he had received a number of similar notices while receiving the DSP and FTB and told the Tribunal that there was ‘very limited’ contact, letters or instructions from the Agency.
[58] Exhibit 2, pages 190-192.
Mr Janssen was referred to a letter from the Agency dated 9 June 2018 regarding his DSP.[59] He told the Tribunal the required earnings information was provided to the Agency the way he thought it was supposed to be provided. Counsel for the Respondent asked Mr Janssen whether he understood the calculation of his DSP was based on a calculation using Mrs Janssen’s stated fortnightly income of $2,106.62.[60] He told the Tribunal that he did not ‘understand any of this’. Mr Janssen was taken to the section of the letter headed ‘[w]hat you must tell us’.[61] He accepted there were various methods to report earning income to the Agency and said that it was reported when or if he was told by the Agency and that Mrs Janssen had ‘pretty much done all of it’ for him. Mr Janssen said everything was ‘done properly’ and he was ‘not taking the blame for something that has happened at Centrelink’s end’.
[59] Exhibit 2, pages 320-322.
[60] Ibid., page 320.
[61] Ibid., page 321.
CONSIDERATION
Were the Applicants paid social security and family assistance amounts in excess of their entitlement?
There was no dispute between the parties that, between March 2016 and March 2021, a period of 5 years, the Applicants received social security payments and family assistance payments in the form of the DSP, CCB and FTB in excess of their entitlement.[62] Mr and Mrs Janssen were members of a couple at all relevant times for the purpose of calculating their entitlement to social security and family assistance payments.
[62] Exhibit 2, pages 11-12. See also Applicant’s Statement of Facts, Issues and Contentions dated 26 September 2022, paragraph 5.
Mrs Janssen’s payslip and employment information details the income she earned during the relevant periods. Changes in Mrs Janssen’s fortnightly salary were not reported to the Agency as required by the Applicants and were thus not taken into account when calculating Mr Janssen’s entitlement to DSP. As a result, Mr Janssen’s rate of DSP was calculated based on incorrect information and he received DSP in excess of his entitlement. Mrs Janssen’s actual employment income resulted in the Agency finding that Mr Janssen had no entitlement to DSP during the following periods:[63]
(a)19 July 2017 to 27 March 2018;
(b)4 July 2018 to 30 June 2019;
(c)1 July 2019 to 10 March 2020; and
(d)8 April 2020 to 30 June 2020.
[63] Exhibit 1, page 628.

During those periods where Mr Janssen was not receiving DSP, the Applicants’ entitlement to family assistance payments was subject to income testing. The fact that Mrs Janssen’s employment income was not taken into account also resulted in overpayment of FTB (and in Mrs Janssen’s case, CCB). That is, all of the debts before the Tribunal arose on account of Mrs Janssen’s actual fortnightly employment income not being reported and taken into account for the purposes of calculating Mr Janssen’s entitlement to DSP.
Based on all the available evidence, pursuant to subsection 1223(1) of the Act and section 71 of the FA Administration Act, the Tribunal finds that the DSP, CCB and FTB payments were made to the Applicants, they were not entitled for any reason to obtain those benefits during particular periods of time and the overpayments are debts due to the Commonwealth.
What is the amount of the debts?
The Tribunal has considered the available evidence to determine when Mrs Janssen’s employment income was, pursuant to the Act, ‘earned, derived or received’ during the relevant time. In the course of these Tribunal proceedings, the Respondent obtained further evidence regarding Mrs Janssen’s employment income from her employers and a new calculation of Mr Janssen’s DSP debt undertaken by the Agency was provided to the Tribunal.[64] The new calculations result in a DSP debt amount for Mr Janssen of $24,781.20 during the period from 2016 to 2021, an increase of $5,689.83.[65] This necessarily results in corresponding changes to both Applicants’ family assistance debts. The Tribunal is satisfied that the recalculated DSP debt amount of $24,781.20 is correct, based on the best available evidence of Mrs Janssen’s employment income. In this regard, the Tribunal is satisfied with the Agency’s approach of recognising Mrs Janssen’s income at the point at which it was first received by her, having regard to the relevant pay date. The Tribunal in Judd and Secretary, Department of Social Services [2022] AATA 727 accepted that this approach to debt calculation was open.
[64] Exhibit 3, pages 686-787.
[65] Ibid., page 757.
There were two exceptions to the above approach. The payslip information demonstrates that Mrs Janssen received back pay following agreed increases to her fortnightly salary, which had retrospective effect.[66] Mrs Janssen also received lump sum payments for leave loading.[67] Since those payments are lump sum amounts in respect of periods greater than a fortnight, the Agency has assessed those amounts across the period to which the payments relate under then section 1073A of the Act, which provision was replaced from 7 December 2020. From that date, the Agency has recognised Mrs Janssen’s employment income in accordance with the new employment income attribution rules, including the current section 1073A of the Act.
[66] Ibid., page 753. See, for example, Exhibit 1, page 549.
[67] See, for example, Exhibit 1, page 551.
In advance of the Tribunal hearing, the Respondent provided a provisional recalculation of the Applicants’ family assistance debts based on the recalculation of Mr Janssen’s accepted DSP debt amount of $24,781.20. The total amount of the debts, according to those recalculations, is $63,742.96 and is constituted as follows:
(a)Mr Janssen’s DSP debt in the amount of $24,781.20 during the period from 17 February 2016 to 9 March 2021;
(b)Mr Janssen’s FTB debt for the 2017/2018 financial year in the amount of $872.16 (a decrease of $37.52);
(c)Mrs Janssen’s FTB debt for the 2017/2018 financial year in the amount of $6,048.24 (an increase of $1,437.46);
(d)Mrs Janssen’s FTB debt for the 2018/2019 financial year in the amount of $13,378.91 (a decrease of $905.67);
(e)Mrs Janssen’s FTB debt for the 2019/2020 financial year in the amount of $15,884.64 (a decrease of $159.68); and
(f)Mrs Janssen’s CCB debt for the 2017/2018 financial year in the amount of $2,777.81 (an increase of $1,579.76).
While the Tribunal does not doubt the veracity of the above quantum of the debts based on the Agency’s recalculation, the Tribunal will set aside the decision under review and remit it to the Agency for reconsideration with directions, among others, that the balance of the debts are to be recalculated based on Mr Janssen’s DSP debt amount of $24,781.20 and those recalculated debts, together with that DSP debt, are debts owing to the Commonwealth under the Act and the FA Administration Act.
Should the debts be recovered?
In Secretary, Department of Social Security v Coralie Hales (1998) 82 FCR 154 at 155, Justice French (as he then was) espoused the principle that the Australian community or ‘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’. To this end, and as set out above, the Parliament through the aforementioned legislation has provided for social security and family assistance debts otherwise due to the Commonwealth to be written off or waived in certain circumstances.
Write off
Subsection 1236(1A) of the Act and subsection 95(1) of the FA Administration Act provide that the Respondent, or here the Tribunal, may on behalf of the Commonwealth decide to write off a debt for a period of time. However, a debt may only be written off if the debt is irrecoverable at law, the debtor has no capacity to repay the debt, the debtor’s whereabouts are unknown, or it is not cost effective for the Commonwealth to pursue action to recover the debt.
Subsection 1236(1B) of the Act sets out the circumstances when a debt is irrecoverable at law. Subsection 1236(1C) of the Act and subsection 95(4) of the FA Administration Act relevantly provide 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.[68] In Feneley and Secretary, Department of Family and Community Services [2003] AATA 496 (Feneley) at [36], the Tribunal stated that:
Severe financial hardship is not defined in the Act. However, the meaning of the term, while not implying destitution goes beyond straightened financial circumstances and imports a need for the particular circumstances of a person to include suffering of a severe or extreme nature.
[68] Re Lumsden and Secretary Department of Social Security [1986] AATA 228; Secretary, Department of Family and Community Services and Birgden [2003] AATA 67; and Klaverstyn and Secretary, Department of Family and Community Services [2003] AATA 71.
The Tribunal finds that the Applicants’ debts are not irrecoverable at law. The evidence before the Tribunal does not establish that the Applicants are unable to repay the debts. Mrs Janssen is employed and has had an annual taxable income of over $100,000 since the 2018/19 financial year. The Applicants would likely be able to enter into a payment plan to repay their debts in instalments. As set out above, subsection 1236(1C) of the Act and subsection 95(4) of the FA Administration Act relevantly provide 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. Accordingly, based on the available evidence before the Tribunal, while acknowledging that repayment of the debts will put the Applicants under financial strain, the recovery of the debts would not cause the Applicants ‘severe financial hardship’, as it is understood pursuant to Feneley and other Tribunal decisions mentioned above and it is cost effective for the Agency to recover the debts.
The Tribunal is therefore not satisfied that there are grounds to write off the debts. In this regard, the Tribunal finds that the debts cannot be written-off under section 1236 of the Act or section 95 of the FA Administration Act on the grounds that the debts are not irrecoverable at law; the Applicants have capacity to repay the debts; and repayment of the debts would not result in the Applicants experiencing severe financial hardship.
Waiver
Sole administrative error
Under subsection 1237A(1) of the Act and section 97 of the FA Administration Act, the Respondent, or here the Tribunal, must waive the right to recover a debt that is ‘attributable solely to an administrative error made by the Commonwealth’ if the debtor received the payments the subject of the debt in good faith.
In Gerhardt and Department of Employment, Education and Training [1996] AATA 173 the Tribunal stated at [36] that the word ‘solely’ was to be given its ordinary meaning, being ‘only’ and ‘to the exclusion of all else.’ To this end, the duty to waive a debt does not extend to those debts attributable to errors or other factors independent of any administrative error made by the Commonwealth.
In this regard, the Tribunal in Ward and Secretary, Department of Family and Community Services [2000] AATA 212 at [47], referring to the Federal Court’s judgment in Gerhardt v Secretary, Department of Employment, Education and Training [1997] FCA 815, said ‘solely’ in subsection 1237A(1) of the Act:
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.
Additionally, in Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190 at [35]-[37], the Full Federal Court of Australia said of ‘solely’ in subsection 1237A(1) of the Act:
The ordinary or usual interpretation of the phrase ‘attributable solely to’ is that it refers to the single or sole cause of the relevant act or event. The word ‘attributable’ means ‘capable of being attributed’. It involves an objective assessment of causation. The words ‘a debt attributable solely to an administrative error’ can be paraphrased as meaning that the only cause that objectively can be ascribed to the relevant debt is an administrative error …
This is the meaning of the phrase which the primary judge purported to adopt and apply. He drew attention to the fact that the decision to issue the notice was a discretionary decision. This necessarily means that there was more involved in that decision than merely identifying that the pre-conditions for making it had been met. Although there was no evidence before either the Tribunal or the primary judge identifying the reasons for that discretionary decision, nevertheless the primary judge was correct to conclude that ‘the giving of the notice was not itself an administrative error’, or at least there was no evidence that it was. Implicit within this conclusion is an acceptance by the primary judge not only that the legal pre-conditions for the issue of the notice were present, but also that there was no administrative error in respect of the policy considerations involved in that discretionary decision …
Further, it is inappropriate to use a ‘but for’ test to determine a sole cause. A ‘but for’ test is a test to determine a case – it is not a test for determining the sole cause: see the comparison drawn by Callinan J between the ‘but for’ test and ‘solely caused’ in I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41; (2002) 192 ALR 1 at 51-52 [210]. Indeed, even as a test to determine a cause, it is too broad for some purposes such as to establish causation in tort: see Gummow and Kirby JJ in Tame v New South Wales [2002] HCA 35; (2002) 191 ALR 449 at 501 [211].
The Tribunal finds that the debts cannot be solely attributed to any error made by the Commonwealth. The debts arose because the Agency was not advised of changes to Mrs Janssen’s employment and fortnightly employment income for the purposes of calculating the rate of the relevant social security and family assistance payments. Mr Janssen was sent notices under subsection 68(2) of the Administration Act stating that his entitlements were being calculated based on the reported combined earnings of $2,106.62 per fortnight and advising him that he was required to advise of changes to his or his partner’s earnings, being Mrs Janssen. Since approximately September 2016, Mrs Janssen’s fortnightly employment earnings were above the reported $2,106.62 amount and increased to more than double that amount during the relevant period. The Applicants failed to report these updated fortnightly earnings amounts to the Agency over approximately 5 years. As set out above, in October 2016, Mr Janssen was sent a text message reminding him of his obligations to report changes to his circumstances. Despite Mrs Janssen beginning work with a new employer only one month prior in September 2016, the Agency was not advised about that change of circumstances, including the increased fortnightly income amounts.
For the avoidance of doubt, the Tribunal does not accept the Applicants’ submission that the notices sent to them by the Agency in relation to social security payments did not provide for any specific method of reporting updated income information. The notices clearly set out how to contact the Agency in a variety of forms. In this regard, the Tribunal also does not accept that using the ‘MyGov’ app was assumed by the Applicants to be the only way to update their income information. The Applicants had received numerous notices from the Agency detailing the means by which to report updated employment income for the purpose of calculating their social security payments. By failing to report updated details of his partner’s employment or changes to his partner’s fortnightly income, Mr Janssen contributed to the debts and the Tribunal accordingly does not find that the error was solely attributable to the Commonwealth.
In this regard, the Tribunal has regularly found that there can be no sole administrative error on the part of the Commonwealth in circumstances where a person has failed to comply with their notice obligations.[69]
[69] See, for example, Stafford and Secretary, Department of Social Services [2018] AATA 2764 at [78]; and Ghanem and Secretary, Department of Social Services [2022] AATA 160 at [41]-[42].
The Applicants contended that the debts arise solely because of the Agency’s error in circumstances where the Applicants updated their annual income estimates as required for the purposes of their family assistance payments. However, there are different notification requirements for income support payments (such as DSP), which are paid in instalments by reference to regular instalment periods, and family assistance payments (such as FTB) which are calculated based on a yearly estimate of income. As set out above in this decision, both Mr and Mrs Janssen received numerous notices from the Agency advising them about those different notification requirements. Mrs Janssen received 69 letters which included that information. The Tribunal is satisfied that the debts are attributable to the Applicants’ failure to report changes to the Agency regarding Mrs Janssen’s employment and fortnightly income. In those circumstances, the Tribunal does not accept that the debts are attributable solely to any administrative error by the Agency. The Tribunal notes that earlier Tribunal decisions have found accordingly in similar circumstances.[70]
[70] Secretary, Department of Education, Employment and Workplace Relations and Brookes [2008] AATA 501 at [12]-[14]; Rosser and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2009] AATA 475 at [32]-[33]; Tabije and Secretary, Department of Social Services [2014] AATA 778 at [62]-[64]; Barnes and Secretary, Department of Social Services [2014] AATA 786 at [48]; YKBJ and Secretary, Department of Social Services [2015] AATA 65 at [48]-[51]; Centkowska and Secretary, Department of Social Services (Social services second review) [2016] AATA 342 at [25]-[28]; and Secretary, Department of Social Services and Waqar [2020] AATA 1493 at [37] and [40]-[42].
Decisions to the contrary were made by the Tribunal in Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Walsh & Anor [2008] AATA 75 (Walsh) and Waddell and Secretary, Department of Employment and Workplace Relations [2006] AATA 557 (Waddell). However, as set out below, this Tribunal finds that the matters the subject of the present applications are distinguishable from these particular decisions.
First, unlike in Walsh, the Applicants in the present proceedings were notified on numerous occasions of the different notification requirements between family assistance payments and DSP. As a result, the Tribunal is not satisfied that the Applicants could not have been ‘expected to appreciate this subtlety’.[71]
[71] Walsh at [30].
Second, while the Tribunal accepts that the Applicants ‘diligently’ advised the Agency of changes in Mrs Janssen’s yearly income estimates for FTB purposes, unlike in Waddell Mr Janssen had no reason to assume that his record was at the same time being updated in relation to his DSP.[72] To this end, Mr Janssen received information notices in 2019 under subsection 68(2) of the Administration Act, well after Mrs Janssen commenced employment with FACS, which notices continued to indicate the erroneous combined income amount of $2,106.62 per fortnight upon which his DSP was being calculated by the Agency. The Tribunal finds that Mr Janssen’s failure to contact the Agency to correct that amount contributed to the raising of the debt.
[72] See Waddell at [18](v).
The AAT1 found, in relation to the Applicants, that any debt from 26 November 2020 onwards was solely attributable to administrative error by the Agency. This was based on a record in Mr Janssen’s electronic file held by the Agency, which relevantly stated as follows:[73]
Reason why an Action doc is Necessary: CSUt on DSP has EANS recorded for partner $54772.12 per annum. Ptr has and FTB income est of $113000, follow up required as EANS has been coded from 2014 and cus may not be aware of advising both ISP and FTB.
[73] Exhibit 2, page 631.
While the Agency was aware by 26 November 2020 that the Applicants may have failed to comply with the requirement to report changes to Mrs Janssen’s fortnightly income, the Tribunal is not satisfied that any overpayment by the Agency of social security or family assistance payments from that date was solely due to any administrative error by the Agency. That is, the debts primarily arose due to the Applicants’ failure to comply with the reporting requirements for Mr Janssen’s DSP. After 26 November 2020, the Agency requested further information from Mr Janssen in order to investigate his entitlement to DSP. Following the provision of that information, the Agency made the decisions to raise the debts. For the avoidance of doubt, the Tribunal is not satisfied that time spent by the Agency investigating the issue to determine whether there had been overpayments can be considered the sole reason why the debts for that period arose. Neither can any possible inaction on behalf of the Agency from November 2020 be the sole reason for the accrual of the debts. The Agency had to request employment and earnings income from the Applicants as a result of their failure to report their correct fortnightly income over a long period of time. The responsibility for updating fortnightly employment income lay with the Applicants and they failed to do so over many years, including after this interaction with the Agency in November 2020 and into early 2021, hence the raising of the debts by the Agency. As a result, the Tribunal is not satisfied that the debts that arose in this particular period were due to the sole administrative error of the Commonwealth. The Applicants played a not insubstantial role in the continuing accrual of the debts during this time given their previous failure to correct the reportable employment income the Agency relied upon to calculate their collective social security and family assistance payments.

In this regard, there is no responsibility on the Agency to ‘police’ the behaviour of benefit recipients to ensure that they are being paid the correct entitlements.[74] The Applicants were both sent information notices which advised them of their obligation to advise the Agency of changes to their circumstances that could affect their social security and family assistance payments. The Applicants failed to comply with their reporting obligations over a substantial period of time. Mrs Janssen received almost 70 information notices from June 2017 to March 2021 in relation to her payments. Mr Janssen also received multiple information notices from the Agency which then contained incorrect income information that was used as the basis for calculating his social security payment entitlements. This information was not amended for a substantial period of time. The onus to read such notices and update the Agency lay with the Applicants.[75] For these reasons, the Tribunal is not satisfied that any part of the debts are attributable solely to any administrative error made by the Agency on behalf of the Commonwealth.
[74] See Saab and Secretary, Department of Social Services [2021] AATA 2766 at [66].
[75] See Secretary, Department of Social Services and Vella [2021] AATA 4051 at [70].
As a result of the above findings, the Tribunal is satisfied that the debts cannot be waived under section 1237A of the Act or section 97 of the FA Administration Act, because there is no administrative error attributable solely to the Commonwealth.
As previously set out in this decision, section 1237A of the Act and section 97 of the FA Administration Act, providing for waiver of a debt due to sole administrative error, also require that the person received the relevant payment that gave rise to the debt in good faith. Based on the Tribunal’s above finding that no part of the debts are attributable solely to an administrative error made by the Commonwealth, there is no requirement to consider whether the Applicants received the payments in good faith and the Tribunal makes no findings in that regard.
In addition to the ‘good faith’ element in the sole administrative error provisions of the Act and the FA Administration Act, subsection 97(2)(b) of the FA Administration Act provides that the administrative error proportion of a debt must be waived if the person would suffer ‘severe financial hardship’ if the debt were not waived.
Again, because of the Tribunal’s above finding that no part of the debts are attributable solely to an administrative error made by the Commonwealth, there is no requirement to consider whether the Applicants would suffer severe financial hardship pursuant to subsection 97(2)(b) of the FA Administration Act and the Tribunal makes no findings in that regard.
Special circumstances
As set out above in this decision, pursuant to section 1237AAD of the Act and section 101 of the FA Administration Act, the Respondent, or here the Tribunal, may waive the right to recover all or part of a debt if satisfied of the following cumulative elements: the debt did not result from the debtor ‘knowingly’ making a false statement or ‘failing or omitting to comply’ with a provision of the social security legislative framework; and there are ‘special circumstances (other than financial hardship alone) that make it desirable to waive’; and it is ‘more appropriate to waive than to write off the debt or part of the debt’.
The term ‘special circumstances’ is not defined in either the Act or the FA Administration Act. However, its meaning has been considered by the Tribunal and the Federal Court. The term ‘special circumstances’ was considered by the Tribunal in Beadle and Director-General of Social Security (1984) 6 ALD 1 at [12] to mean circumstances that are ‘unusual, uncommon or exceptional’. Although the circumstances need not be unique, they ‘must have a particular quality of unusualness that permits them to be described as special’ and be ‘markedly different from the usual run of cases’.[76] In this regard, the Tribunal in Davy and Secretary Department of Employment and Workplace Relations [2007] AATA 1114 (Davy) at [80], stated that the provision ‘necessarily requires a consideration of the person’s individual circumstances but also a consideration of the general administration of the social security system’. Furthermore, in Dranichnikov and Centrelink [2003] FCAFC 133 at [66], the Full Federal Court of Australia stated that ‘[t]o some extent the question whether there were special circumstances must depend on how it came about that the error occurred’.[77]
[76] Ibid.
[77] The term ‘special circumstances’ has been considered in numerous other proceedings, including: Groth and Secretary Department of Social Security (1995) FCA 1708; Re Ivovic and Director General of Social Services (1981) 3 ALN N95; and Angelakos and Secretary Department of Employment and Workplace Relations [2007] FCA 25.
The Tribunal is not satisfied that the Applicants’ circumstances, individually or collectively, are sufficiently ‘unusual, uncommon or exceptional’ or otherwise ‘special’ to warrant exercise of the discretion in either section 1237AAD of the Act or section 101 of the FA Administration Act to waive all or part of the debts.
The Tribunal accepts the evidence regarding the Applicants’ various medical conditions and that of Mrs Janssen’s daughter.[78] In Purches and Secretary, Department of Family and Community Services [2005] AATA 267 at [55] – [56], the Tribunal stated the following in relation to whether an applicant’s medical conditions could be considered ‘special circumstances’:
There are a number of cases in which health circumstances were found not to constitute special circumstances: Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464, Re Groth and Secretary, Department of Social Security [1995] AAT1 121; (1995) 37 ALD 797, Re Colaiacolo and Secretary, Department of Social Security (AAT N84/439, 24 April 1985).
I accept that her overall health may be deteriorating. However, at this time, I do not regard her conditions to be so debilitating as to distinguish her from other women of her age, such as to amount to circumstances which are special.
[78] See, for example, Exhibits 4, 5, 6 and 7.
While acknowledging the difficult medical conditions experienced by the Applicants and their family, the Tribunal is not satisfied that the medical evidence establishes that those medical difficulties are of a severity to distinguish the Applicants from the ordinary or usual case. For example, while accepting the evidence that Mr Janssen has had an inability to work due to a previous workplace injury, he had been in receipt of DSP until 2021, but is reportedly now no longer receiving that social security payment.
For completeness, and noting that financial hardship alone is not sufficient to meet the test of ‘special circumstances’, based on the available evidence, the Tribunal is satisfied that the Applicants are in a better financial position than most recipients of social security payments, primarily due to Mrs Janssen’s present employment income. Moreover, the Applicants’ payment of legal fees in relation to a separate proceeding does not distinguish this matter from the ordinary or usual case.[79] Additionally, while the Tribunal acknowledges the difficulty associated with the Applicants’ house being damaged by recent flooding, the evidence indicates that they have made an insurance claim in relation to that incident.[80]
[79] Exhibit 9.
[80] Exhibit 8.
In totality, and compared to the circumstances of others either in receipt of, or reliant on, income support payments, the Tribunal is not satisfied that the Applicants’ circumstances are distinguishable to the extent that they could be considered ‘special’, enlivening waiver of all or part of the debts under either the Act or the FA Administration Act. Having considered the Applicants’ circumstances and submissions, the Tribunal is not satisfied that their circumstances would make it unfair, unreasonable or unjust for the debts to be recovered by the Commonwealth.
The requisite elements in both section 101 of the FA Administration Act and section 1237AAD of the Act are cumulative, such that each of the three limbs must be satisfied to enliven the discretion to waive all or part of a debt. The Tribunal has found that one of those limbs has not been met, being the requirement that there are special circumstances that make it desirable to waive. Accordingly, the Tribunal is not required to consider the two other limbs, one being whether the Applicants knowingly made a false statement or representation or failed or omitted to comply with a provision of the social security or family assistance law. As a result, the Tribunal does not make any findings in relation to those particular matters.
For the above reasons, the Tribunal finds that the Commonwealth is owed the debts by the Applicants and their recovery should not be waived pursuant to either section 1237AAD of the Act or section 101 of the FA Administration Act.
CONCLUSION & DECISION
The Tribunal has found that, during the relevant periods of time between 2016 and 2021, the Applicants accrued substantial social security and family assistance debts, likely to total approximately $63,742.96, which debts are owing to the Commonwealth. The Tribunal is not satisfied that the debts should either be written off or waived pursuant to the relevant social security and family assistance legislation. In accordance with Davy, the Tribunal is satisfied that there is no injustice in requiring the Applicants to repay monies of which they have had the benefit but not the entitlement.[81]
[81] At [80].
Accordingly, pursuant to subsection 43(1)(c) of the Administrative Appeals Tribunal Act 1975, the decision under review is set aside and the matter is remitted to the Respondent for reconsideration in accordance with directions that:
(a)Mr Janssen was overpaid the amount of $24,781.20 for the DSP;
(b)The other debts before the Tribunal are to be recalculated based on the above DSP debt amount;
(c)The DSP debt and other recalculated amounts are debts due to the Commonwealth; and
(d)Those debts are not to be written-off or waived.

I certify that the preceding 116 (one-hundred and sixteen) paragraphs are a true copy of the reasons for the decision herein of Member W Frost.

......................[SGD]..................................................
Associate
Dated: 1 May 2023

Date of hearing: 15 February 2023

Date final submissions received:

26 September 2022

Applicant:

By MS Teams

Counsel for Respondent:

Solicitor for Respondent:

Mr Matt Sherman

Mr Matthew Sheedy, Sparke Helmore Lawyers

Date of hearing:	15 February 2023
Date final submissions received:	26 September 2022
Applicant:	By MS Teams
Counsel for Respondent: Solicitor for Respondent:	Mr Matt Sherman Mr Matthew Sheedy, Sparke Helmore Lawyers