Large and Secretary, Department of Social Services (Social services second review)
[2024] AATA 3181
•6 September 2024
Large and Secretary, Department of Social Services (Social services second review) [2024] AATA 3181 (6 September 2024)
Division:GENERAL DIVISION
File Number(s): 2023/5773, 2023/5799, 2023/5800, 2023/7600
Re:Kimberley Large
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
DECISION
Tribunal:Senior Member D. J. Morris
Date:6 September 2024
Place:Hobart
The decisions of the Social Services and Child Support Division of the Tribunal made on 15 February 2023 and 5 October 2023 are each set aside.
In substitution, the Tribunal decides:
That at the date of this decision –
(a)the Applicant has a family tax benefit debt for the financial year 2017-2018. The debt for the period 1 December 2017 to 25 February 2018 is wholly waived for sole administrative error. Forty per cent of the outstanding debt is waived on the basis of special circumstances.
(b)the Applicant has a family tax benefit debt for the financial year 2018-2019. The debt for the period 1 August 2018 to 4 September 2018 is wholly waived for sole administrative error. Forty per cent of the outstanding debt is waived on the basis of special circumstances.
(c)the Applicant has family tax benefit debts for the financial years 2019-2020 and 2020-2021. Forty per cent of these debts is waived on the basis of special circumstances.
In addition –
(a)a determination is made under s 78E of the A New Tax System (Family Assistance)(Administration) Act 1999 that interest charges are not payable.
(b)the Respondent is directed to recalculate the debts in accordance with this decision and advise the Applicant that she may enter into a repayment plan.
..................................[signed]......................................
Senior Member D. J. Morris
Catchwords
SOCIAL SECURITY – pensions, benefits and allowances – family tax benefit – debts – was the applicant overpaid family tax benefit – do the overpayments constitute debts to the Commonwealth – should all or part of the debts be written-off or waived – errors by the agency – authorised review officer affirmed a debt decision – tribunal at first review waived a percentage of debt for special circumstances – authorised review officer affirmed separate debt decision – tribunal at first review affirmed separate debt decision – applicant sought review of both first review decisions by tribunal at second review – matters heard together – respondent concedes administrative error – respondent concedes poor administration amounts to special circumstances – extent to which applicant contributed to debts – decisions under review each set aside and a new decision is substituted with a direction
Legislation
Administrative Appeals Tribunal Act 1975
A New Tax System (Family Assistance) (Administration) Act 1999
Cases
Haggerty vDepartment of Education, Training and Youth Affairs [2000] FCA 1287
Jazazievska v Secretary, Department of Family &Community Services [2000] FCA 1484
REASONS FOR DECISION
Senior Member D. J. Morris
6 September 2024
The Applicant, Mrs Kimberley Large, has brought two decisions to the General Division of the Tribunal for second review of decisions made by the Social Services and Child Support Division (‘first review’). The first of these was a first review decision on 15 February 2023. That decision set aside decisions of Services Australia, part of the Respondent’s Department (‘the Agency’) that Mrs Large had several family tax benefit debts for the period 1 July 2017 to 30 June 2020 and substituted a decision that 20 per cent of the current balances of the debts were waived due to special circumstances.
The second decision about which the Applicant is aggrieved is the second review decision of 5 October 2023 to affirm a decision of the Agency that Mrs Large had a recoverable family tax benefit debt of $9,757.15 for the period 1 July 2020 to 30 June 2021.
It was convenient for these two decisions to be heard together, without objection from the parties.
HEARING
A hearing was held on 3 July 2024 by video link, as is permitted under s 33A of the Administrative Appeals Tribunal Act 1975 (‘AAT Act’). Mrs Large represented herself but was assisted by her lay advocate, Mr Graeme Jeffs, her father, who made submissions by leave of the Tribunal. The Respondent was represented by Mrs Aarabi Raveendiran, a solicitor from Services Australia. The Applicant called her husband, Mr Darren Large, and her mother, Ms Cindy Cobbin, who both gave oral evidence.
The Tribunal admitted into evidence the following documents:
(a) Volume of documents (TD) lodged under s 37 of the AAT Act (Exhibit R1);
(b) Volume of supplementary documents (ST)(Exhibit R2);
(c) Volume of further supplementary documents (FS)(Exhibit R3);
(d)Applicant’s Submission (Exhibit A1); and
(e)Applicant’s Response to Respondent’s Statement of Facts, Issues and Contentions (Exhibit A2).
The Tribunal also had regard to a Statement of Facts, Issues and Contentions lodged by the Respondent on 10 May 2024. At the conclusion of the hearing, the Tribunal asked the Respondent for information on the outstanding debt amounts still owed by the Applicant. This was provided on 4 July 2024, after which the matter was reserved.
On 22 August 2024, the Respondent contacted the Tribunal and requested an urgent directions hearing to discuss information provided earlier by the Department. A telephone directions hearing was held on 30 August 2024.
BACKGROUND
From December 2005, the Applicant was receiving family tax benefit Parts A and B as a single person for her two sons. From August 2016 the Applicant was in receipt of newstart allowance. The Agency periodically issued notices to the Applicant under s 25 of the A New Tax System (Family Assistance)(Administration) Act 1999 (‘the Act’) reminding Mrs Large of the requirement for her to advise the Agency of any changes in her circumstances, including any changes to her marital status or income.
On 1 December 2017, the Applicant provided the Agency with a marriage certificate as proof of her marriage to Mr Darren Large, as well as his PAYG summary for 2016-17 showing gross payments of $54,500 (TD, p 74). On the same day, the Agency issued a notice to Mrs Large requiring her to provide her husband’s payslips, bank account details and a MOD P (Partner details) form (‘MOD P form’)(TD, p 75).
On 15 December 2017, the Applicant provided Mr Large’s fortnightly payslips from his employer, bank statements and a completed MOD P form. The form did not include Mr Large’s annual income or an estimate of his family income but did name his employer and stated that he was earning $1,650 per fortnight.
The Respondent told the Tribunal that, due to an administrative error, the Agency did not take account of Mrs Large’s marriage or partner income, and continued to pay her family tax benefit as a single person.
From February to August 2018 the Agency issued several notices to the Applicant under s 25 of the Act indicating her fortnightly income and requiring her to correct any incorrect information in the notices as soon as possible. The notices told Mrs Large that an income estimate for family tax benefit was not required because she was in receipt of a social security payment, but she was required to report if she was receiving Part B and the primary earner’s income was over $100,000 a year.
On 8 August 2018, the Applicant contacted the Agency and advised (again) that she had been married since 12 August 2017 and that both she and her husband were working full-time. She requested that her newstart allowance be cancelled because she was not entitled to receive it (TD, p 226). Mrs Large in her submissions to the Tribunal stated that she also requested that her family tax benefit be cancelled.
On 20 August 2018, Mrs Large contacted the Agency again and advised she wanted the newstart allowance to cease, and that she had twice provided the MOD P form.
On 4 September 2018, the Agency cancelled the Applicant’s newstart allowance, but family tax benefit was continued to be paid to her as a single person (TD, p 581). The same day, the Agency issued a notice to Mrs Large requiring her to provide a new family tax benefit estimate of her adjusted taxable income, now that she was no longer receiving newstart allowance.
On 10 September 2018, the Applicant provided (another) MOD P form, marriage certificate (for the third time), PAYG summary for 2016-2017 (for the second time), payslips from Mr Large’s employer and a PAYG summary for the last fortnight of the financial year 2017-2018 showing Mr Large’s gross income, but the Respondent submitted there was no evidence this included any estimates of the Applicant’s combined adjusted taxable income.
The Agency issued further notices to the Applicant from September to November 2018. On 1 March 2019, Mrs Large contacted the Agency. The Respondent provided a printout record from the Agency of the conversation the Applicant had with an Agency officer. It relevantly said:
CUS has contacted regarding an ongoing issue to link CUS to her PTR. CUS has been advised that there was an error when she contacted last. This is an ongoing issue since their marriage on 12.08.2017. CUS has also experienced [an] issue to update her legal name on our system. There has been an update to CUS’s known names. First ICT escalation occur[ed] in 2018 on the NSA system. As the CUS was not receiving NSA this was incorrect. A new request has been submitted to the correct team. If CUS contacts, please advise that the escalation has occurred. CUS may be upset as this has taken quite some time to finalise. Also please advise CUS to reassess family payment choices to be base rate or zero to avoid any further debt as once this has been resolved CUS will receive a debt from incorrect income estimates for previous financial years.
From March 2019 to June 2020 the Agency issued further notices under s 25 of the Act to the Applicant. On 29 June 2020, Mrs Large contacted the Agency, and the Respondent provided a printout record of that conversation. It relevantly said:
Customer contacted [Agency] on 29 June 2020 regarding General Inquiry for Family Tax Benefit. Information was obtained via Phone Call. Document created…on 29 Jun 2020. CUS advised of a very long wait for partner and new married name to be added to record. CUS became de facto with partner Jan 3rd 2017 and married Aug 2017. MOD P uploaded with details. Due very long wait for processing an Urgent ACTDOC created for FCC processing.
From July 2020 to June 2021, the Agency issued further s 25 notices to the Applicant indicating that her family tax benefit was being calculated on an annual income estimate of $51,000 to $52,000 and to advise if she was in receipt of family tax benefit Part B and her primary earner’s income was over $100,000 (TD, p 758-856). Mrs Large told the Tribunal that she contacted the Agency and provided her husband’s income on “multiple occasions.”
On 18 June 2021, Mrs Large lodged a claim for family tax benefit (TD, p 153). She noted (yet again) that she was married to Mr Large and provided his taxable income for 2020-21 and an income estimate for 2021-22 as $150,000.
On 29 June 2021, the Agency made a decision to raise and recover family tax benefit debts on the basis that Mrs Large had been paid the incorrect rate of family tax benefit because Mr Large’s income was not taken into account. The debts raised were $14,594.35 for the 2018-19 financial year and $14,265.48 for the 2019-20 financial year. The following day, the Agency decided to raise and recover a further family tax benefit debt for the 2017-18 financial year in the amount of $8,001.40, on the same grounds.
The Applicant sought review of these debt decisions by an authorised review officer (ARO), and they were affirmed on 29 October 2021. This is the October 2021 ARO decision.
Mrs Large sought review of the October 2021 ARO decision by the Tribunal.
On 18 January 2022, the Agency made a further decision to raise and recover a family tax benefit debt of $9,757.15 for the 2020-21 financial year on the basis that Mr Large’s actual adjusted taxable income had not been taken into account.
Mrs Large sought review by an ARO of that decision, and it was also affirmed on 2 November 2022. This is the November 2022 ARO decision.
The Applicant took these two ARO decisions to the Tribunal. On 15 February 2023, as discussed above, the Tribunal at first review set aside the first ARO decision and decided that 20 per cent of the outstanding debts should be waived on the basis of special circumstances. This is the February 2023 first review decision.
Mrs Large also asked the Tribunal to review the November 2022 ARO decision. Subsequently, the Tribunal at a separate first review, affirmed it on 5 October 2023.
The Respondent advised the Tribunal that on 29 January 2024, the Agency implemented the February 2023 first review decision and waived the following amounts (ST, p 199):
(a)$1,600.28 was waived from the debt amount of $8,001.40 for financial year 2017-2018, leaving the outstanding amount as $6,401.12;
(b)$2,847.52 was waived from the debt amount of $14,237.62 for financial year 2018-2019, leaving the outstanding amount as $11,390.10;
(c)$2,853.09 was waived from the debt amount of $14,265.48 for financial year 2019-2020, leaving the outstanding amount as $11.412.39.
Mrs Large has made repayments of $60 through withholding of her family tax benefit and $580 has been garnisheed by the Agency from the Australian Taxation Office.
Submissions of the Respondent
The Respondent conceded that the debt for the period from 1 December 2017 to 25 February 2018 and from 8 August 2018 to 4 September 2018 arose due to sole administrative error on the part of the Agency and may be waived, subject to any findings the Tribunal may make about good faith.
The Respondent submitted that the debts for the remaining period did not arise due to sole administrative error as Mrs Large contributed to the overpayment by not providing Mr Large’s estimated adjusted taxable income until 18 June 2021 and by not engaging with the notices sent to her by the Agency.
In addition, the Respondent submitted that the debts for the 2019-20 financial year cannot be waived for sole administrative error as there is no evidence of financial hardship.
The Respondent submitted that it would be appropriate for 20 per cent of each of the debts to be waived for special circumstances owing to ‘the Agency’s poor administration’, but that no further waiver was appropriate as there is no evidence of any other factors that are unusual, uncommon or out of the ordinary which would make Mrs Large’s circumstances ‘special’.
The Respondent further submitted that it would be open to the Tribunal to find that Mrs Large had a reasonable excuse not to enter into a repayment arrangement with the Agency because she was seeking review of the debts. As such, the Respondent submitted that the Applicant has an exemption from interest charges under s 78E of the Act.
Submissions from the Applicant
Mrs Large disagreed with the contention of the Respondent that she did not provide any estimate of income for her husband until June 2021, and said she did so in 2018. In response to the Respondent’s contention regarding the number of s 25 notices issued to her, the Applicant said she had been unable to update her details on-line because of what she was told was a ‘known glitch’ in the system.
In response to the Respondent’s submissions that there was no evidence that the Applicant’s health issues are more severe than, for example, a disability support pension in a similar situation who had incurred a debt, which has been the yardstick the Tribunal had often applied before finding that ill health or poor health is a factor in deciding that special circumstances apply, Mrs Large said there has been an effect on her mental health. She wrote (Exhibit A1):
The whole ridiculous process has caused me and my family an incredible amount of undue stress over the last 7 years. I have been under the care of my GP and medicated for anxiety and depression. I have also been diagnosed with [name of condition redacted]. None of these conditions are helped by ANY stress and the amount of undue stress I have endured over the last 7 years trying to rectify a situation that was simply handballed around Centrelink’s departments with no due care shown for my health and wellbeing, is just unacceptable.
ORAL EVIDENCE
Asked whether she provided an estimate of her husband’s income to the Agency, Mrs Large said: “I provided payslips and, when requested his [Mr Large’s], payslips. I was unable to update his income. As far as I knew, Centrelink had all his income information.”
In response to a direct question from the Tribunal, the Applicant said: “I told them from when we were married in 2017. I gave them the information. They told me there was a glitch and they were unable to join Darren and me. They said they would send it to IT to enable the glitch to be fixed.”
In response to a direct question from the Tribunal about whether the Applicant provided tax returns of her husband, Mrs Large responded, “I believe I did. I do have my tax returns for the debt periods and my husband’s, but not the dates they were submitted.”
Mrs Large agreed that from 2018-19 her husband’s annual income was consistently over $100,000. When asked whether she thought the combined income amount of $51,000 was correct, the Applicant responded, “It wasn’t correct because my husband was earning over $100,000. But I was in regular conversation with Centrelink because my husband’s income was not included. They kept saying it would be escalated to IT. I believe I had done and provided all that was requested.”
When asked whether she was aware that her husband’s income was not being taken into account, but she believed she had done everything asked of her, the Applicant responded, “Yes. I was told I would not be receiving a payment that I was not entitled to.”
When asked whether at the time she had any suspicion that she was not entitled to a payment she was receiving, Mrs Large replied, “No. As far as I was aware it was correct, because they had all my husband’s information.”
Mrs Raveendiran asked the Applicant how many times she estimated she contacted the Agency between December 2017 and June 2021. She responded, “In my statement I did note some of the calls I had made. I couldn’t tell you how many times. I was assured I would be called back within 24 hours. I never got a call back. I didn’t have time with two children, one with special needs, a husband, a job, a household and a dog.”
The Respondent noted that the notices sent (TD, p 702) required advice if a primary earner’s income went above $100,000. Mrs Large responded, “I don’t think I ever read the back of a notice, but they had my husband’s income.”
Mrs Large said that her husband is still employed, and she estimated his annual income is between $180,000 and $190,000.
In response to direct questions from the Tribunal about her financial circumstances, the Applicant said her income this financial year is about $45,000. She said that the family has just moved house and had doubled their mortgage, with a home loan repayment amount of around $5,000 a month. She said one of her two sons attends a non-government school at a cost of around $5,000 a year. In respect of her children, Mrs Large said one son is aged 15 and is at school. The older son is 18 and has special needs. He is about to undertake his VCE which he will do under special consideration over four years. Mrs Large said she and her husband have the ‘usual household expenses’ with two teenagers who ‘eat a lot,’ with expenses such as petrol, water rates, the Internet, and two cars to maintain and run.
Mr Large also gave oral evidence. He confirmed that, depending on what overtime he does, he is paid between $180,000 and $190,000 a year. Mr Large said the dispute with the Agency had taken a toll on his wife’s physical and mental health over several years, and he could not see what more she could have done.
Ms Cobbin, the Applicant’s mother, also gave oral evidence. She told the Tribunal about the effect of the dispute on her daughter and how she kept being told by the Agency, having provided information, that they had not received it.
Closing submissions
Mr Jeffs made closing submissions. He said that the case before the Tribunal seemed to be framed by the Respondent as though the Applicant had done something wrong. He said she had made numerous telephone calls to the Agency, and it had displayed an inability to get things right. He noted that in the Respondent’s submissions the name and surname of Mr Large was wrong, which was an example of the lack of accuracy shown by Centrelink in respect of their treatment of the Applicant. He said that Mrs Large had been told more than once by the Agency that if she were not entitled to a benefit, she would not have received it. He said that she had also been told that interest would not be added while the Applicant had matters before the Tribunal for review, but then had received a ‘threatening letter’.
In the Respondent’s closing submissions, Mrs Raveendiran said the debts could not be written off. They were not irrecoverable at law, Mrs Large’s whereabouts are known, and the Applicant was not in financial hardship having, on her own evidence, a household income of more than $200,000 per annum.
The Respondent emphasised that no criminal accusations were being levelled at Mrs Large, and the Secretary accepts that there was a series of administrative errors, and that the Applicant did contact the Agency to try and ensure her and her husband’s income were linked. However, the Respondent said that sole administrative error needs to be demonstrated in order for the debts to be completely waived. Mrs Raveendiran submitted that the Applicant had ‘incomplete engagement’ with the Agency because she was meant to provide an annual income estimate of both her and her husband’s income, if the income of the primary earner exceeded $100,000.
The Respondent acknowledged that Mrs Large said she did provide adjustable taxable income, but it was not recorded in Centrelink records, and it was ‘highly unlikely’ that it would not have been recorded. Mrs Raveendiran said more weight should be given by the Tribunal to the documentary evidence of the Agency and there was no evidence that the Applicant did provide adjustable taxable income.
Mrs Raveendiran reiterated that it is open to the Tribunal to waive some of the debt, but also open to the Tribunal to find that the monies were not received in good faith. In terms of special circumstances, she submitted that the Respondent accepts that Mrs Large did not knowingly fail to comply with the law, and that the series of administrative errors amount to ‘special circumstances’ and therefore merit a 20 per cent reduction in the outstanding debts. She submitted that any further waiver was not appropriate.
In terms of the Applicant’s financial circumstances, the Respondent said on the evidence given, they did not amount to ‘special circumstances’. In response to a direct question from the Tribunal as to what the basis of the submission of the Secretary was that a 20 per cent waiver of the remaining debts was appropriate, Mrs Raveendiran said that those were her instructions.
CONSIDERATION
The Applicant has debts under s 71 of the Act because her and Mr Large’s combined actual adjusted taxable income was not taken into account in calculating the family tax benefit paid to her.
Section 95 of the Act provides that the Secretary of the Department may write off a debt if the debt is irrecoverable or will not be repaid. A debt may be written off if it is irrecoverable at law, the debtor has no capacity to repay the debt, the debtor’s whereabouts are not known, or it is not cost effective for the Commonwealth to take action to recover the debt.
The Tribunal finds that none of these criteria apply to the Applicant.
Section 97 of the Act provides that the Secretary, or the Tribunal standing in his shoes, must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth. The Secretary must waive the administrative error proportion of a debt if the debtor received, in good faith, the payment or payments that gave rise to the administrative error proportion of the debt, and the person would suffer severe financial hardship if it were not waived.
In this matter, the Respondent has conceded that the debt for the period 1 December 2017 to 25 February 2018 and for the period 8 August 2018 to 4 September 2018 arose due to sole administrative error and may be waived, subject to the Tribunal’s findings about good faith. The Respondent submits that the debts for the remaining period did not arise due to sole administrative error as Mrs Large contributed to the overpayment by not providing her husband’s estimated adjusted taxable income until 18 June 2021 and by not engaging with the notices sent to her by the Agency.
The Tribunal considers that the Respondent is correct to describe the Agency’s conduct in relation to its interactions with the Applicant as ‘poor administration’. There is corroborated evidence that Mrs Large at least three times advised the Agency of her marriage, and provided proof in terms of a marriage certificate. There is also conceded evidence that she provided PAYG and other pay details for her husband to the Agency. It is admitted by the Respondent that a ‘glitch’ which was a known data matching problem affected, it appears to the Tribunal, the change in the Applicant’s surname upon her marriage and the ability of the Agency to link her and Mr Large’s details.
There is evidence before the Tribunal that the Applicant on several occasions sought to fix the problems with payments to her by the Agency, and was told that she would not receive payments to which she was not entitled. However, she did.
The tension here is that while it is conceded that the Applicant has been the victim of poor administration by the Agency, the Respondent’s argument is that Mrs Large was nonetheless sent many notices under s 25 of the Act, and she thereby had an obligation, when it became apparent, to advise the Agency of Mr Large’s adjustable taxable income, which would have affected the family tax benefit payable.
In her oral evidence, the Applicant admitted she did not read all the fine print on the reverse of the notices sent to her. Therefore, she did contribute to the mounting of the debt, and the Tribunal cannot find that it can be sheeted to sole administrative error by the Respondent’s Department, even if there are admitted administrative failures.
The Tribunal found the evidence of the Applicant frank and open. What she said was relevantly corroborated by her husband’s evidence and that of her mother, and by the oral submissions of her advocate. The Tribunal understands the level of frustration that the Applicant has met, especially where there is evidence that she properly informed the Agency of changes in her personal circumstances, on several occasions, and the Agency simply failed to input those changes that affected her entitlement to the family tax benefit.
In terms of whether Mrs Large received the family tax benefit payments in good faith, French J, as His Honour then was, in the Federal Court of Australia said in Haggerty vDepartment of Education, Training and Youth Affairs [2000] FCA 1287, at [16]:
…want of good faith will arise where there is a positive belief that the payment has been made by mistake. It will also arise where there is a suspicion held by the recipient that he or she may not be entitled to the payment made or a doubt as to the entitlement coupled with some objective basis for such suspicion or doubt.
I am satisfied that there is no evidence before the Tribunal that Mrs Large had a positive belief that she was receiving payments by mistake. She had been assured, she says, on more than one occasion that she would not receive payments to which she was not entitled. Whilst that is only her evidence, it is bolstered by the evidence of the Respondent from the print outs where officers record visits by the Applicant and where internal notes admit the data matching that should have taken place had not.
The Federal Court has also held that a person does not receive a payment in good faith if they turn a blind eye to circumstances which raise doubt as to the right to receive and retain a payment, or refuses to make reasonable inquiries where doubt exists: Jazazievska v Secretary, Department of Family &Community Services [2000] FCA 1484, Cooper J at [41].
There must be a mental element when a person has been found to have ‘turned a blind eye’ and, while Mrs Large admits she did not read the fine print on the reverse of the notices which might have prompted her to provide further material about her husband’s income, this is not a case where she had not already (twice at least) provided PAYG and other income documents for Mr Large, as well as proof of marriage. The Tribunal cannot conclude that Mrs Large had not made ‘reasonable inquiries’ of the Agency.
The Tribunal is satisfied that the Applicant received the payments in good faith.
However, withal, the fact remains that the Applicant did receive family tax benefits to which she was not entitled, because of the quantum of her husband’s income. She did receive notices which periodically recorded payments made into her account, and reminded her (each time) that she must advise the Agency of any change in her personal circumstances which might affect the payments. This Tribunal and the Courts have several times expressed the philosophical view that there is a general expectation on behalf of the hypothetical taxpayer that a person, who has received public funds to which he or she was not entitled, should have to repay them. I agree with that general principle. There was some contribution by Mrs Large to the overpayment, even if I am satisfied that it was not deliberate nor with any intention of receiving funds more than she was entitled to receive.
In respect of whether interest charges should be levied, I accept the Respondent’s submissions that a determination should be made under s 78E of the Act that interest should not be payable, because the Applicant had a reasonable excuse for not entering into a repayment arrangement. I note that at the urgent interlocutory hearing held on 30 August 2024, the Respondent advised that there were ‘systems issues’ at Services Australia which were hampering the calculation of interest, and that if the Tribunal determined that interest was payable, that part of the matter should be remitted to the Department for manual recalculation of the interest. However, as the Tribunal has found that interest is not payable, that is not necessary.
The Tribunal is satisfied that the Applicant is not in severe financial hardship. On her and Mr Large’s evidence, his income is around $185,000 per annum and the Applicant’s is around $45,000. They have household expenses such as a mortgage, car costs, utility bills, grocery and educational bills, and the requirements of their sons, one of whom has special needs. The Tribunal accepts that they are facing challenges as many Australian households do, but they are managing well, and it is not in my view unreasonable or overly burdensome to require some repayment of the family tax benefit amounts wrongly paid to the Applicant.
In respect of whether ‘special circumstances’ are applicable, s 101 of the Act provides that the Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that the debt did not result wholly or partly 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 family assistance law, and that there are special circumstances other than financial hardship alone that make it desirable to waive all or part of a debt.
The Respondent conceded, at paragraph 90 of the Secretary’s written submissions, that the poor administration of the Agency throughout the debt period has resulted in some unfairness to the Applicant and submitted that 20 per cent of the each debt would be ‘appropriately’ waived because the poor administration of the Agency was, in the words of the Respondent, ‘unusual, uncommon and out of the ordinary’, and therefore should be considered a circumstance which was special.
In this case, the Tribunal accepts the submissions of the Respondent that a waiver of part of the outstanding debts is appropriate on the grounds that special circumstances apply. However, because of the specific facts surrounding the Applicant’s several visits to the Agency and the provision of documents which were, apparently, ignored or put aside and not recorded, the Tribunal considers the quantum of waiver should be higher than the Respondent submitted and that one of the first review decisions assigned.
The Tribunal is satisfied, in the circumstances of this case and taking into account the submissions of the parties, the oral evidence of the Applicant and the papers lodged by the Respondent, that the following is the correct and preferable decision to make.
DECISION
The decisions of the Social Services and Child Support Division of the Tribunal made on 15 February 2023 and 5 October 2023 are set aside.
In substitution, the Tribunal decides as follows: That at the date of this decision –
(a)the Applicant has a family tax benefit debt for the financial year 2017-2018. The debt for the period 1 December 2017 to 25 February 2018 is wholly waived for sole administrative error. Forty per cent of the remaining debt is waived on the basis of special circumstances.
(b)the Applicant has a family tax benefit debt for the financial year 2018-2019. The debt for the period 1 August 2018 to 4 September 2018 is wholly waived for sole administrative error. Forty per cent of the remaining debt is waived on the basis of special circumstances.
(c)the Applicant has family tax benefit debts for the financial years 2019-2020 and 2020-2021. Forty per cent of these debts is waived on the basis of special circumstances.
In addition –
(a)a determination is made under s 78E of the Act that interest charges are not payable.
(b)the Respondent is directed to recalculate the debts in accordance with this decision and advise the Applicant that she may enter into a repayment plan.
I certify that the preceding 79 (seventy -nine) paragraphs are a true copy of the reasons for the decision herein of Senior Member D. J. Morris
..................................[sgn]......................................
Associate
Dated: 6 September 2024
Date(s) of hearing: 30 August 2024 Advocate for the Applicant: Self-represented, assisted by Mr Graeme Jeffs Advocate for the Respondent: Mrs Aarabi Raveendiran Solicitors for the Respondent: Services Australia
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