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

[2023] AATA 2602

Jones and Secretary, Department of Social Services (Social services second review) [2023] AATA 2602 (17 August 2023)

Division:General Division 

File Number(s):2021/9600      

Re:Beverley Jones  

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Senior Member R Bellamy

Date:17 August 2023

Place:Brisbane

In accordance with subsection 43(1) of the Administrative Appeals Tribunal Act 1975 the decision of the Social Services and Child Support Division of the Administrative Appeals Tribunal as varied by the Respondent pursuant to section 182 of the Social Security Administration Act 1999 on 18 November 2022 to raise and recover a debt of $40,079.84 against the Applicant for the period of 13 November 2009 to 19 May 2016 is affirmed.

.............................[SGD]...............................

Senior Member R Bellamy

Catchwords

Social Security – Disability Support Pension – Overpayment due to own and partner’s income not being taken into account – Honest belief that income was reported – Whether to waive or write-off the debt – Whether debt due to sole administrative error – Whether special circumstances make it desirable to waive whole or part of the debt

Legislation

Social Security Act 1991
Social Security (Administration) Act 1999

Cases

Beadle v. Director-General of Social Security (1985) 7 ALD 670

Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114

Groth v Secretary, Department of Social Security (1995) FCA 1708

Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190

Salangsang and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 55

REASONS FOR DECISION

Senior Member R Bellamy

17 August 2023

1. Mrs Jones was in receipt of Disability Support Pension (“DSP”) as she suffers from bi-polar disorder. DSP is subject to an income test so her rate of payment depended on how much income she and her husband, Mr Jones, derived. Between 2009 and 2016, increases in Mr Jones’ income were not taken into account in the calculation of Mrs Jones’ rate of DSP, resulting in her being overpaid by around $40,000. Mr and Mrs Jones claim they provided accurate information about Mr Jones’ income, and they think the debt should be written off or waived. They also question the accuracy of the debt amount.

2. The debt can be written off, temporarily or permanently, if is irrecoverable at law, if Mrs Jones has no capacity to repay the debt, or it is not cost effective for the Commonwealth to take action to recover the debt. Alternatively, any portion of the debt that it solely attributable to Centrelink’s error must be waived (meaning it does not ever have to be paid), or the debt may be waived if special circumstances make it desirable that the debt be waived. The Respondent’s position is that the Joneses did not give Centrelink accurate information about Mr Jones’ income (although no dishonesty is alleged) and that the debt should not be written-off or waived.   

3. In 2016, when Centrelink took Mr Jones’ true income into account, it stopped paying DSP to Mrs Jones and raised a debt of $41,056.46. This was affirmed by internal review, and then subsequently by the Social Services and Child Support Division of the Tribunal (“SSCSD”) in December 2017. Centrelink took $30 per fortnight from Mrs Jones’ Carer payment to repay the debt by increments. Mrs Jones sought review of the SSCSD decision in December 2021. Centrelink obtained more detailed information about Mr and Mrs Jones’ income and recalculated the overpayment which resulted in a slightly different debt amount. Accordingly, the SSCSD decision was varied by the Respondent pursuant to section 182 of the Social Security (Administration) Act 1999 (“the Administration Act”). The varied decision is taken to be the decision under review in this application.[1] The reviewable decision is that there was an overpayment of DSP in the amount of $40,079.84, that was incurred between 13 November 2009 and 19 May 2016 (“the debt period”) that is a recoverable debt due to the Commonwealth.

   [1] Subsection 182(2) of the Administration Act.

4. The statutory provisions that apply to this review in terms of establishing a debt are those that existed in the Social Security Act 1991 (“the Act”) and the Administration Act at the time the relevant events took place. The provisions that apply to possible write-off or waiver are found in the current legislation.

5. Section 117 of the Act relevantly provided that the rate of a person’s DSP was worked out using the Pension Rate Calculator A at the end of section 1064. Module A of the Rate Calculator established the overall rate calculation process. The remaining Modules provided for the calculation of the component amounts used in the overall rate calculation. Module F contained the income test, which calculated the effect a person’s ordinary income and their partner’s ordinary income on their maximum rate of payment. It is uncontroversial that income included employment income.

6. During the debt period, section 1073B of the Act effectively provided that any income earned during an instalment period was spread evenly across that period as though equal amounts were earned on each day in the period. Section 1073C of the Act effectively provided that the rate of a person’s payment on a fortnightly basis could be worked out by multiplying that amount by 14. The rate of the person’s employment income on a yearly basis could be worked out by multiplying the amount by 364. Section 98 of the Act provided that a person’s DSP was not payable if the rate was nil. I note that in 2022, Centrelink was able to establish what both Mr and Mrs Jones earned each day of their respective employment in the debt period.

7. 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;
   (f) 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.

8. Subsection 68(2) of the Administration Act 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.

9. Subsection 66A(2) of the Administration Act relevantly provides that if a social security payment is being paid to a person and an event or change of circumstances occurs that might affect the payment of that social security payment the person must, within 14 days after the day on which the event or change occurs, inform the Department of the occurrence of the event or change.

10. Subsection 1223(1) of the Act relevantly provides that if:

    “a social security payment is made; and 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.”

11. Mrs Jones was in receipt of DSP from 19 March 2008 to 7 June 2016.[2] It was not in dispute that Mr Jones was Mrs Jones partner during the debt period. Mrs Jones was briefly employed between 20 September 2010 and 3 January 2011.[3] Mr Jones was employed on a full-time basis from 23 November 2009 for the entire debt period, and he remains so employed.

    [2] Exhibit T1, T-Documents, T14, page 477.

    [3] Exhibit T2, Supplementary T-Documents, ST5, ST6.

12. On 6 August 2009, Mrs Jones was provided with letter from Centrelink listing Mr Jones’ income as $1,692.30 per fortnight. The letter asked her to advise within 14 days if any of the information contained in it was incorrect. Similar notices were issued on 14 September and 19 October 2009 and 21 January 2010.[4] 

    [4] Exhibit T1, T-Documents, T15, pages 626 to 627, 639 to 641, 645 to 648.

13. On 3 November 2009, Mrs Jones contacted Centrelink in relation to her DSP. She said she noticed that her statement included a gift from the Uniting Church of $49.95 per month and she advised that she was no longer receiving this gift. The gift was then “zeroed off”.[5]

    [5] Exhibit T1, T-Documents, T14, page 442.

14. In February 2010, Mrs Jones provided the following information about Mr Jones’s income in response to a notice under section 192 of the Administration Act seeking copies of his payslips

    ·     from 23 November 2009 to 29 November 2009 Mr Jones earned $969.27; and

    ·     from 30 November 2009 onwards, he earned $1,938.55 per fortnight.[6] 

    [6] Exhibit T1, T-Documents, T14, page 445.

15. As a result, on 2 February 2010, Centrelink recorded $1,938.55 per fortnight as Mr Jones’ ongoing income. As this amount was recorded as ongoing, Mrs Jones was not required to regularly update Centrelink about Mr Jones’ income, only to report any changes.  

16. As Mr Jones was earning more than had previously been reported to Centrelink, Mrs Jones had been overpaid by $197 from 27 November 2009 to 21 January 2010 and Centrelink raised a debt in that amount.[7] On Mrs Jones’ behalf, Mr Jones asked for that decision to be reviewed, claiming they had regularly updated Centrelink about his income, and that they had in fact overstated his income if anything. He added that a salary packaging deduction of $628.74 per fortnight should not be treated as income by Centrelink.[8] An internal review resulted in the debt being affirmed.[9]

    [7] Exhibit T1, T-Documents, T15, page 652.

    [8] Exhibit T1, T-Documents, T14, page 444.

    [9] Exhibit T2, Supplementary T-Documents, ST1.

17. I briefly digress here to deal with the salary packaging issue. Mr Jones had a salary packaging arrangement where $628.74 of his gross (pre-tax) salary per fortnight was directed to certain nominated expenses. That is, he was able to apply it to certain personal expenses without having to pay tax on it first. That had the effect of reducing Mr Jones’ taxable salary by $628.74 per fortnight. For the purposes of the income test, Centrelink effectively included the $628.74 in Mr Jones’ income in line with paragraph 4.3.3.60 of Centrelink’s Guide to Social Security Law. That is, Centrelink used a figure that was Mr Jones’ gross fortnightly income before the salary packaging amount was deducted.

18. On 4 March 2010, Centrelink issued a notice to Mrs Jones in relation to her DSP pursuant to subsection 68(2) of the Administration Act. This notice indicated that combined fortnightly earnings of $1,938.55 were recorded. It included the following (relevant) information:

    “WHAT YOU HAVE TO TELL US ABOUT
    You must tell us within 14 days…if any of the things listed below happen or are likely to happen…You can tell us by writing to us, by calling or you can come in and talk to us at any of our customer service centres. This request is an information notice given under social security law.
    If your income changes
    

    [10]Exhibit T1, T-Documents, T15, page 655.

    (income means your gross income before you pay any tax…), that is if:…your partner (sic) work changes…”[10] 

19. Centrelink sent a similar notice on 10 March 2010.[11]

    [11] Exhibit T1, T-Documents, T15, page 657.

20. The annual income estimates that Centrelink recorded for the purpose of Family Tax Benefit (“FTB”) from July to September 2010 were zero for Mrs Jones and amounts that ranged from $54,600 to $58,735 for Mr Jones.[12]

    [12] Exhibit T3, Further Supplementary Documents, ST10.

21. From September 2010, Mr Jones earned $2,483.85 per fortnight ($64,580 annually).

22. On 11 October 2010, Mrs Jones attended a Centrelink office and reported her income from her employer. On 14 October 2010, her ongoing weekly earnings were recorded as $513.39[13] and she was sent another notice indicating that Mr Jones’ income was recorded as $1,938.55 per fortnight. She was not paid, DSP from 3 September 2010 to 23 December 2010.[14]

    [13] Exhibit T3, Further Supplementary Documents, ST17.

    [14] Exhibit T3, Further Supplementary Documents, ST11.

23. On 21 December 2010, Mrs Jones told Centrelink that she would be on leave without pay from 31 December 2010 until further notice.[15] She did not return to her employment but she was paid $102.68 on 3 January 2011 which appears to be pay for a public holiday. Mrs Jones’ bipolar disorder makes it difficult for her to maintain employment. 

    [15] Exhibit T3, Further Supplementary Documents, ST7.

24. Centrelink sent further notices to Mrs Jones about her DSP on the following dates:

    ·31 March 2011[16]

    [16] Exhibit T1, T-Documents, T15, page 531.

    ·15 April 2010[17]

    [17] Exhibit T1, T-Documents, T15, page 663.

    ·08 July 2010[18]

    [18] Exhibit T1, T-Documents, T15, page 690.

    ·23 August 2010.[19]

    ·12 October 2023[20]

    ·06 January 2011[21]

    ·23 June 2011[22]

    ·15 September 2011[23]

    ·08 December 2011[24]

    ·01 March 2012[25]

    ·24 May 2012[26]

    ·16 March 2016[27]

    ·09 May 2016[28].

    [19] Exhibit T1, T-Documents, T15, page 704.

    [20] Exhibit T1, T-Documents, T15, page 744.

    [21] Exhibit T1, T-Documents, T15, page 768.

    [22] Exhibit T1, T-Documents, T15, page 543.

    [23] Exhibit T1, T-Documents, T15, page 776.

    [24] Exhibit T1, T-Documents, T15, page 550.

    [25] Exhibit T1, T-Documents, T15, page 785.

    [26] Exhibit T1, T-Documents, T15, page 789.

    [27] Exhibit T1, T-Documents, T15, page 581.

    [28] Exhibit T1, T-Documents, T15, page 586.

25. Each notice indicated that Mr Jones’ fortnightly income was recorded as $1,938.55 and included information about Mrs Jones’ reporting obligations.

26. In addition to the obligations that arose from each of these notices, Mrs Jones was under a standing obligation to inform Centrelink of any increase in Mr Jones’ income within 14 days of it happening (pursuant to subsection 66A(2) of the Administration Act).

27. In January 2011, Mr Jones income increased to $2,671.40 per fortnight. It increased twice more, to $3,254.32 per fortnight in August 2013 and $3,325.50 per fortnight in July 2015.

28. To summarise, Mrs Jones was sent a total of 14 DSP notices during the debt period noting Mr Jones’ fortnightly income as $1,938.55 while he consistently earned significantly more than that. There is no record in Centrelink’s database of Mr Jones’ true income during the debt period, or of any communication from Mr or Mrs Jones about his income since February 2010. However, on the following dates Mrs Jones or Mr Jones contacted Centrelink about other matters concerning Mrs Jones’ DSP;

    ·13 August 2010 regarding a change of address;[29]

    ·2 September 2010 regarding an authority to release medical information;[30]

    ·22 September 2010 regarding a replacement concession card[31];

    ·3 September 2013 requesting an advance payment;[32]

    ·16 September 2013 enquiring about the portability of DSP while on an overseas holiday.

    [29] Exhibit T1, T-Documents, TT14, page 451.

    [30] Exhibit T1, T-Documents, TT14, page 453.

    [31] Exhibit T1, T-Documents, TT14, page 455.

    [32] Exhibit T1, T-Documents, TT14, page 475.

29. There are also records of contact being made about FTB and Carer Allowance.[33]

    [33] Exhibit T1, T-Documents, T14, page 432 to 521; Exhibit T4, Supplementary T-Documents, ST17, pages 10 to 65.

30. On 9 February 2016 Centrelink wrote to Mrs Jones after receiving information from the Australian Taxation Office about her income.[34] On 15 February 2016, Mrs Jones telephoned Centrelink and provided updated income information regarding her former employment. This resulted in a small debt being raised.[35] 

    [34] Exhibit T1, T-Documents, T14, page 480.

    [35] Ibid.

31. On 9 May 2016, Mrs Jones accessed online services to update her assets. Mr and Mrs Jones wanted a property that had been sold in his divorce in 1996 removed from their records. According to Mr Jones, Mrs Jones had attended an interview with Centrelink in which she was told that she had a quarter interest in that property. The update did not complete automatically. A common reason for that is the change in value is over a certain threshold amount so verification is required.[36] The attempted update was sent to a service officer to follow up. That person requested supporting information including a completed Income and Assets update form. Mrs Jones submitted the form in which she provided details of the ownership and value of banks accounts, motor vehicles and the property in question. She did not provide details of Mr Jones’ income.[37] 

    [36] Transcript Hearing Day 2 (24 March 2023), page 33, lines 4 to 13.

    [37] Exhibit T1, T-Documents, T14, page 484.

32. According to Mr Jones, it took several approaches from him and Mrs Jones to have the property removed from their records, and Centrelink did not have any records of their initial approaches. He offered this as just one example of Centrelink being unreliable in terms of keeping records and acting on information provided. Without making a finding either way about this particular interaction with Centrelink, I acknowledge that it is well known that sometimes Centrelink makes mistakes. I have no difficulty accepting the general proposition that the Jones could have provided information to Centrelink that was not properly recorded or acted upon.

33. Centrelink sought more information including Mr Jones’ payslips. Mrs Jones provided a payslip dated 15 May 2016 and Mr Jones’ PAYG summary statement for the 2014/15 financial year.[38] Mrs Jones subsequently provided payslips that covered 16 November 2009 to 22 May 2016, and payment summaries for the financial years 2009/2010 to 2014/15.[39] Mr Jones complains that he did not consent to his payslips being provided: he said they were provided by Mrs Jones “under duress” in an abuse of power and that his privacy was breached. I do not accept that. As his income affected Mrs Jones’ entitlement to public money, Centrelink’s request for accurate evidence about it was reasonable. Nor does his complaint about his privacy being breached sit well with a different complaint he made that Centrelink had failed to check his income with the Australian Taxation Office (“ATO”) every year.   

    [38] Exhibit T1, T-Documents, T8, pages 293 to 294; T-Document, T14, page 489.

    [39] Exhibit T1, T-DocumentsT6, and T7.

34. On 1 September 2016, Centrelink raised a debt in the amount of $39,438.49. In a joint letter from Mr and Mrs Jones, they asked for the decision to be reviewed and claimed that they had completed regular review forms that had been posted to them by Centrelink - at least one every financial year - for the past six years which had attached Mr Jones’ pay slips and end of year payment summaries. They claimed to have sent these forms to Centrelink by pre-paid, pre-addressed envelopes and to have handed some into a Centrelink office. They said Mrs Jones’ asked for a receipt each time she handed in a form and was told they did not issue receipts at that office. They also said they did not have the capacity to repay the debt.[40]

    [40] Exhibit T1, T-DocumentsT9.

35. In the hearing Mrs Jones said normally Mr Jones would complete forms that Centrelink sent them and she handed them in or they would post them. She said they were forms that required information to be filled in, they were “fairly general” asking for “an update of what [Mr Jones’] would earn in a year et cetera”, and “those forms state that if nothing has changed, you don’t have to return them.”[41]  Mrs Jones also indicated that to her knowledge Mr Jones’ income did not increase in the debt period.[42] She added that Mr Jones’ often overestimated his income so they would not end up in this situation.[43] Mr Jones claimed that they always attached a payslip, or on one occasion his income tax assessment, to the forms they returned.[44]

    [41] Transcript Hearing Day 1 (16 December 2022), page 17, lines 4 to 7.

    [42] Transcript Hearing Day 1 (16 December 2022), page 19, line 4.

    [43] Transcript Hearing Day 1 (16 December 2022), page 19, lines 15 to 16.

    [44] Transcript Hearing Day 1 (16 December 2022), page 34, lines 12 to 16.

1. It was evident that Mrs Jones’ mental health condition made it hard for her to understand Centrelink processes and she often relied on Mr Jones to deal with Centrelink on her behalf and to speak for her in these proceedings.[45] There were stressful times during the debt period with her and Mr Jones, at one point, having to relocate from Mackay to Brisbane because her disabled son was near death. Mr Jones was working full-time, supporting and acting for Mrs Jones whose bi-polar disorder waxed and waned. They each had family obligations. Mrs Jones seemed bewildered by the predicament that she is now in. She conceded she had a poor memory. Her evidence was somewhat vague and unclear, and some of it cannot be reconciled with the Centrelink records. However, there is nothing in the evidence she gave or in her conduct in these proceedings that gives me cause to think she set out to mislead Centrelink or the Tribunal.

   [45] Including in a statutory declaration that Mrs Jones made but was written for her by Mr Jones and reflects his recollection rather than hers.

2. Mr Jones’ evidence evolved and changed throughout the proceedings, so it is difficult to gain a clear picture of what he believes occurred. He, understandably, was not able to recall particular dates and events that occurred years ago. It was evident that he sometimes tried to reconstruct events based on what he thought must had happened. For example, in an affidavit, he asserted that:

   “…in relation to all requests from Centrelink…for information regarding my financial information, including but not being limited to my total gross financial earnings, any fringe benefits, and any change of circumstances, and in particular correspondence dated 4 March 2010, 10 March 2010, 15 April 2010, 20 July 2010, 23 August 2010,  14 October 2010, 6 January 2011, 31 March 2011, 23 June 2011, 8 December 2011, 1 March 2012, 24 May 2012, and 16 May 2016, that Beverly and I did reply within 14 days and provided any information relating to any change in circumstances which had occurred as set forward within the above mentioned correspondence.”[46]

   [46] Exhibit A6 Affidavit of Chris Davis affirmed 16 September 2022 paragraph 3.

3. However, he conceded in the hearing that he did not recall the specific correspondence referred to but rather he believed that he and Mrs Jones always responded to letters from Centrelink. I do not think he sought to mislead the Tribunal when he tried to reconstruct events or when he put forward reasons why he thought the debt was Centrelink’s fault, but it is difficult to make sense of his evidence when considered as a whole.  

4. One argument put forward by Mr and Mrs Jones was that there is an absence of information in Centrelink’s files from the end of 2011 to early 2016, despite Mrs Jones having made regular phone calls and regular attendances at Centrelink, and this suggests that information provided by the Joneses went into a “black hole”. However, as mentioned above, there are records of contact made by Mr and Mrs Jones in that period.[47]  

   [47] Exhibit T1, T-Documents, T14; Exhibit T4, further supplementary T-documents, ST17.

5. Mr Jones indicated that they believed Centrelink had previously used data matching with the ATO to access his income and it appeared to have stopped doing that after 2012 without notifying them. He said:

   “…given Centrelink’s regular practice of gaining information from the ATO…there was no reason to assume that Centrelink was not aware of our income. Hence, apart from the regular income information sent (which Centrelink has lost) there was no requirement to make any further disclosures.”[48]

   [48] Exhibit A1, Applicant’s Outline of Argument.

6. Mr Jones indicated that as Centrelink recorded four changes of address in the debt period, and they regularly reported his income, they had no reason to suspect Centrelink was not fully aware of their circumstances.

7. Here is where the evidence becomes inconsistent. In Mr Jones’ oral evidence, he recalled seeing the wrong income amount on notices from Centrelink and being concerned that there would be an overpayment and “that’s why the payslips are continually sent in”.[49]  This is not consistent with his evidence that he had no reasons to suspect that Centrelink did not have the correct income amount recorded.

   [49] Transcript Hearing Day 2 (24 March 2023), page 8, lines 7 to 13.

8. Further, he had previously given evidence that he said he assumed the amount of $1,938.55 per fortnight, which was well below what he was earning, must have been his income after the salary packaging amount had been deducted but that Centrelink was aware of this amount. First $1,938.55 is not what is left after the salary packaging amount was deducted from Mr Jones’ gross salary. Second, he later conceded that he knew the figure was incorrect and that is why payslips were provided.[50] He added that they provided payslips at least quarterly,[51] that sometimes they called Centrelink who would say they did not receive the information, and he did not know what more he and Mrs Jones could do.[52]

   [50] Transcript Hearing Day 1 (16 December 2022), page 43, lines 7 to 11.

   [51] Transcript Hearing Day 1 (16 December 2022), page 43, lines 45 to 48.

   [52] Transcript Hearing Day 1 (16 December 2022), page 44, lines 15 to 23.

9. Mr Jones further said the payslips from his employer were unreliable and misleading because they recorded full time hours as 76 hours per fortnight even if he had worked more hours, and he sometimes received reimbursements for work expenses (such as fuel for work cars and office stationery) that were recorded as income rather than separately identified as reimbursements, effectively inflating his income amount. However, the pay records clearly identify reimbursements, and they show that his income was consistent across consecutive pay periods as follows:

   ·    $2,671.40 for 16 consecutive pays from 10 December 2010 to 7 July 2011;

   ·    $3,254.32 for 24 consecutive pays from 16 August 2013 to 17 July 2014; and

   ·    $3,325.50 for 22 pays from 17 July 2015 to 19 May 2016. [53]  

   [53] Exhibit T3, Further Supplementary T-Documents, ST11.

10. There are no instances where his income is higher than what it should be for the hours worked which would indicate a reimbursement had been included in his income.     

11. I asked Mr Jones why he provided payslips to Centrelink if he thought they were misleading, and he said he also provided income tax assessments.[54]  He said Centrelink should have considered his assessable income “as reported by the ATO because that is the accurate amount”.[55] That is, Centrelink should have counted his gross income minus amounts spent for income earning purposes because that is “not really income”.[56] It is not the case that assessable income for income tax purposes is what Centrelink takes into account to work out the rate of payment of income support. Mr Jones’ evidence indicates that he was confused about how the income test applied to DSP and what had to be declared to Centrelink. 

    [54] Transcript Hearing Day 1 (16 December 2022), page 44, lines 24 to 30; page 45, lines 4 to 6.

    [55] Transcript Hearing Day 1 (16 December 2022) page 45, lines 19 to 27.

    [56] Transcript Hearing Day 1 (16 December 2022), page 45, lines 24 to 44.

12. Further, Mrs Jones’ DSP was not the only reason the Joneses had dealings with Centrelink. Mrs Jones was also receiving FTB and Carer Allowance, and she and Mr Jones dealt with Centrelink in relation to her son’s Youth Allowance. These benefits are calculated differently, and different reporting requirements apply. For example, parental income for the purposes of Youth Allowance is annual income based on a previous financial year which is different to reported employment income that is used to calculate a rate of payment each fortnight.[57] When Mr Jones was asked how he could have overestimated his income to Centrelink if he was providing payslips and tax assessments, he said he thought it might relate to FTB as they had to estimate the coming year’s annual income “and Centrelink would always balance the books at the end of the year”. He said he did not realise that DSP worked differently.[58] It seems likely that Mr Jones was confused about what had been reported for which benefit and for whom.      

    [57] Transcript Hearing Day 2 (24 March 2023) page 37, lines 4 to 10.

    [58] Transcript Hearing Day 1 (16 December 2022), page 50, lines 23 to 30.

13. The Centrelink records do not show that Mr Jones’ correct income was reported for the purposes of Youth Allowance. In any event, declaring income for Youth Allowance would not have satisfied Mrs Jones’s obligation to report Mr Jones’ income for her DSP. Nor do the Centrelink records show any updates for FTB after 9 September 2010.

14. Ms Brooke Harvey gave evidence about the process that Centrelink would have used to record income during the debt period. Her evidence was based on her experience as a Centrelink Service Officer and Assistant Director of Debt Policy, her understanding of the agency’s processes, and her review of Mrs Jones digital and physical files, as well as the digital files of Mr Jones. She indicated that the process is the same no matter how income is reported. Income is updated using the Earnings and Reporting Workflow or Employment Income Details (“EAN”) screens. The Earnings and Reporting Workflow updates the EAN screen automatically. The Document List screen would also be updated.

15. Ms Harvey acknowledged that although there are mechanisms for ensuring Centrelink officers follow the correct procedure every time, failure to correctly record income does occur on occasion. One way of catching that mistake is through the process whereby notices are sent to customers indicating what information Centrelink is using so a customer would know if information provided had not been recorded.[59]  

    [59] Transcript Hearing Day 2 (24 March 2023), page 32, lines 7 to 13.

16. Ms Harvey could not find anything on Mrs Jones’ digital record to indicate she had declared Mr Jones’ correct income until she provided his payslips in 2016. Nor could she find anything in Mr Jones’ digital record to indicate that he reported updates to his income during the debt period. Partner records are linked, so had Mr Jones reported income it would be apparent on Mrs Jones’ digital record. However, she said that if income had been reported for the purposes of Mrs Jones’ son’s Youth Allowance, she did not think it would also be recorded for the purposes of Mrs Jones’ DSP. 

17. Mr Jones made a Freedom of Information (“FOI”) request to the Respondent in January 2020. In his request he asked for “Details of any debts owed by me” followed by “Any notes, documents, correspondence or screens regarding any communication about the debts or reviews of the debts, including authorised review officer review” plus a list of other types of documents including “any further information that may indicate the application of averaging of Australian Taxation Office income data to the debt calculation process” and “details of income reported during the financial years of the alleged overpayment”. The Respondent denied the request, giving the reason: “all reasonable steps have been taken to locate the documents you have requested and I am satisfied that do not exist”.

18. Mr Jones was not satisfied with this response as he had previously been a benefits recipient[60] and he is certain that Centrelink does have documents relating to him. The Respondent’s answer is that Mr Jones requested documents relating to any debts owed by him and there are not any debts owed by him. Accordingly, there are not any documents that come within the terms of his request. It does not mean Centrelink does not have any records relating to Mr Jones or that Centrelink is refusing to disclose documents relating to him. I accept that explanation and I do not think the FOI request and response have any bearing on the issues at hand.

    [60] Exhibit T4, Further Supplementary T-Documents, ST16.Sole Parent’s Pension until 1996 and Family Tax Benefit until 2006

19. It was conceded by the Respondent that some hard copy records relating to Mr Jones are missing. However, nor is this relevant as any documents relating to Mrs Jones’ DSP should have been kept on her file, not Mr Jones’ file. Indeed, when Mr Jones contacted Centrelink regarding Mrs Jones’ debt that was recorded on her file.[61]

    [61] Exhibit T4, Further Supplementary T-Documents, ST12 and ST13.

    CAN OR SHOULD THE DEBT BE WAIVED

20. Section 1237A(1) of the Act provides that 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. It contains a note that points out that this provision 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 including error by the debtor. If the debt is waived, it never has to be repaid.

21. The plain English meaning of “solely attributable” is obvious. It means the only cause. If judicial authority is needed, it exists in the Full Federal Court’s decision in Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190. There, the court said, in relation to 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 …”

22. I am satisfied that in its calculation of Mrs Jones’ rate of DSP, Centrelink relied on information provided by Mrs Jones, or Mr Jones on her behalf, about their income. Mrs Jones was sent multiple notices between 4 March 2010 and 16 March 2016 (inclusive) that showed the amount recorded as Mr Jones’ fortnightly income and asked her to notify Centrelink of any change to that information. Mrs Jones was under a legal obligation to provide accurate information to Centrelink about her and Mr Jones’ income, including providing updated information when the income amount changed. There is no evidence in the Centrelink records that she fulfilled that obligation. Mr Jones claimed to have responded to each notice and to have provided quarterly payslips, annual tax assessments and he says he and Mrs Jones called and went to Centrelink offices. While it is plausible that Centrelink could have failed to record and act upon a few notifications, it is improbable that it would have ignored more than that, and it is beyond the realms of belief that all of those claimed notifications were ignored while notifications about other matters relating to Mrs Jones’ DSP were recorded and acted on. Given the reasons I have identified for doubting the recollections of Mr and Mrs Jones, I am unable to find that any portion of the debt was wholly caused by Centrelink’s error. Accordingly, there is no obligation to waive any portion of the debt due to sole administrative error by the Commonwealth.

23. I note that this debt was not a “Robo-debt”. Mr Jones earned a consistent fortnightly salary and the debt was calculated on what he actually earned in each instalment period.

24. I further note that Mr Jones’ apparent expectation that Centrelink would undertake data matching with the ATO every year seems to be based on a misunderstanding of the purpose of data matching, which is to check customers’ income rather than to relieve customers of their reporting obligations. I find no error in Centrelink’s failure to detect earlier that the information provided by Mrs Jones about Mr Jones’ income was not accurate and up to date.  

25. Section 1237AAD of the Act provides that all or part of a debt may be waived if the Secretary is satisfied that:

    · the debt did not result (partly or wholly) from the debtor or another person knowingly making a false statement or a false representation or failing or omitting to comply with a provision of the Act, the Administration Act or the 1947 Act; 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.

26. I am satisfied that the debt did not result from the conduct described.

27. The term “special circumstances” is not defined in the Act, so I have regard to judicial authority and previous consideration of the term by the Tribunal.

28. In Beadle and Director-General of Social Security (1984) 6 ALD 1, the Tribunal stated:

    “An expression such as "special circumstances" is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.”

29. In Groth v Secretary, Department of Social Security (1995) FCA 1708, the Federal Court stated:

    “The phrase "special circumstances", it has been said, although imprecise is sufficiently understood not to require judicial gloss...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...”

30. In Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114, the Tribunal stated:

    …“special circumstances” are not merely directed to the person’s own circumstances. Rather, they are directed to those that are “special circumstances…that make it desirable to waive”. That necessarily requires a consideration of the person’s individual circumstances but also a consideration of the general administration of the social security system. Waiver of the debt would mean that Mr Davy would have had the benefit of part of his DSP in circumstances in which he was not entitled to it…He has had the benefit of the money and there is no injustice in requiring him to repay the money of which he has had the benefit but not the entitlement…The system of administration of the Social Security Act does not visit any injustice for many if not all social security recipients but it did not lead to any injustice or unfairness on Mr Davy that is not visited, or potentially visited, upon all other recipients of social security payments under the Act. Therefore, I am not satisfied that there are special circumstances that make it desirable to waive the debt under s 1237AAD of the Act…”

31. The Applicant drew my attention to the Tribunal’s decision Salangsang and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 55 (“Salangsang”). In that case, there were three debts incurred between 1999 and 2004 which were raised in 2007 after a review. During the review process, and after Mrs Salangsang made an FOI request, it emerged that the Applicants (husband and wife) had provided more income updates than Centrelink previously thought.

32. Despite finding that the customers did not willingly mislead Centrelink with respect to any of the debts, the Tribunal did not waive all the debts. Rather, it waived part of one debt (the part attributable to Centrelink’s error) and the whole of another. With respect to that debt, the Tribunal accepted the customers’ evidence that they had provided anything that Centrelink requested. The Tribunal also considered that it was not possible to establish with any certainty the amount of the debt, and the delay in raising it had put the customers at a disadvantage in challenging it, e.g. they could not access records such as payslips and forms completed by them had long since been destroyed. This debt was waived for those reasons along with the customers’ financial circumstances and their significant other responsibilities as carers.

1. There are some distinguishing features between Salangsang and the present case. Here there was not a delay between the end of the debt period and the raising of the debt, the debt has been calculated according to detailed payroll records, Mrs Jones was able to access Mr Jones’ pay records and the like, and I am not persuaded that the Joneses accurately reported Mr Jones’ income to Centrelink.  

2. Mr Jones remains employed on a full-time basis, earning net income of around $2,900 per fortnight. Mrs Jones is not working or in receipt of income support. Her Carer payment was stopped when her son chose to live independently. Their household income is considerably more than couples who are solely reliant on Centrelink benefits.

3. Mrs Jones has a modest amount of equity in two properties which are subject to three mortgages (one is small, around $24,000). If one property is sold, the equity must be applied to the other mortgage. Her son lives in one property and the Mr and Mrs Jones live in the other. They pay the mortgage, rates and water etc for both properties, while Mrs Jones’ son contributes $360 per fortnight. The combined mortgage payments are around $3,000 per month. Mrs Jones owns a car outright. In the hearing, Mr Jones estimated that they spend $800 per fortnight on groceries, which seems a lot, and that expenses like electricity and home insurance have gone up. Mr Jones said sometimes they need to give money to his step-son who is not good at managing money. Further, his own adult son occasionally asks to borrow money, e.g. $100, and sometimes he repays the money but other times he does not.

4. The debt is against Mrs Jones, and not any third party such as Mr Jones. However, Mr Jones financially supports Mrs Jones as they are a married couple. No doubt, he too benefitted from the contribution Mrs Jones’ DSP made to their finances when she was receiving it. Centrelink was previously withholding $30 per fortnight from Mrs Jones’ benefits to repay the debt. Mrs Jones indicated that she could probably pay that amount out of her grocery money. Mrs Jones had the benefit of some $40,000 that was paid from public funds to her in error, and I am not persuaded that requiring her pay it back at a reasonable rate would cause financial hardship.

5. The fact that Mrs Jones has a debilitating condition (bi-polar disorder) is unfortunately not unusual in the context of DSP recipients. People who qualify for DSP do so on the basis of significant health conditions as it is a prerequisite to receive the payment. There are some other difficulties in Mrs Jones’ life. Her son was described as having complex needs as he has autism and suffers from a serious bowel disorder. He is on an NDIS plan but Mrs Jones still provides a fair bit of assistance to him. Mr Jones, as an Indigenous man has cultural imposts on him from wider family members: he cannot say no if family asks for money. He has Type 2 diabetes. The Joneses have a granddaughter that they raise half the time, although no details were given about her.

6. While I acknowledge that Mrs Jones has difficulty in her life, I am not persuaded that her circumstances are so exceptional or dire that recovery of the overpayment would be unjust or unreasonable. I am not satisfied that, for any other reason, there are special circumstance that make it desirable to waive the debt.

7. Mrs Jones has repaid $2,967.74 of the debt and $37,112.10 remains outstanding. There are currently no active debt recovery arrangements in place. Subsection 1236(1A) of the Act provides that a debt may be written off permanently or for a stated period if it is irrecoverable at law; the debtor has no capacity to repay the debt; or it is not cost effective for the Commonwealth to take action to recover the debt. I am satisfied that the debt is recoverable at law and that Mrs Jones has capacity to pay it. She has equity in real estate, although I do not suggest that she should be required to sell her and her son’s homes. Centrelink was taking $15 per week and she indicated she could continue to pay that amount. There is no evidence before me to suggest that it is not cost effective for the Commonwealth to take action to recover the debt in that way.

   CALCULATION OF THE DEBT

8. Mr Jones submitted that the Tribunal cannot be confident that the amount the Respondent claims was overpaid is correct seeing as the amount of overpayment alleged by the Respondent has been recalculated several times.

9. On 1 September 2016, Centrelink raised a debt in the amount of $39,438.49.[62] On 8 June 2017, the decision was varied by an Authorised Review Officer to $41,056.46[63] by calculating Mr Jones’ income on a fortnightly as opposed to annual basis.[64] The debt was affirmed by the SSCSD in December 2017. In December 2021, Mrs Jones sought review of that decision. On 7 February 2022, Centrelink issued both employers with notices requiring more detail regarding Mr and Mrs Jones’ respective income.

   [62] Covering the period 1 July 2009 to 19 May 2016.

   [63] For the period 11 December 2009 to 19 May 2016.

   [64] Exhibit T1, T-DocumentsT10, page 315.

10. On 24 February 2022, Mrs Jones’ former employer provided verified income for each pay period with corresponding timesheets.[65] On 22 April 2022, Mrs Jones’ employer provided more detailed information about hours worked by Mr Jones and the regular nature of his employment.[66] 

    [65] Exhibit T2, Supplementary T-Documents, ST5, ST6.

    [66] Exhibit T3, Further Supplementary T-Documents, ST8.

11. On 1 June 2022, Centrelink recalculated the overpayment to $36,504.72 based on Mrs Jones’ verified daily earnings. It appears that Centrelink erroneously failed to take the information from Mr Jones’ employer into account. That information was taken into account when Centrelink again recalculated the overpayment in November 2022. This increased the debt to $40,079.84.

12. The current debt takes into account Mrs Jones’ daily income in each DSP instalment period. These records[67] show that she consistently worked for five hours per day for five days per week in the periods in which she was employed. Timesheets confirm the specific days she worked and the number of hours. The debt also takes into account Mr Jones’ daily income. His payslips show he was employed on a full-time bass, and he was consistently paid for full-time hours  from Monday to Friday between the hours of 9.00am and 5.00pm[68] (although Mr Jones gave evidence that he had some flexibility in his work where if he worked extra hours one day he could take the equivalent time off another day). The payslips also distinguish hours and days of paid work from paid leave. Based on the employer’s evidence, Centrelink divided Mr Jones’ fortnightly income by ten to calculate his daily income, then applied his daily income to each instalment period. 

    [67] Exhibit T2, Supplementary T-Documents, ST6Exhibit T3, Further Supplementary T-Documents, ST7.

    [68] Exhibit T3, Further Supplementary T-Documents, ST8, page 71.

13. In the absence of any evidence to corroborate Mr Jones’ claim that his payslips are unreliable, I am satisfied that they are reliable. The accuracy of the information provided by Mrs Jones’ former employer was not challenged. The way daily income is used to calculate Mrs Jones’ entitlement to DSP is determined by the legislation and it appears to be automated using a computer program. The reliability of that process has not been challenged and I have no reasons to question it.

14. In accordance with subsection 43(1) of the Administrative Appeals Tribunal Act 1975 the decision of the Social Services and Child Support Division of the Administrative Appeals Tribunal as varied by the Respondent pursuant to section 182 of the Social Security Administration Act 1999 on 18 November 2022 to raise and recover a debt of $40,079.84 against the Applicant for the period of 13 November 2009 to 19 May 2016 is affirmed.

I certify that the preceding 81 (eighty-one) paragraphs are a true copy of the reasons for the decision herein of Senior Member R Bellamy

.........................[SGD].............................

Associate

Dated: 17 August 2023

Date of hearing:	16 December 2022 and 24 March 2023
Date last submission received:	1 August 2023

Applicant

Solicitor for the Respondent:

In person

Mr T Hillyard
Sparke Helmore

ATTACHMENT A

EXHIBIT	DESCRIPTION OF EVIDENCE	PARTY	DATE OF DOCUMENT	DATE RECEIVED
T-Documents
T1	Section 37 T-Documents (T1-T15, paged 1-797)	R	Various	17 Jan 2022
T2	Supplementary Section 37 T-Documents (ST1-ST6, paged 1-69)	R	Various	2 Aug 2022
T3	Further Supplementary T-Documents (ST7-ST11, paged 70-150)	R	Various	25 Nov 2022
T4	Further supplementary T-documents (14.03.2023) ST12 to ST17.pdf (ST12-ST16 Pages 151 - 158) (ST17: Per T-Document Pagination 436 – 521)	R	Various	22 March 2023
Applicant Material
A1	Applicant’s Submission dated 21 February 2022 (3 pages)	A	21 Feb 2022	21 Feb 2022
A2	Statement of Financial Circumstances dated 13 July 2022(Paged 1-5)	A	13 July 2022	13 July 2022
A3	Freedom of Information (FOI) request to Services Australia dated 1 July 2022 (6 pages)	A	1 July 2022	15 July 2022
A4	Applicant’s Submissions lodged 8 August 2022	A	-	8 Aug 2022
A5	FOI Acknowledgement Letter dated 18 July 2022 (2 pages)	A	18 July 2022	8 Aug 2022
A6	Affidavit of Chris Jones affirmed 16 September 2022 (2 pages)	A	16 Sep 2022	20 Sep 2022
A7	Affidavit of Beverly Jones affirmed 16 September 2022 (2 pages)	A	16 Sep 2022	20 Sep 2022
A8	Applicant’s Submission dated 14 October 2022 ( 3 pages)	A	14 Oct 2022	14 Oct 2022
A9	FOI Request Decision dated 29 November 2022 (12 pages)	A	29 Nov 2022	13 Dec 2022
A10	Applicant submission re robo debt 21-02-2022	A	21 February 2022	22 March 2023
A11	Applicant submission re robo debt revised 03.03.23	A	21 February 2022	22 March 2023
Respondent Material
R1	Letter from Respondent to Applicant re new debt amount dated 1 June 2022 (1 page)	R	1 June 2022	25 Aug 2022
R2	MultiCal – Centrelink Debt Calculator for period 13 November 2009 to 19 May 2-16 prepared 17 May 2022 (38 pages)	R	17 May 2022	25 Aug 2022
R3	Email from Services Australia Litigation Team to Applicant dated 2 August 2022 (5 pages)	R	2 Aug 2022	25 Aug 2022
R4	Letter from Respondent to Applicant re new debt amount dated 18 November 2022 (1 page)	R	18 Nov 2022	21 Nov 2022
R5	MultiCal – Centrelink Debt Calculator for period 13 November 2009 to 19 May 2-16prepared 10 November 2022 (37 pages)	R	10 Nov 2022	21 Nov 2022
R6	Respondent’s Statement of Facts, Issues and Contentions (Paged 1-24)	R	Nov 2022	25 Nov 2022
R7	Beverley Jones - Statement of Brooke Harvey.pdf	A	14 March 2023	22 March 2023
R8	Secretary’s Closing Submissions.pdf	R	14 March 2023	14 March 2023