Longford and Secretary, Department of Social Services (Social services second review) - [2020] AATA 5136

Longford and Secretary, Department of Social Services (Social services second review) [2020] AATA 5136 (18 December 2020)
AppID:           Longford and Secretary, Department of Social Services
MatterType:   Social services second review
Division:GENERAL DIVISION
File Number(s):     2019/7846
Re:Jessica Longford
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Member W Frost
Date:18 December 2020
Place:Canberra

The decision under review is affirmed pursuant to subsection 43(1)(a) of the Administrative Appeals Tribunal Act 1975.
.............[sgd]...............................................
Member W Frost
Catchwords
Youth Allowance debt – whether debt should be written off or waived – income not reported correctly – whether special circumstances exist – administrative error - debt originally calculated using ATO income averaging data - recalculation of debt in accordance with pay records from employer
Legislation
Social Security Act 1991 ss 8, 1067G, 1072, 1073B, 1223, 1236, 1237A, 1237AAD
Social Security (Administration) Act 1999 ss 68, 100, 123, 182
Cases
Angelakos and Secretary Department of Employment and Workplace Relations [2007] FCA 25
Beadle and Director-General of Social Security (1984) 6 ALD 1 at [12]
Davy and Secretary Department of Employment and Workplace Relations [2007] AATA 1114
Dranichnikov and Centrelink [2003] FCAFC 133
Feneley and Secretary, Department of Family and Community Services [2003] AATA 496
Groth and Secretary Department of Social Security (1995) FCA 1708
Klaverstyn and Secretary, Department of Family and Community Services [2003] AATA 71
Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435 at [48]
Re Gerhardt and Department of Employment, Education and Training [1996] AAT 10941
Re Ivovic and Director General of Social Services (1981) 3 ALN N95
Re Lumsden and Secretary Department of Social Security [1986] AATA 228
Secretary, Department of Family and Community Services and Birgden [2003] AATA 67
Secretary, Department of Social Security v Coralie Hales [1998] FCA 219
Secretary, Department of Family & Community Services v Sekhon [2003] FCA 76
Wall and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 740
REASONS FOR DECISION
Member W Frost
18 December 2020
INTRODUCTION

This decision concerns the alleged overpayment of more than $17,000 of the social security payment, Youth Allowance, and what should happen if there is such a debt. The Applicant, Ms Jessica Longford, was in receipt of Youth Allowance during two distinct periods of time between November 2010 and June 2014.
At all relevant times, the then Department of Human Services (now Services Australia and referred to in this decision as the Agency) was not informed by Ms Longford of her actual income for the purposes of determining the correct rate of her Youth Allowance payments.
In 2014, the Agency ceased Youth Allowance payments to Ms Longford because she had begun receiving a different social security payment. In 2015, the Agency raised two debts against Ms Longford totalling $28,101.35. Ms Longford disputed these alleged debts and in 2017 an Authorised Review Officer (ARO) varied the total debt amount to $27,188.95.
Ms Longford applied for review by the Social Services and Child Support Division of the Administrative Appeals Tribunal (AAT1). In September 2019, the AAT1 set aside the ARO’s decision and remitted it to the Agency with directions that the Agency should adopt Ms Longford’s actual earnings obtained from bank statements and recalculate the alleged debt amount. This process led to the reduction of the alleged debts to $26,382.08. Ms Longford subsequently applied to the General Division of the Administrative Appeals Tribunal (Tribunal) for review of the AAT1 decision. During the course of this proceeding, the Agency has twice recalculated Ms Longford’s alleged debts, the final time by using pay records provided by Ms Longford’s employer during the relevant period of time. These recalculations resulted in one debt being reduced to a nil amount and the second debt being reduced to $17,291.95 (Total Debt).
The Tribunal has considered all documents in a bundle filed in this proceeding by the Respondent in January 2020 pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (AAT Act).[1] The Tribunal has also considered the following documents:
(a)Email submissions from Ms Longford dated 13 November 2020;[2]
(b)Psychological Assessment Report from Mind Spot Clinic dated 2 August 2020;[3]
(c)Various documents filed by Ms Longford on 1 April 2020, comprising social security payment details, utilities and other household bills and a personal loan summary;[4]
(d)Further documents filed by Ms Longford after the hearing on 2 December 2020, comprising doctors’ receipts and referral letters for her son and the first page of a letter from Legal Aid New South Wales dated 20 November 2020;[5]
(e)Respondent’s Statement of Facts, Issues and Contentions dated 28 April 2020 (with annexures);[6] and
(f)Respondent’s Supplementary Submissions dated 20 October 2020 (with annexures).[7]
[1] Being Exhibit R1.
[2] Exhibit A1.
[3] Exhibit A2.
[4] Exhibit A3.
[5] Exhibit A4.
[6] Exhibit R2.
[7] Exhibit R3.
For the following reasons, the Tribunal has affirmed the AAT1 decision, meaning Ms Longford’s application is unsuccessful and she owes the Total Debt to the Commonwealth.
ISSUES
The issues for determination by the Tribunal are:
(a)whether Ms Longford was overpaid Youth Allowance in the period 31 January 2013 to 18 June 2014; and
(b)if so, whether all or part of the debt should be written off or waived.
BACKGROUND
On 15 November 2010, Ms Longford commenced receiving Youth Allowance.[8]
[8] Exhibit R1, T4, page 137.
On 28 February 2012, Ms Longford’s Youth Allowance was cancelled (with effect from 31 January 2012) as she had not reported her income.[9]
[9] Exhibit R1, T6, page 289.
On 15 March 2012, Ms Longford contacted the Agency about her intention to reclaim Youth Allowance.[10] The Agency arranged an appointment for Ms Longford with a ‘Job Services Australia Provider’ to assess her claim for Youth Allowance and was requested to provide documents including payslips in support of her claim.[11] From 15 March 2012, Ms Longford’s claim for Youth Allowance was accepted and she again commenced receiving Youth Allowance.[12]
[10] Exhibit R1, T6, page 292.
[11] Exhibit R1, T6, page 297.
[12] Exhibit R1, T8, page 304.
On 4 December 2014, Ms Longford’s Youth Allowance payments ended because she had begun receiving a different social security benefit.[13]
[13] Exhibit R1, T8, page 614.
During the relevant periods between November 2010 and December 2014, Ms Longford received notices under subsection 68(2) of the Social Security (Administration) Act 1999 (Administration Act) regarding her Youth Allowance. Those notices informed Ms Longford that she must advise the Agency of any changes in circumstances affecting her payment, including whether her income changed, and outlined reporting requirements for income earned while in receipt of Youth Allowance.[14]
[14] Exhibit R1, T4; T6; and T8.
On 8 December 2015, the Agency raised two Youth Allowance debts against Ms Longford.[15] These debts were based on information received by the Agency from the Australian Taxation Office (ATO) regarding Ms Longford’s income between 1 July 2010 and 30 June 2014, which identified that she had earned more income than she reported during this period. As Ms Longford had not provided payslips or other evidence to confirm her earnings during the relevant period, the income amounts obtained from the ATO were apportioned for each year to obtain an average fortnightly wage. This was compared to the income reported by Ms Longford and the Agency alleged that she was paid more Youth Allowance than she was entitled to during the relevant period. These two alleged debts totalled $28,101.35 and were as follows:
(a)$5,521.33 for the period 4 January 2011 to 16 January 2012 (debt number M0291894) (First Debt); and
(b)$22,580.02 for the period 20 April 2012 to 21 September 2014 (debt number M0289210) (Second Debt).
[15] Exhibit R1, T10, pages 742-745.
On 30 June 2017, following a request for review from Ms Longford and the receipt of more specific earnings information from her employers during the relevant period, an ARO varied the alleged debts so that they totalled $27,747.35, as follows:[16]
(a)the First Debt was reduced from $5,521.33 to $4,441.60 for the period 7 December 2010 to 24 January 2012; and
(b)the Second Debt was increased from $22,580.02 to $22,747.35 for the period 15 March 2012 to 18 June 2014.
[16] Exhibit R1, T13, pages 783-799.
In July 2019, Ms Longford applied to the AAT1 for review of the ARO’s decision.[17]
[17] Exhibit R1, T2, page 9.
In September 2019, the AAT1 set aside the ARO’s decision and remitted the matter to the Agency for reconsideration in accordance with directions for the Agency to:[18]
(a)adopt the actual earnings obtained from relevant bank statements provided by Ms Longford;
(b)apply the net to gross earnings calculator on the income received by Ms Longford during the relevant period, so no further verification is required from employers for the relevant period;
(c)consider each occasion Ms Longford notified of the income she received in the relevant period and the amount so reported with reference to the actual earnings from the bank account statements;
(d)recalculate the running balance of the income bank (or working credits) for the relevant period; and
(e)recalculate the amount of the overpayment of Youth Allowance paid to Ms Longford in the relevant period.
[18] Exhibit R1, T2, pages 7-14.
Since September 2019, and following the AAT1 decision, Ms Longford has been making repayments of the alleged debts the subject of this proceeding.
In October 2019, following receipt of copies of Ms Longford’s bank statements for the majority of the relevant period, the Agency recalculated the alleged debts as follows:[19]
(a)the First Debt was further reduced from $4,441.60 to $2,928.21 for the period 23 November 2010 to 30 January 2012; and
(b)the Second Debt was increased from $22,747.35 to $23,453.87 for the period 15 March 2012 to 18 June 2014.
[19] Exhibit R1, T20, pages 950 and 966-967.
In November 2019, Ms Longford lodged an application for review of the AAT1 decision with this Tribunal.[20]
[20] Exhibit R1, T1, pages 1-6.
In February 2020, the Tribunal made a direction (among others) requiring the Respondent to advise the Tribunal and Ms Longford of the amount by which it contended Ms Longford was overpaid Youth Allowance.
In March 2020, following the Agency obtaining further bank statements and additional information from Ms Longford’s employers, the Agency again recalculated the alleged debts as follows:[21]
(a)the First Debt was reduced from $2,928.21 to $0.00 for the period 23 November 2010 to 30 January 2012; and
(b)the Second Debt was reduced from $23,453.87 to $17,241.43 for the period 31 January 2013 to 18 June 2014 (being a reduced period of approximately 10 months from the previous calculation, which period was from March 2012 to June 2014).
[21] Annexure A to the Respondent’s Statement of Issues, Facts and Contentions dated 28 April 2020.
In June 2020, the Tribunal was scheduled to hold a hearing of Ms Longford’s application. However, in advance of the hearing Ms Longford requested an adjournment so that she could seek advice in relation to the class action the subject of the Federal Court of Australia proceeding Prygodicz & Ors v Commonwealth of Australia VID1252/2019, otherwise known as the ‘Robodebt Class Action’. The Tribunal vacated the scheduled hearing and granted Ms Longford time to seek such advice and inform the Tribunal as to whether she wished to proceed with her application. In July 2020, the Tribunal further extended this time until August 2020. In September 2020, Ms Longford informed the Tribunal and the Respondent that she wished to proceed with her application. The Tribunal, at the Respondent’s request, directed the Respondent to provide any recalculated alleged debt amount. The Respondent sought additional time to conduct a further investigation of the alleged debts having regard to any payroll information it could obtain from Ms Longford’s employers for the relevant period she was receiving Youth Allowance.
In October 2020, following a recalculation using only Ms Longford’s pay records from her employer, not income averaging pursuant to ATO data or Ms Longford’s bank statements, the Respondent alleged that Ms Longford’s Youth Allowance debts the subject of this proceeding were follows:[22]
(a)$0.00 for the First Debt; and
(b)$17,291.95 for the Second Debt for the period 31 January 2013 to 18 June 2014 (being an increase of $50.52 on the previous recalculation).
[22] Exhibit R3, Respondent’s Supplementary Submissions dated 14 October 2020.
On 2 December 2020, the Tribunal held a hearing of Ms Longford’s application.
LEGISLATION
Youth Allowance
Part 3.5 of the Social Security Act 1991 (Act) sets out the Youth Allowance rate calculator, with section 1067G outlining the method for calculating a person’s rate of Youth Allowance. Module H provides the method for determining the effect of a person’s ordinary income on their maximum payment rate. Step 1 is to work out the amount of the person’s ordinary income on a fortnightly basis.
Subsection 8(1) of the Act defines ‘income’, in relation to a person, as an income ‘earned, derived or received by the person for the person’s own use or benefit’, but that is not ‘maintenance income or an exempt lump sum’. An ‘income amount’ is described as valuable consideration, personal earnings, moneys or profits (whether of a capital nature or not).
Section 1072 of the Act relevantly provides that a person’s ordinary income for a period is a reference to the person’s ‘gross ordinary income from all sources for the period calculated without any reduction’.
Section 1073B of the Act provides that if:
(a) a person is receiving a social security pension or a social security benefit; and
(b) the person’s rate of payment of the pension or benefit is worked out with regard to the income test module of a rate calculator in this Chapter; and
(d) the person earns, derives or receives, or is taken, either by virtue of the operation of section 1073A or any other provision of this Act, to earn, derive or receive, employment income during the whole or a part of a particular instalment period of the person;
the person is taken to earn, derive or receive, on each day in that instalment period, an amount of employment income worked out by dividing the total amount of the employment income referred to in paragraph (d) by the number of days in the period.
Creation of the debt
Subsection 68(2) of the Administration Act relevantly provides that the Respondent may give a person a notice that requires the person to inform the Department if a specified event or change of circumstances occurs or the person becomes aware that a specified event or change of circumstances is likely to occur.
Subsection 123(3)(b) of the Administration Act states that a determination of the rate of a social security payment continues in effect until the payment becomes payable at a lower rate under section 98, 99 or 100 of that Act.
Subsection 100(1) of the Administration Act states that if:
(a) a person who is receiving a social security payment is given a notice under subsection 68(2); and
(b) the notice requires the person to inform the Department of the occurrence of an event or change of circumstances within a specified period (the notification period); and
(c) the event or change of circumstances occurs; and
(d) the person does not inform the Department of the occurrence of the event or change of circumstances within the notification period in accordance with the notice; and
(e) because of the occurrence of the event or change of circumstances, the rate of the social security payment is to be reduced;
the social security payment becomes payable to the person at the reduced rate on the day on which the event or change of circumstances occurs.
Subsection 1223(1) of the Act provides that if:
(a) a social security payment is made; and
(b) a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;
the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.
Writing off the debt
Section 1236 of the Act relevantly provides that:
(1) Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.
(1A) The Secretary may decide to write off a debt under subsection (1) if, and only if:
(a) the debt is irrecoverable at law; or
(b) the debtor has no capacity to repay the debt; or
(c) the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d) it is not cost effective for the Commonwealth to take action to recover the debt.
(1B) For the purposes of paragraph (1A)(a), a debt is taken to be irrecoverable at law if, and only if:
(b) there is no proof of the debt capable of sustaining legal proceedings for its recovery; or
(c) the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or
(d) the debtor has died leaving no estate or insufficient funds in the debtor’s estate to repay the debt.
(1C) For the purposes of paragraph (1A)(b), if a debt is recoverable by means of:
(a) deductions from the debtor’s social security payment; or
(b) deductions under section 84 of the A New Tax System (Family Assistance) (Administration) Act 1999; or
(c) setting off under section 84A of that Act;
the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship.
…
Waiving the debt
Administrative error
Subsection 1237A(1) of the Act relevantly provides that the Respondent ‘must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt’.
Special circumstances
Section 1237AAD of the Act states that the Respondent may waive the right to recover all or part of a debt if satisfied that:
(a) the debt did not result wholly or partly from the debtor or another person knowingly:
(i) making a false statement or a false representation; or
(ii) failing or omitting to comply with a provision of this Act, the Administration Act or the 1947 Act; and
(b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c) it is more appropriate to waive than to write off the debt or part of the debt.
CONSIDERATION
What is the decision under review by this Tribunal?
The decision under review by this Tribunal is the decision of the AAT1 in September 2019, which set aside the ARO’s decision and remitted the matter to the Agency for reconsideration in accordance with various directions, including that the alleged debts be recalculated.
As a result of the AAT1’s directions to the Agency, the First Debt and the Second Debt were recalculated in October 2019. Ms Longford applied to this Tribunal in November 2019 for review of the AAT1 decision. During this Tribunal proceeding, the First Debt and the Second Debt have been recalculated on two occasions, in March and October 2020. As previously mentioned in these reasons, due to the Agency’s recalculations this year, the First Debt for the period between November 2010 and January 2012 was amended to be $0.00 and the Second Debt for the period between January 2013 and June 2014 was amended to be $17,291.95. Because the alleged First Debt has now been reduced to zero, the Second Debt is the Total Debt alleged by the Agency to be owing by Ms Longford.[23]
[23] Exhibit R3, Annexures A2 and A3.

Pursuant to subsection 182(2) of the Administration Act, if an officer of the Agency varies or substitutes a decision after an application has been made for second review by the Tribunal, the AAT1 is taken to have varied or substituted the decision under review in the way the officer did and the application is taken to be an application for second review of the decision as varied or substituted. Accordingly, under this provision, the AAT1 is taken to have varied the ARO’s decision and recalculated the alleged debts to be $0.00 for the First Debt and $17,291.95 for the Second Debt and the decision under review by this Tribunal is the AAT1 decision as varied by the Agency’s recalculations that occurred during this proceeding.
Does Ms Longford have a Youth Allowance debt?
The Tribunal is satisfied that Ms Longford does have a Youth Allowance debt, being the Total Debt of $17,291.95, based on the recently produced pay records from her employer during the relevant period in which she was receiving Youth Allowance.[24]
[24] ibid.
The Agency initially raised a debt against Ms Longford for the Second Debt in the amount of $22,580.02 for the period 20 April 2012 to 21 September 2014.[25] However, as a result of the various recalculations and further information obtained by the Agency in the course of this proceeding, the Second Debt was reduced to $17,291.95 for a narrower period of 31 January 2013 to 18 June 2014. During this period, Ms Longford was paid $18,895.61 in Youth Allowance by the Agency, but based on her income she was only entitled to $1,603.66 in Youth Allowance. This resulted in an overpayment of Youth Allowance to Ms Longford in the amount of $17,291.95.[26]
[25] Exhibit R1, T10, page 744.
[26] Exhibit R3, Annexure A3.
At the hearing, Ms Longford disputed her period of employment as provided by her former employer, which recorded her having last worked on 7 December 2014, in circumstances where Ms Longford said she understood she had last worked in late November 2014 before she gave birth to her child in early December 2014. However, this discrepancy is not material to the outcome of this proceeding because the debt period ends some six months earlier in June 2014. Additionally, Ms Longford also stated that the difference between the Agency’s reporting periods and the pay cycles of her then employer had made it difficult to accurately assess and report her actual income in any particular period. However, the Tribunal is not satisfied that this is an adequate explanation for Ms Longford’s inability to correctly inform the Agency of her income during the relevant period under review. The income received by Ms Longford from her employer during the relevant period was recorded by her employer, but Ms Longford could not recall whether she was paid those amounts because she does not have access to bank statements from that time.
Ms Longford failed to correctly declare her income from employment to the Agency as required by subsection 68(2) of the Administration Act. The AAT1 noted that Ms Longford said ‘she notified Centrelink of the income she earned during the relevant period, however she accepted that the amounts she gave notice of may not have been accurate,’ which was attributed to the non-alignment of her pay periods to the Centrelink pay periods and also because she did not receive her payslips in a timely manner.[27]
[27] Exhibit R1, T2, page 9.
As a result, Ms Longford’s rate of Youth Allowance was calculated on an incorrect basis during the debt period in question and she received payment of Youth Allowance in excess of her actual entitlement. The recalculated debt amounts represent the correct calculation of the overpayment received by Ms Longford during the relevant period, as they are solely based on Ms Longford’s actual income for each fortnight in question derived from her employer’s pay records. These debt amounts were calculated without reference to the income amounts received from the ATO or the subject of any associated income averaging process.
The Tribunal accordingly finds that the total amount of the payments made to Ms Longford during the relevant periods in excess of her actual entitlement, being the Total Debt amount of $17,291.95 is a debt due to the Commonwealth pursuant to subsection 1223(1) of the Act.
Should the debt be recovered?
The Tribunal was informed by the representative of the Agency that Ms Longford is currently receiving two social security payments and has been repaying the Total Debt to the Agency since the AAT1 decision in September 2019.
In Secretary, Department of Social Security v Coralie Hales,[28] Justice French espoused the principle that the Australian community or ‘taxpayer is entitled to expect that in the ordinary course money paid to people which they are not entitled to receive will be recovered, albeit in a way appropriate to the circumstances which led to the overpayment and the circumstances of the persons concerned’. The Act accordingly provides for the writing off and waiver of debts that are due to the Commonwealth.
[28] [1998] FCA 219.
Should the debt be written off?
Section 1236 of the Act provides that the Respondent, or here the Tribunal, may on behalf of the Commonwealth decide to write off a debt for a period of time. However, a debt may only be written off if the debt is irrecoverable at law, the debtor has no capacity to repay the debt, the debtor’s whereabouts are unknown or it is not cost effective for the Commonwealth to pursue action to recover the debt. If a social security debt is written off, its recovery is put on hold for a stated period. The debt therefore still exists and may be recovered later by the Agency.
Subsection 1236(1B) of the Act sets out the circumstances when a debt is irrecoverable at law. These circumstances are inapplicable in this proceeding.
Subsection 1236(1C) of the Act relevantly provides that if a debt is recoverable by means of deductions from a debtor’s social security payment, the person is taken to have a capacity to repay the debt unless recovery by those means would result in the person being in ‘severe financial hardship’. The meaning of ‘severe financial hardship’ has been considered in a number of Tribunal decisions.[29] In Feneley and Secretary, Department of Family and Community Services,[30] the Tribunal stated that:
the meaning of the term, while not implying destitution goes beyond straightened financial circumstances and imports a need for the particular circumstances of a person to include suffering of a severe or extreme nature.
[29] Re Lumsden and Secretary Department of Social Security [1986] AATA 228; Secretary, Department of Family and Community Services and Birgden [2003] AATA 67 and Klaverstyn and Secretary, Department of Family and Community Services [2003] AATA 71.
[30] [2003] AATA 496 at [36].
The Tribunal was informed that Ms Longford is currently employed by the ‘Narrandera Club Motel’.[31]
[31] Exhibit R2.
As previously mentioned in these reasons, Ms Longford also currently receives two social security payments, being parenting payment single in the amount of $804.30 (minus various deductions) and family tax benefit in the amount of $486.34 per fortnight. Ms Longford is presently repaying the Total Debt from her Youth Allowance payments in $15 fortnightly payments withheld from parenting payment single. This repayment commenced following the AAT1 decision in September 2019. The Respondent informed Ms Longford and the Tribunal at the hearing that the Total Debt owed to the Agency as at that date, being 2 December 2020, was $14,300.15, being a reduction of the Total Debt in the amount of $2,991.80.
On the evidence before the Tribunal, it is not satisfied that there are grounds to write off the Total Debt. The Tribunal finds that the Total Debt cannot be written-off under section 1236 of the Act because the Total Debt is not irrecoverable at law; Ms Longford has capacity to repay the Total Debt and is currently doing so in small fortnightly instalments; and repayment of the Total Debt would not result in Ms Longford experiencing severe financial hardship. While noting that Ms Longford does currently have financial difficulties, the Tribunal finds that these do not amount to her presently experiencing, or likely to experience, severe financial hardship, including through the continued repayment of the Total Debt.
Can the debt be waived?
Administrative error
Under section 1237A of the Act, the Respondent, or here the Tribunal, must waive the right to recover a debt that is ‘attributable solely to an administrative error made by the Commonwealth’ if the debtor received the payments the subject of the debt in good faith.
In Re Gerhardt and Department of Employment, Education and Training,[32] the Tribunal stated that the word ‘solely’ was to be given its ordinary meaning, being ‘exclusively,’ ‘only’ and ‘to the exclusion of all else.’ For instance, the Federal Court of Australia in Secretary, Department of Family & Community Services v Sekhon[33] stated that administrative error ‘must be the sole cause, not merely one of multiple causes’. To this end, the duty to waive a debt does not extend to those debts attributable to errors or other factors independent of any administrative error made by the Commonwealth.
[32] [1996] AAT 10941.
[33] [2003] FCA 76.
The Tribunal finds that the Total Debt cannot be waived under section 1237A of the Act because there is no administrative error attributable solely to the Commonwealth. Ms Longford did not inform the Agency of her correct income during the relevant period she was in receipt of Youth Allowance. Therefore, the Total Debt was not solely the result of any administrative error made by the Commonwealth, but rather was attributable to Ms Longford’s failure to correctly advise the Agency of her income as required by law. To this end, during the relevant period, Ms Longford was issued multiple notices by the Agency requiring her to notify the Agency of the correct amount of her employment income.[34] For these reasons, the Tribunal is not satisfied that the Total Debt can be waived under section 1237A of the Act.
Special circumstances
[34] See, for example, Exhibit R1, T4, pages 54-174; T6, pages 180-299; and T8, pages 304-727.
Pursuant to section 1237AAD of the Act, the Respondent, or here the Tribunal, may waive the right to recover all or part of a debt if satisfied that it did not result from the debtor ‘knowingly’ making a false statement or ‘failing or omitting to comply’ with a provision of the social security legislative framework and there are ‘special circumstances (other than financial hardship alone) that make it desirable to waive’ and it is ‘more appropriate to waive than to write off the debt or part of the debt’.
The term ‘knowingly’ in relation to the making of a false statement is not defined in the Act, however the Tribunal’s decision of Re Callaghan and Secretary, Department of Social Security[35] states that it means 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’. The identification of actual knowledge is to be determined by reference to the person’s statements as to ‘his or her actual state of knowledge at the time and to events surrounding the false statement or the act or omission’. In Wall and Secretary, Department of Education, Employment and Workplace Relations (Wall)[36] the Tribunal relevantly stated that:
In Taylor’s Central Garages (Exeter) Ltd v Roper [1951] WN 383 at 385, Devlin J considered the meaning of “knowledge” and found that actual knowledge can be inferred from the evidence and the nature of the acts done. Further, in RCA Corporation v Custom Cleared Sales Pty Ltd (1978) 19 ALR 123 at 126, the Court of Appeal in the Supreme Court of New South Wales said:
“In inferring knowledge, a court is entitled to approach the matter in two stages; where opportunities for knowledge on the part of the particular person are proved and there is nothing to indicate that there are obstacles to the particular person acquiring the relevant knowledge, there is some evidence from which the court can conclude that such a person has the knowledge. However, this conclusion may be easily overturned by a denial on his part of the knowledge which the court accepts, or by a demonstration that he is properly excused from giving evidence of his actual knowledge.”
Following the decision in RCA Corporation, it is open to the Tribunal to infer that a person had actual knowledge of their obligations under the Act where there were opportunities for them to gain that knowledge and where there were no obstacles to them acquiring the knowledge. In the present case, the respondent sent letters to the applicant notifying him of his obligations under the Act. However, there may well have been obstacles that would have prevented Mr Wall from being alert enough to understand his obligations under the Act. Those obstacles were his inebriated state at the time of the overpayments. I am satisfied that, as a result of his inebriation, certainly in respect of the overpayments between July 2003 and late 2005/early 2006, Mr Wall’s ability to comprehend his obligations and responsibilities under the Act was reduced. Accordingly, I am satisfied that he did not knowingly fail to comply with his obligations under the Act and s 1237AAD can apply.
[35] (1996) 45 ALD 435 at [48].
[36] [2010] AATA 740 at [28]-[29].
The meaning of ‘special circumstances’ was considered by the Tribunal in Beadle and Director - General of Social Security[37] to mean circumstances that are ‘unusual, uncommon or exceptional’. Although the circumstances need not be unique, they ‘must have a particular quality of unusualness that permits them to be described as special’. In this regard, the Tribunal in Davy and Secretary Department of Employment and Workplace Relations,[38] stated that the provision ‘necessarily requires a consideration of the person’s individual circumstances but also a consideration of the general administration of the social security system’. Furthermore, in Dranichnikov and Centrelink,[39] the Full Federal Court of Australia stated that ‘[t]o some extent the question whether there were special circumstances must depend on how it came about that the error occurred’.[40]
[37] (1984) 6 ALD 1 at [12].
[38] [2007] AATA 1,114 at [80].
[39] [2003] FCAFC 133 at [66].
[40] The Tribunal has considered ‘special circumstances’ in numerous other proceedings, including: Groth and Secretary Department of Social Security (1995) FCA 1708; Re Ivovic and Director General of Social Services (1981) 3 ALN N95; Angelakos and Secretary Department of Employment and Workplace Relations [2007] FCA 25; and Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114.
Applying the principle enunciated in Wall, the Tribunal finds that Ms Longford had actual knowledge of her obligations under the Act because of the multiple opportunities for her to acquire that knowledge. Ms Longford was sent multiple letters by the Agency under subsection 68(2) of the Administration Act informing her that she must advise the Agency of any changes in circumstances affecting her payment, including whether her income changed, and outlined the reporting requirements for income earned while in receipt of Youth Allowance. Ms Longford told the Tribunal under cross-examination that she was not knowingly making false statements or false representations by incorrectly reporting the amount of her income during the relevant period she was in receipt of Youth Allowance.
Ms Longford was taken to file notes held by the Agency which showed her having reported employment income on various dates between November 2013 and January 2014.[41] For example, for the pay period 5 to 18 December 2013, Ms Longford reported to the Agency employment income in the amount of $96.50 for 8 hours worked. Ms Longford could not recall reporting this income to the Agency, including because she was at that time working several jobs. The employer pay records produced during this proceeding showed that Ms Longford earned $1,054.50 for 47.50 hours worked during the fortnight ending 22 December 2013.[42] In response, Ms Longford said that correctly reporting her income to the Agency was difficult in circumstances where she received her payslips some time after having to report her income and because she was required to identify the days and hours worked during the Agency’s relevant reporting fortnight in addition to trying to account for income tax. Ms Longford also said that perhaps she meant to report $960.50 for the relevant fortnight, rather than the $96.50 recorded, and that this was a mistake and not deliberate. However, there are significant differences in the actual income earned by Ms Longford and the amounts she reported to the Agency over a sustained period of time.
[41] Exhibit R1, T23, pages 1360-1362.
[42] Exhibit R3, Annexure A2.
For the foregoing reasons and in accordance with the abovementioned authorities, the Tribunal is satisfied that Ms Longford knowingly made false statements to the Agency and finds that the right to recover the Total Debt should not be waived pursuant to section 1237AAD of the Act.
Because of this finding, a waiver of the Total Debt cannot be further considered under section 1237AAD of the Act. However, for completeness, the Tribunal turns briefly to consider whether special circumstances exist in relation to Ms Longford’s application.
Ms Longford requested the Tribunal waive or write off the Total Debt in full or in part because she was ‘young and alone’ at the relevant time when she incurred the debt. This has been causing financial stress because she is a single parent receiving social security benefits. Ms Longford told the Tribunal that she was experiencing financial difficulties, including because she is raising her son on her own with no support from family and friends and her son has medical issues requiring the regular engagement of specialist physicians for assessment and treatment. In addition, Ms Longford said she had not seen a psychologist regarding her psychological condition following an online assessment report prepared by the Mind Spot Clinic in August 2020 because of the difficulty in securing an appointment with a counsellor in rural New South Wales. Ms Longford also provided documentation showing repayments for utilities and other household bills such as her son’s school fees, together with a personal loan summary. Ms Longford told the Tribunal that almost all of her current employment income was expended on her household expenses, including rent, utilities and medical appointments. Ms Longford considered that her expenses were approximately $3,000 per month and her employment income and social security payments were only slightly higher than this amount.
While the Tribunal accepts that Ms Longford experienced personal difficulties during the relevant period in 2013 and 2014 and presently experiences some financial difficulties,[43] the Tribunal is not satisfied based on the evidence before it that Ms Longford’s circumstances are sufficiently ‘unusual, uncommon or exceptional’ so as to make her case markedly different from the ordinary run of cases and otherwise ‘special’ to make it desirable to waive the Total Debt. In relation to Ms Longford’s psychological condition which was assessed by an online tool administered by the Mind Spot Clinic, there was insufficient evidence before the Tribunal to suggest special circumstances may apply due to this condition because there was no detail regarding any ongoing treatment received by Ms Longford, who confirmed at the hearing that such treatment was not yet occurring. Ms Longford is currently repaying the Total Debt in fortnightly instalments from one of the two social security payments she receives from the Agency. Additionally, Ms Longford had the benefit of Youth Allowance payments to which she was not entitled during the relevant period and there is no injustice or unfairness in requiring her to repay the Total Debt. In the circumstances, and for the preceding reasons, the Tribunal finds that the Commonwealth is owed the Total Debt by Ms Longford and its recovery should not be waived pursuant to section 1237AAD of the Act.
[43] Exhibit R1, T17, pages 880-881; T18, pages 883-887.
CONCLUSION

For the above reasons, the Tribunal finds that during the relevant period of time between 31 January 2013 and 18 June 2014, Ms Longford accrued the Total Debt of $17,291.95 which is owing to the Commonwealth, noting that as at the date of the Tribunal hearing the amount of $14,300.15 was owing from the Total Debt. The Total Debt cannot be waived and it is not appropriate in the circumstances to provide a write-off to Ms Longford in relation to the Total Debt.
DECISION
The Tribunal affirms the decision under review pursuant to subsection 43(1)(a) of the AAT Act.

I certify that the preceding 66 (sixty-six) paragraphs are a true copy of the reasons for the decision herein of Member W Frost.

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Associate
Dated: 18 December 2020

Date of hearing: 2 December 2020

Applicant:

Solicitors for Respondent:

By telephone

Ms Alexandra Cornfield, Services Australia