Jones and Secretary, Department of Social Services (Social services second review) - [2019] AATA 2343

Jones and Secretary, Department of Social Services (Social services second review) [2019] AATA 2343 (2 August 2019)
Division:GENERAL DIVISION
File Number(s): 2018/1722
Re:Rochelle Jones
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Mrs J C Kelly, Senior Member
Date:2 August 2019
Place:Sydney

The Tribunal:
·affirms that part of the reviewable decision which affirmed a decision of an authorised review officer of the Department of Human Services to raise and recover a youth allowance debt totalling $7,191.47 for the period 10 September 2010 to 16 November 2011.
·sets aside that part of the reviewable decision which affirmed a decision of an authorised review officer of the Department of Human Services to raise and recover a newstart allowance debt totalling $4,647.26 for the period 5 December 2010 to 18 April 2012 and remits that part of the decision for recalculation with the recommendation that, if the law allows, the lower figure of either the recalculated debt or $4,647.26 should be determined to be the newstart allowance debt.

..............................[SGD]..........................................
Mrs J C Kelly, Senior Member
Catchwords
SOCIAL SECURITY – whether Applicant was overpaid a debt – whether amount of debt overpaid is due to the Commonwealth – whether all or part of each or any of the debts can be waived or written off - Applicant was overpaid debt - overpayment not due to Commonwealth administrative error - debt recoverable at law - not found that Applicant has no capacity to pay - Applicant's whereabouts are not unknown - not found that it is not cost effective for the Commonwealth to take action to recover the debt - Applicant knowingly failed to comply with obligation to notify income - discrepancy in debt assessed post hearing - reviewable decision set aside in part and remitted for recalculation
Legislation
Administrative Appeals Tribunal Act 1975 (Cth) s 41(2)
A New Tax System (Family Assistance) (Administration) Act 1999 ss 84, 84A
Social Security Act 1991 (Cth) ss 1067G, 1068, 1223(1), 1236(1A)(a), 1236(1A)(b), 1236(1A)(c), 1236(1A)(d), 1236(1C)(a), 1236(1C)(b), 1236(1C)(c), 1237A(1), 1237 (AAD)
Social Security (Administration) Act 1999 (Cth) s 66A(2)
Cases
Angelakos and Secretary Department of Employment and Workplace Relations [2007] FCA 25
Beadle and Director-General of Social Security [1984] AATA 176; 6 ALD 1
Cox and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 350
Devriadis v Secretary, Department of Family and Communication Services (2000) 62 ALD 145
Director-General of Social Services v Hales (1983) 47 ALR 281
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60; 24 ALR 577
Drake and Minister for Immigration and Ethnic affairs (No 2) (1979) 2 ALD 634
Dranichnikov v Centrelink [2003] FCAFC 133
Groth and Secretary, Department of Social Security (1995) FCA 1708; 40 ALD 541
Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435
Re Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114; 94 ALD 693
Re Ivovic and Director General of Social Services [1981] AATA 57
Re Nisha and Secretary, Department of Family and Community Services [2000] AATA 315
Re Secretary, Department of Family and Community Services and Jonauskas [2001] AATA 72
Re Secretary, Department of Social Security and McAvoy [1996] 44 ALD 721
Re Woodward and Secretary, Department of Family and Community Services [2001] AATA 818
Ryde v Secretary, Department of Family and Community Services [2005] FCA 866
REASONS FOR DECISION
Mrs J C Kelly, Senior Member
2 August 2019
Decision under review

The Applicant, Ms Jones, seeks the review of a decision made by the Social Services and Child Support Division of this Tribunal (AAT1) on 6 March 2018 (the reviewable decision). The reviewable decision affirmed a decision of an authorised review officer of the Department of Human Services (the Department) to raise and recover a:
·youth allowance debt totalling $7,191.47 for the period 10 September 2010 to 16 November 2011, and
·newstart allowance debt totalling $4,647.26 for the period 5 December 2010 to 18 April 2012
The total debt owed by Ms Jones to the Department was $11,838.73.
Issues
The issues to be decided are whether:
·the Applicant’s debts were properly raised,
·the amounts overpaid are debts due to the Commonwealth,
·all or part of either or both of the debts can be waived or written off.
Facts
The following facts are not in dispute.
The Applicant made a positive decision not take part in these proceedings. She sent an email to the Tribunal on 1 February 2019, advising that she has given ‘full permission’ to her mother to ‘handle these matters’, she had ‘no input or awareness of any of this process so far’ and she will not be available for the hearing due to work. Her mother represented her and gave relevant evidence. This matter was heard together with proceedings relating to debts the Department had raised against her mother.
The Applicant had nominated her mother as her payment nominee to act/enquire on her behalf in her applications for youth allowance and newstart allowance.
The Applicant was in receipt of:
·youth allowance from 4 June 2010 until 4 December 2011, and
·newstart allowance from 5 December 2011 to 11 April 2012.
During the period 4 June 2010 to 11 April 2012 (the debt period), the Applicant was working for the Department of Education and Communities, Handicap Children’s Centre NSW Ltd, Sylvanvale Foundation, and St Lucy’s School Wahroonga.
On 2 November 2015 the Department raised:
·A youth allowance debt totalling $8,424.78 for the period 10 September 2010 to 16 November 2011, and
·A newstart allowance debt totalling $4,735.12 for the period 5 December 2011 to 18 April 2012.
The debts were raised because the Applicant had failed to declare her employment income.
The Applicant was notified of the debts on 22 June 2017, 19 months later.
On 3 August 2017 the Applicant appealed the debts and on 25 August 2017 lodged various bank statements in support of her request.
On 4 September 2017 an authorised review officer of the Department determined that the Applicant had a legally recoverable debt:
·youth allowance debt totalling $7,191.47 for the period 8 October 2010 to 25 November 2011,
·newstart allowance debt totalling $4,647.26 for the period 5 December 2011 to18 April 2012.
On 4 October 2017, the Applicant applied to the AAT1 and then to this Tribunal on 4 April 2018 in relation to the reviewable decision. Her mother represented her in both review processes. Ms Jones gave evidence to AAT1 but not in these proceedings.
On 5 July 2018, the Tribunal ordered a stay of the decision under review until 28 August 2018 pursuant to s 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth). A further stay was opposed by the Secretary and in an oral decision delivered on 27 September 2018 the Tribunal refused the application for a further stay.
On 27 August 2018, the Applicant’s mother provided material to the Tribunal on the Applicant’s behalf. A medical report of Ms Cheung, Registered Psychologist, dated 3 September 2018 was provided to the Tribunal on 10 September 2018. The report relates to the Applicant’s mother.
The regulatory scheme
The relevant legislation is contained in the:
·Social Security Act 1991 (Cth) (the Act),
·Social Security (Administration) Act 1999 (Cth) (the Administration Act).
Government policy set out in the Social Security Guide is also relevant, and should be applied in the absence of cogent reasons to not follow such policy.[1]
[1] Drake and Minister for Immigration and Ethnic affairs (No 2) (1979) 2 ALD 634 at 645.
A person’s rate of:
·youth allowance is determined in accordance with s 1067G of the Act,
·newstart allowance is determined in accordance with s 1068 of the Act.
The Applicant’s case as put by her mother
The Applicant does not dispute that the debt has been properly raised and that the overpaid amounts are debts due to the Commonwealth pursuant to s 1223(1) of the Act.
The argument put on her behalf by her mother was that there were special circumstances such that she should not have to repay the debt.
Her mother gave the following evidence. The Applicant turned 21 on 3 December 2009. Before then, her mother was receiving benefits for her. When the Applicant turned 21 she began receiving benefits in her own right. All payments went into her mother’s bank account. The Applicant was never given the money. They were desperate to keep a roof over their heads. Their relationship was co-dependant because of their circumstances. The Applicant was her mother’s protector and greatest support. She witnessed everything her mother went through. She was studying full-time at university and wanted to give up because of the financial difficulties but her mother made her keep going. In the Applicant’s mind, she was just helping her mother. She thinks her mother is responsible for the debt and should repay it if that is necessary. The debt came out of nowhere. It was for the debt period which ended on 18 April 2012, was not raised until 2 November 2015, and the Applicant was not notified of the debt until 22 June 2017. It is has caused more stress and trauma for the Applicant. At the time of the hearing, the Applicant was 30 years old, 26 weeks pregnant, and not living with the father of the child. She had pregnancy related health issues and was concerned because her brother had died two hours after his birth in 1996. She does not want to deal with this matter and wants to get on with her life. She last lived with her mother four years ago.
The Applicant’s mother related what had happened to her over the years from 2007 to 2018 to demonstrate that there were special circumstances such that neither she nor the Applicant should have to repay the debts they owed. Relevantly, those circumstances were:
·Her mother’s marriage to the Applicant’s father broke down and on 17 December 2007 her mother left her father after years of financial, emotional abuse and violence. She had tried to leave many times before.
·Her father did not pay the mortgage on the jointly owned home which had been in the mother’s family for many years. The bank repossessed the property. The divorce took effect on 29 November 2010.
·Her mother had no support from her family and was grieving for her son who died shortly after birth in 1996 because she had not been allowed to grieve while she was married. She faced financial ruin and had to support the Applicant.
·On 15 October 2008, her mother took out an Apprehended Violence Order against her mother’s brother who had assaulted her. The police pursued an assault charge through the courts. Her mother’s parents supported her brother. She was then in dispute with him and his wife who worked in the same industry as she did. They spread malicious gossip about her which adversely affected her ability to find employment and pay the rent. She moved jobs regularly and was working on and off. Her professional and personal life spiralled downwards.
·Her mother moved accommodation often because she could not maintain a job and pay rent. She was often evicted and taken to the Tenancy Tribunal for recovery of rent many times.
·Her mother suffered anxiety and depression and could not get out of bed on some days. Her capacity to work was reduced. She was treated by her general practitioner and then by a specialist.
·The only way her mother could report to Centrelink was if she was emotionally strong enough to go into an office. She could not contact Centrelink by telephone because it involved sitting on the telephone for hours. Because they moved so many times, they never received the notices Centrelink sent.
·Her mother first attended a clinic according to a mental health care plan on 16 July 2011. She attended 11 sessions during the debt period and a further five sessions in 2012.
·Her mother was relieved that there would be no more threats of violence when her former husband died unexpectedly in February 2014. However, she then found out that he had another child and she had to sort through the legal mess to establish that the Applicant was his only child.
·The Applicant was currently under financial pressure because she was living on her own.
Ms Cheung, Psychologist, provided a report dated 3 September 2018 which stated that on presentation in 2011, the mother presented with symptoms consistent with Adjustment Disorder with Mixed Anxiety and Depression (Chronic).
Consideration
In addition to considering the evidence of the Applicant’s mother about the Applicant’s circumstances, the Tribunal has taken into account what the Applicant said in the AAT1 hearing. It has also considered the possible statutory provisions that are raised by the evidence and not special circumstances alone.
Section 1236 of the Administration Act permits a debt to be written off “for a stated period or otherwise” if one the following is the case:
·the debt is irrecoverable at law;
·the Applicant has no capacity to pay;
·the Applicant’s whereabouts are unknown; or
·it is not cost effective for the Commonwealth to take action to recover the debt.
A copy of s 1236 of the Act is annexed to this decision.
Subsection 1236(1A)(a) permits write off if a debt is irrecoverable at law. A debt is only recoverable at law if, and only if:
·there is no proof of the debt capable of sustaining legal proceedings for its recovery; or
·the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or
·the debtor has died leaving no estate or insufficient funds in the debtor’s estate to repay the debt.
There is no suggestion on the evidence that the debt is irrecoverable at law.
Subsection 1236(1A)(b) permits write off if the debtor has no capacity to repay the debt. This section is qualified by s 1236(1C), which states that ‘a debtor has capacity to repay the debt’ if it is recoverable by means of:
·deductions from the debtor’s social security payment; or
·deductions under section 84 of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (the FAA); or
·setting off under section 84A of the FAA;
unless recovery by those means would result in the debtor being in severe financial hardship.
Sections 84 of the FAA allow for debts due by a person to the Commonwealth under the Act to be deducted from instalments of family tax benefit payments to which the person is entitled.
Section 84A of the FAA applies to persons who are entitled to an amount of family assistance and owes a debt to the Commonwealth under the Act to set off whole or part of the family assistance against the debt. The amount of entitlement and amount of debt are reduced accordingly.
Does the Applicant have no capacity to pay the debts? The Applicant was employed in a position earning $3,799.74 a fortnight on 16 August 2018. From post hearing communications with her mother, the Tribunal is aware that she has had a baby and accepts that involves expenditure not previously incurred by the Applicant. The Applicant told AAT1 that repaying these debts would put her in financial hardship because she has a Higher Education Scheme debt to repay on top of usual living expenses.
In relation to inability to pay, the Applicant’s mother said that the Applicant would leave working life when she had the baby. When the Tribunal commented that the Applicant would receive social security benefits, her mother suggested that the father of the child would give her a living allowance and she would not receive benefits.
While the Tribunal accepts that the Applicant would not work after the birth for a period, it does not accept that she has left the workforce based on her mother’s evidence alone. Her mother was very anxious to say what she could to support her and the Applicant’s case. Her response to the Tribunal’s comment about the Applicant accessing social security benefits is an example. It was speculative.
The Applicant has not provided any evidence of her current or future financial circumstances. In her email to the Tribunal on 1 February 2019 before the hearing, she stated that she was a ‘special needs teacher in class full time'. She was aware of the proceedings and chose not to participate. It was open to her to participate and provide evidence of her financial circumstances. A post hearing communication from the Applicant’s mother on 8 April 2019 stated that the Applicant had taken leave from work pending the birth of her child. That suggests that the Applicant was still employed and was on maternity leave. She may be receiving family tax benefit part A and/or B. The Tribunal is not satisfied that the Applicant has no capacity to pay the debts.[2]
[2] Devriadis v Secretary, Deprtment of Family and Communication Services (2000) 62 ALD 145 at 58.
The Applicant’s mother argued that their whereabouts were unknown for several years and therefore s 1236(1A)(c) applied. Whether they were or not does not assist the Applicant. As of the date of the hearing and since at least the notification of the debts in 2017, the Applicant’s whereabouts have been known. The debt cannot be written off on that basis.
The evidence does not support a finding under s 1236(1A)(d) that it would not be cost effective for the Commonwealth to take action to recover the debt.
Section 1236 does not assist the Applicant.
Subsection 1237A(1) of the Act states:
Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.
The evidence does not suggest that any part of the debt is attributable solely to an administrative error made by the Commonwealth. The debt was raised because the Applicant earned income which was not disclosed to the Department. Subsection 1237A(1) of the Act does not apply.
Sections 1237AA to 1237AAC do not apply to the Applicant.
Section 1237AAD of the Act states:
The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
a.the debt did not result wholly or partly from the debtor or another person knowingly:
(i) Making a false statement or a false representation; or
(ii) Failing or omitting to comply with a provision of this Act, the Administration Act or the 1947 Act; and
there are special circumstances (other than financial hardship alone) that make it desirable to waive…
In Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435, Deputy President Forgie at [48] held that:
There is nothing in section 1237AAD which suggests that the word "knowingly" should be given any meaning other than that a person has actual knowledge, rather than constructive knowledge, that he or she is making a false statement or representation or that he or she is failing or omitting to comply with a provision of the Act. That actual knowledge is to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time and to events surrounding the false statement or the act or omission.[3]
[3] See also Re Secretary, Department of Families and Community Services and Jonauskas (2001) 65 ALD 553.
In Cox and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 350, the Tribunal, citing [48] of Re Callaghan, held that:
Whilst it is clear from this passage that actual (as compared to) constructive knowledge is required, the Tribunal has recognised that the presence of actual knowledge may be inferred from the circumstances where a debtor had the opportunity to gain that knowledge, and there were no obstacles preventing him acquiring that knowledge…[4]
[4] See also Re Nisha and Secretary, Department of Family and Community Services [2000] AATA 315; Re Woodward and Secretary, Department of Family and Community Services [2001] AATA 818.

In Re Secretary, Department of Social Security and McAvoy [1996] 44 ALD 721, in finding that the debt did not result wholly or partly from Mr McAvoy knowingly making a false statement or representation, the Tribunal observed at [45]:
At all times he acted honestly, prudently and upon the advice of departmental officers. He exhibited no recklessness, suspicion or wilful blindness.
Subsection 66A(2) of the Administration Act states that where a person is being paid a social security payment and an event or change of circumstances occurs that might affect that 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.
It is not in dispute that the Applicant failed to notify Centrelink of her income during the debt period. Did she knowingly fail or omit to comply with the obligation to disclose her income? The evidence shows that she did. There were numerous letters to the Applicant from the Department addressed to addresses in Woolooware and Yowie Bay during the period 16 September 2010 to 4 April 2012. Each letter advised that information had to be provided within 14 days about events or changes in circumstances affecting the payment, including earnings, whether she started work and of any change of address.
Both the Woolooware and Yowie Bay addresses are in the list of addresses the Applicant’s mother provided for the period from 17 December 2007. Her list did not specify the dates of occupation. The Tribunal finds that the Department was advised of the change of address from Woolooware to Yowie Bay.
The Applicant gave the following evidence to AAT1. She remembered applying for income support but had no specific memory of signing or submitting Centrelink forms and could not remember whether the idea to apply was hers or her mother’s. It was to assist her mother to meet their living expenses. She had no understanding of the rules that governed entitlement to income support. She assumed her entitlement was because she was a student and would cease when she graduated from university. As she applied only a few months before graduating, she imagined that she would only receive benefits for a few months. She was unaware how much she was paid because the payments went into her mother’s bank account and was surprised how large the debt was. She never received any letters regarding her youth allowance or newstart allowance .
The Applicant’s recollection is understandably inaccurate given the length of time between the end of the debt period and 22 June 2017 when she was notified of the debt, and her lack of engagement with receiving the payment. Contemporaneous records show that she applied for youth allowance on 27 April 2008 and 24 November 2009 and for newstart allowance on 21 December 2011. The period of the newstart allowance debt is consistent with her recollection of a short time.
The contemporaneous records differentiate between when her nominee, her mother, and when the Applicant contacted Centrelink.
On 15 June 2011, the Applicant contacted the Department to confirm details of her study. On 14 July 2011, she also contacted the Department to advise of her international travel, from 13 July 2011 to 21 July 2011. She requested also to have mail delivered to her Australian address.
On 4 October 2011 the Applicant contacted Centrelink about changing her youth allowance payment in relation to a car payment.
On 22 November 2011 a notice of cancellation of youth allowance was sent to the Applicant at the Yowie Bay address. On 24 November 2011 she contacted Centrelink about youth allowance. On 12 December 2011 the Applicant contacted Centrelink about claiming a payment and a concession card. On 21 December 2011 she contacted Centrelink about claiming newstart allowance. The start date for payment was 16 December 2011.
The above evidence persuades the Tribunal not to accept the evidence of the Applicant’s mother that they moved and did not receive notices from Centrelink and not to accept the Applicant’s evidence that she did not receive notices from Centrelink and was not aware of their content.
The Applicant was 20 years old when she applied for the first social security payment the subject of the debt. She was undertaking tertiary studies in education. She contacted the Department from time to time as set out above. She responded to the notice of cancellation of youth allowance and successfully applied for newstart allowance. That evidence shows that she knew she was receiving youth allowance and applied for another benefit, newstart allowance, when the first benefit was cancelled.
The Applicant failed to comply with her obligation to notify department of her income which was an event or change of circumstances that might affect the social security payment pursuant to s 66A(2) of the Administration Act. She does not satisfy s 1237AAD of the Act. That finding is sufficient to decide this case, however, given the emphasis placed on the circumstances faced by the Applicant, it is appropriate to briefly address whether they are special circumstances within s 1237AAD.
The evidence before the Tribunal is almost entirely about the difficulty the Applicant’s mother experienced and her inability to cope and her assertions about their impact on the Applicant. The Applicant told the member during the AAT1 proceedings that she and her mother were in severe financial hardship at the time she received the payments.
The Applicant applied for and received the benefit of social security payments and ignored the obligations that entailed. The consequences are of her own making. The Tribunal has taken into account that the debt was not raised until 2015 and was notified to the Applicant until 2017. The reasons for those delays are not apparent. The delays are unfortunate but they do not change the fact that the Applicant has a debt to the Commonwealth.
There is no evidence that the Applicant was prevented from reporting income received because of any medical or psychiatric condition or for any other reason. She had the capacity to attend to her tertiary studies and engage with the department when applying for two benefits, the second after she was notified of cancellation of the first. She was working before the birth of her baby and is not living with the father of the child. The Tribunal has no further information about her present personal circumstances.
The Applicant has been aware of the debt since 22 June 2017. She has disputed the debt.
It is for the Tribunal consider the particular circumstances in a case. It has taken into account the authorities referred to by the Respondent.[5] It does not consider that the Applicant’s circumstances are special circumstances within s 1237AAD of the Act.
[5] Dranichnikov v Centrelink [2003] FCAFC 133; Re Beadle and Director-General of Social Security (1984) 6 ALD 1; Angelakos and Secretary Department of Employment and Workplace Relations [2007] FCA 25; Ryde v Secretary, Department of Family and Community Services [2005] FCA 866; Groth and Secretary, Department of Social Security (1995) FCA 1708, 40 ALD 541; Beadle and Director-General of Social Security [1984] AATA 176; 6 ALD 1;Re Ivovic and Director General of Social Services [1981] AATA 57; Re Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114; Director-General of Social Services v Hales (1983) 47 ALR 281; Re Secretary, Department of Family and Community Services and Jonauskas [2001] AATA 72.
After the hearing, the Department sent a document to the Tribunal and to the Applicant setting out in detail the assessment of the Applicant’s debts. The youth allowance debt totalling $7,191.47 for the period 10 September 2010 to 16 November 2011 was the same as that set out at the beginning of this decision. However, the newstart allowance debt was assessed as $4,735.12 which is higher than the previous assessment of $4,647.26. Neither the Applicant nor the Respondent referred to this discrepancy. The cause of the discrepancy is not apparent to the Tribunal.
The Tribunal has to make the correct or preferable decision.[6] The Applicant has a debt to the Commonwealth, however as the Tribunal now has two different assessments of the newstart allowance debt, it is appropriate to set aside that part of the reviewable decision in respect of the newstart allowance debt and remit that matter for recalculation of the debt with the recommendation that if the law allows, the lower figure of $4,647.26 should be determined to be the newstart allowance debt.
[6] Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60; 24 ALR 577
The decision
The Tribunal:
·affirms that part of the reviewable decision which affirmed a decision of an authorised review officer of the Department of Human Services to raise and recover a youth allowance debt totalling $7,191.47 for the period 10 September 2010 to 16 November 2011.
·sets aside that part of the reviewable decision which affirmed a decision of an authorised review officer of the Department of Human Services to raise and recover a newstart allowance debt totalling $4,647.26 for the period 5 December 2010 to 18 April 2012 and remits that part of the decision for recalculation with the recommendation that, if the law allows, the lower figure of either the recalculated debt or $4,647.26 should be determined to be the newstart allowance debt.

I certify that the preceding 65 (sixty-five) paragraphs are a true copy of the reasons for the decision herein of Mrs J C Kelly, Senior Member

..............................[SGD]..........................................
Associate
Dated: 2 August 2019

Date(s) of hearing: 7 February 2019

Date final submissions received: 14 February 2019

Advocate for the Applicant: Ms D Chevell

Solicitors for the Respondent: Ms A Zinn, Department of Human Services
ANNEXURE
1236 Secretary may write off debt

(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.
(2) A decision made under subsection (1) takes effect:
(a)if no day is specified in the decision—on the day on which the decision is made; or

(b) if a day is specified in the decision—on the day so specified (whether that day is before, after or on the day on which the decision is made).

(3) Nothing in this section prevents anything being done at any time to recover a debt that has been written off under this section.

Date(s) of hearing:	7 February 2019
Date final submissions received:	14 February 2019
Advocate for the Applicant:	Ms D Chevell
Solicitors for the Respondent:	Ms A Zinn, Department of Human Services