Lyall and Secretary, Department of Social Services (Social services second review) - [2023] AATA 3356

Lyall and Secretary, Department of Social Services (Social services second review) [2023] AATA 3356 (17 October 2023)
ReviewNumber: 2022/2952, 2022/3365
Division:GENERAL DIVISION
File Number(s): 2022/2952
2022/3365

Re:Amii Lyall
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Senior Member K Millar
Date:17 October 2023
Place:Adelaide

The decision in 2022/2952 (“Debt 1”) to raise and recover a debt of $12,935.21 and a recovery fee of $1,293.50 for the period 16 July 2011 to 5 February 2014 is affirmed.
The decision in 2022/3365 (“Debt 2”) is set aside and substituted with decisions that:
· Ms Lyall has a debt of $5,433.28 for the period 26 November 2015 to 18 January 2017; and
· The amount of $2,214.30 of this debt is waived under s 1237AAD of the Social Security Act 1991 (Cth).

....................[Sgnd]........................
Senior Member K Millar
CATCHWORDS
SOCIAL SECURITY – parenting payment – whether applicant overpaid parenting payment – whether overpayments calculated correctly – s 1073B of the Social Security Act 1991 - whether overpayments are a debt due to the Commonwealth – whether debts should be waived – consideration of special circumstances - amount of debt waived – decision under review affirmed.
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth)
Social Security (Administration) Act 1999 (Cth)
Social Security Act 1991 (Cth)
Social Services and Other Legislation Amendment (Simplifying Income Reporting and Other Measures) Act 2020
CASES
Brian Lawlor Automotive Pty Ltd and Collector of Customs, New South Wales [1978] AATA 49
Judd and Secretary, Department of Social Services [2022] AATA 727
Prygodicz v Commonwealth of Australia (No 2) [2021] FCA 634
Read v Commonwealth [1988] HCA 26
Re Rosemarie Beadle and Director-General of Social Security [1984] AATA 176
Secretary, Department of Social Security v Hales [1998] FCA 219
Skinner v Secretary, Department of Social Services [2015] AATA 569
SECONDARY MATERIALS
Iain Anderson, Commonwealth Ombudsman, Lessons in Lawfulness: Own motion investigation into Services Australia’s and the Department of Social Services’ response to the question of the lawfulness of income apportionment before 7 December 2020 (August 2023)
REASONS FOR DECISION
17 October 2023
INTRODUCTION

Miss Lyall was granted parenting payment in 2008. In the time she has been receiving parenting payment, she has worked for a variety of employers.
As her income from employment affects her rate of parenting payment, and a delegate of the Secretary considered not all of Miss Lyall’s income had been correctly reported, two debts have been raised.
The amount of these debts has changed several times and Miss Lyall has sought review of the decision to raise and recover these debts because of the conflicting amounts, and because she claims to have noticed discrepancies in the data.
The issues to be decided are whether Miss Lyall was overpaid parenting payment, if so, are the overpayments correctly calculated, are they a debt due to the Commonwealth, and are there are grounds on which part or all of the debts should be waived.
Debt 1
The first debt (2022/2952) is a debt of $12,935.21 and a recovery fee of $1,293.50 for the period 16 July 2011 to 5 February 2014 (“Debt 1”).
The Secretary submits this debt resulted from the applicant commencing employment with Healthscope Limited (“Healthscope”) on 4 July 2011, but not declaring income from this employment. Her employment with Healthscope ceased on 10 February 2014.
A lesser amount of $12,742.43 was originally raised on 5 December 2014 and has been fully recovered.[1] An Authorised Review Officer affirmed this decision on 20 October 2020, and on first review in the Tribunal the Social Services and Child Support Division (“AAT1”) also affirmed the decision.
[1] Ex T1-T12, 2022/2952, T-Documents, p 7-10.
On 25 August 2022, after the decision to raise and recover the debt was affirmed by AAT1, the Secretary varied the decision under s 182 of the Social Security (Administration) Act 1999 (“Administration Act”). This decision increased the amount of Debt 1 from $12,742.43 to $12,935.21 and increased the recovery fee from $1,274.20 to $1,293.50.
Under s 182(2) of the Administration Act, AAT1 is taken to have varied the debt in the same way it was varied by the Secretary, and the decision under review is the decision as varied by the Secretary.
Debt 2
The second debt (2022/3365) is a debt of $5,433.28 for the period 26 November 2015 to 18 January 2017 (“Debt 2”). The Secretary submits this debt arises from Miss Lyall under-reporting income from her employment with Fullarton Retirement Living Choice (“Fullarton Retirement”) and Ranstad Techno Plus (“Ranstad”).
A debt of $5,414.36 was first raised on 6 May 2019. This debt was varied to $5,353.45 before it was reviewed by an Authorised Review Officer. On 28 April 2020, this decision was affirmed by an Authorised Review Officer. It was affirmed by AAT1 on 8 December 2020.
The Secretary has varied the amount to $5,438.80 for the same period under s 182 of the Administration Act. At the hearing, it was noted that the debt had decreased by $5.52, and the debt period had been backdated to 26 November 2015 to take into account an underpayment.
LEGISLATIVE FRAMEWORK
Under s 503 of the Social Security Act 1991 (“the Act”), a person’s rate of parenting payment for a person who is not a member of a couple, is calculated using the Pension PP (Single) Rate Calculator at the end of s 1068A of the Act.
The rate of PP (single) is a daily rate worked out by calculating an annual rate and dividing this by 364 (s 1068-A1 of the Act).
In issue in this matter is any reduction to the maximum payment rate that should be made after applying the ordinary income test. The ordinary income test is applied using Module E in s 1068A of the Act.
The method statement in s 1068A-E1 of the Act, requires the person’s ordinary income on a yearly basis to be calculated, then the ordinary income free area is calculated, and the two are compared to see if the ordinary income is more than the ordinary income free area. If the person’s ordinary income is more than the ordinary income free area, the reduction for ordinary income is calculated by reference to ss 1068A-E19 and 1068A-E20 of the Act. At that time, the excess ordinary income reduced the rate of pension by 40 cents in the dollar (s 1068A-E20 of the Act).
The provisions relating to employment income were substantially amended on 7 December 2020 when the Social Services and Other Legislation Amendment (Simplifying Income Reporting and Other Measures) Act 2020 came into effect. These changes occurred after both debt periods and does not apply to an amount of employment income before the commencement of these amendments.[2]
[2] Social Services and Other Legislation Amendment (Simplifying Income Reporting and Other Measures) Act 2020 Sched 1 [72(2)].
Section 1073B of the Act
The ordinary income test is affected by the provisions in Division 1 of Part 3.10 of the Act. In the periods of Debt 1 and Debt 2, section 1073B(1) of the Act stated:
(1) 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.
The term ‘instalment period’ is defined in s 23 of the Act as a period that is determined by the Secretary under s 43 of the Administration Act to be an instalment period of the person. Section 43 of the Administration Act states, among other things, that instalment periods are not to be more than 14 days.
A person can be taken to have earned, derived or received employment income that is averaged across a single instalment period, but cannot be averaged over more than one statement period.
As reported by the Commonwealth Ombudsman in Lessons in Lawfulness,[3] since at least 2003 Services Australia and its precursor the Department of Human Services was unlawfully apportioning income across two or more Centrelink instalment periods. This continued until 2020.
[3] Commonwealth-Ombudsman-public-statement-regarding-OMI-Income-Apportionment-Lawfulness.pdf.
Income is earned when the person completes a unit of work for which payment is due, and for casual workers this may be the hours or days worked. It is derived when the person has a present legal entitlement to the income.[4] Income is received when it is actually received or capable of being accessed by the person.
[4] Read v Commonwealth [1988] HCA 26.
Where a person has casual income from employment and earns more in one instalment period and less in another, this can result in different rates of payment in different instalment periods. Of considerable importance is identifying when the income was earned, derived or received as this will determine the instalment period to which income is attributed.
If income has been correctly attributed to a single instalment period, as it has in the recalculations in his case, the question then arises of whether it has been correctly attributed according to when it was earned, derived or received.
A different rate of payment can result if the day or days on which income is actually earned is used to calculate the rate. This is because if income is earned, for example, for three days in one week and four days the next week and these weeks fall in different Centrelink instalment periods, it potentially results in a higher rate in both instalment periods than if it is attributed in a single instalment period when the income was received.
As a result, an examination must first be made of when the income was earned, then when it was derived (if this is different to when it was earned) and then when it was received.
The Secretary submits that consistent with the decisions in Judd and Secretary, Department of Social Services,[5] where it cannot be determined from the available information on the day or days the income was earned, it is appropriate to use the dates on which the income was received or paid to the person.
[5] [2022] AATA 727.
As a different rate can result when casual income is earned on different days, the most accurate approach to calculating the rate is to use employment income earned on each day. This is the preferable approach to calculating a rate when a person has an unpredictable or variable income.
However, an overpayment can arise a considerable time after the person has earned the income. Under s 1234B of the Act, the Secretary may take action for the recovery of an overpayment or debt at any time. This may be after the time in which employers are required to keep records.
Good administrative practice calls for a determination of an overpayment at the earliest opportunity to allow the best evidence to be obtained of when the income was earned. Delay in taking action will lead to records no longer being available or the requirement to keep records having passed. The earliest opportunity is when the Secretary becomes aware that a person may have been overpaid. It calls for efforts to be made by the Secretary at that time, using the powers available in the Administration Act to require information, to press for information at that time on the specific days on which income was earned.
Whether it can be determined when the income was earned will turn on an assessment of all the information before the Tribunal, including the oral evidence of a party. In some circumstances, the Tribunal may be satisfied that a social security recipient’s recollection of their working hours is the best evidence of when income was earned. In others, the best available information will be when the income is derived or received as shown available from bank statements or payslips. This will turn on the facts of each case.
It is necessary to examine the efforts that have been made by the Secretary to identify specific days or hours worked to make a finding on the best information that is in fact available. This may involve a consideration of whether the Secretary has used the powers to obtain further information to identify when income was earned. If there are measures that could be taken by the Secretary to obtain information on when the income was earned, and the Secretary has not used the powers available in the legislation to obtain this information, it may be appropriate to remit the matter with a direction that the Secretary take further steps to obtain the information.
If this information cannot be obtained whether due to the passage of time or for some other reason, meaning must be given to the words “derived” and “received” in s 1073B of the Act. In these circumstances, the best information about the person’s income may be the date the income was derived or was received.
Working credits
Working credits apply to people receiving parenting payment (among other types of payment) where the person’s rate is calculated using the income test (s 1073D of the Act). Working credits operate to reduce a person’s ordinary income in calculating a rate (s1073G of the Act).
The provisions relating to working credits were amended in 2020. The legislation as it was before 2020 applies.
The accrual of working credits is governed by s 1073F of the Act. Working credits can be accrued, depleted or remain unchanged on each day in an instalment period.
As it applies in this case, where Miss Lyall’s only income is from employment, working credits are calculated for each day of an instalment period. Income earned, derived or received on a day is annualised by multiplying by 364 and then dividing by 26 for the person’s daily employment income for a day in the instalment period.
As it applies to a person whose only income is from employment, where this income is less than $48, working credits accrue at the rate of $48 less the person’s ordinary income. For example, if the person’s income is $0, their working credit balance increases by $48 per day. The maximum number of working credits is 1,000.
If the person earns income between $48 but less than their income free area, the working credits remain the same, and do not increase nor decrease.
If the person’s ordinary income for a day is more than their income free area, the working credits are depleted by the lesser of:
·     Their employment income on that day; and
·     The amount by which a daily rate of total income exceeds the income free area; or
·     The available working credit balance.
The amount by which the working credits are depleted reduces the person’s income on that day.
This means that if Miss Lyall has working credits, they are used each day that her income is more than the income free area to reduce her income until there are no credits remaining. She will accrue more working credits each time she earns less than $48.
Maintenance income
Maintenance income is excluded from the definition of ordinary income and does not apply in calculating the rate of parenting payment. While Miss Lyall raised various issues about her family tax benefit and child support, the decisions under review are about parenting payment and it is unnecessary to consider her maintenance income.
Miss Lyall can separately seek review of decisions made about her family tax benefit or child support assessment if she has not done so already.
Application of Prygodicz v Commonwealth of Australia (No 2) [2021] FCA 634 (“Prydogicz”)
On 11 June 2021, consent orders were made in Prygodicz. This is also known as the Robodebt case.
In this case, Justice Murphy made consent orders that include a declaration that: [6]
A decision that an applicant or group member owed the Commonwealth a debt under s 1223 of the Social Security Act 1991 (Cth), because the person had obtained the benefit of a social security payment to which they were not entitled, was not validly made where all of the following apply:
(a)the rate of the social security payment for the applicant or group member was dependent upon the person’s ordinary income on a fortnightly basis;
(b) the Commonwealth based its decision on an assumption (Assumption) that the person’s ordinary income for a fortnight (relevant fortnight) was greater than the amount of ordinary income that the person had reported to the Commonwealth for the relevant fortnight;
(c)the Commonwealth relied solely on PAYG employment income data from the Australian Taxation Office (ATO data) to make the Assumption and did not have evidence that the person was likely to have earned employment income at a constant fortnightly rate during a period covered by the ATO data, or other evidence to support the Assumption; and
(d) the Assumption was based on an assessment of the person’s employment income for the relevant fortnight derived from averaging the ATO data, for a longer period that included the relevant fortnight, as if the person had earned income at a constant rate during that period.
[6] Prygodicz v Commonwealth of Australia (No 2) [2021] FCA 634, at [12] and Annexure C.
This does not apply to Debt 1 as it did not originate from a data match with the Australian Taxation Office (“ATO”).
Debt 2 originated from a data match with the ATO.[7] All cases where data matching with the ATO has been used, without more, to impose a debt require close scrutiny to determine if the person was an applicant or group member and whether the decision was rendered invalid by the declaration.
[7] Ex T1-T15, 2022/3365, T11, p 100-106.
If at the time of the declaration the person met the conditions in Annexure C of the declaration, a decision declared invalid by the Federal Court cannot be made valid by obtaining new information to support a decision that a person owes a debt to the Commonwealth under s 1223 of the Act.
If a decision is rendered invalid by the orders in Prygodicz, and new information to support an overpayment is required, in many circumstances this will require the overpayment to be considered afresh. To do otherwise would deny group members the opportunity to have a debt recalculated on a proper basis and access to all the review processes specified in the Administration Act. The loss of a right of review of an original decision by an authorised review officer and by AAT1 should not be made lightly.
A decision to vary a decision that was not validly made cannot retrospectively make an original decision valid. However, this does not prevent review of an invalid decision by the Tribunal,[8] and whether it should do so will depend on the circumstances of the case.
[8] Brian Lawlor Automotive Pty Ltd and Collector of Customs, New South Wales [1978] AATA 49.
It is ultimately unnecessary to determine if Debt 2 should be considered afresh in this case, as Miss Lyall provided the payslips on which the debt was calculated on 9 December 2019. As information on pay details from Fullarton Retirement and Ranstad were obtained prior to the declaration in Prygodicz, the declaration does not apply as the condition in (c) of the declaration is not met.
CONSIDERATION OF THE DEBTS
DEBT 1
The Secretary submits that Debt 1 resulted from Miss Lyall starting work with Healthscope and failing to declare her income.
Healthscope advised Centrelink on 23 July 2014 that Miss Lyall started work on 4 July 2011. Pay details were provided by Healthscope for the period 27 June 2011 to 10 February 2014.

Her earnings for the period were over $48,000, and no earnings were used to assess her rate of parenting payment, and as a result Miss Lyall has been overpaid parenting payment.
Working credits
Miss Lyall submitted that her working credits should have started at the maximum at the start of the debt period for Debt 1. The amended MultiCal calculations[9] provided by the Secretary show that Miss Lyall started with an opening balance of 1000, which was reduced to zero between 30 June 2011 and 19 July 2011.
[9] Ex RA.
The Tribunal is satisfied that Miss Lyall’s working credits started at the maximum and have been correctly applied to reduce her income until the working credits were exhausted.
Has the overpayment been correctly calculated?
The Secretary submits that following recalculation and variation, the amount of the overpayment is $12,935.21.
Healthscope was required to provide information on Miss Lyall’s employment to Centrelink. Healthscope provided pay details for the period 27 June 2011 to 10 February 2014.[10]
[10] Ex T1-T12, 2022/2952, T8, p 83-89.
Information on the payments made to Miss Lyall was originally sought in 2014, and a response from Healthscope dated 23 July 2014 was provided.[11]
[11] Ex T1-T12, 2022/2952, T8, p 80-89.
What was not included in the original information before the Tribunal was information on the efforts made to obtain details of when the income was actually earned. It transpired that a notice had been issued to Healthscope on 17 May 2022 under s 196 of the Administration Act.[12] This requested documents for the period 1 July 2011 to 30 March 2014 showing:
·     The dates Miss Lyall worked in each pay period;
·     The hours worked by Miss Lyall on each of those dates; and
·     The rate of pay per hour applicable.
[12] Respondent’s Supplementary Bundle, p 7.
In response, Healthscope provided a list of payments including a description of the type of payment, the start and end date, the hours, the hourly rate and the total amount.[13] Healthscope was asked if they had a roster, or other information that makes it clear which days were worked by Miss Lyall, and was advised they did not.[14] These amounts have been entered into a worksheet[15] which shows each of the payment entries.
[13] Respondent’s Supplementary Bundle, p 47-50.
[14] Respondent’s Supplementary Bundle, p 51.
[15] Ex RA, p 21-27.
The amounts that appear on each date within an instalment period are then added for each Centrelink instalment period. The total in each instalment period is then entered in the Multical entitlement calculations.[16]
[16] Ex RA, p 3-17.
The information provided by Healthscope includes a mix of aggregated ordinary income for a period of up to 14 days and information about income on specific days. Sick leave, annual leave, and unpaid leave are identified on the specific day on which they occurred.
In calculating the debt, the last day in the period is taken as the day the payment was received. For annual leave and sick leave taken on specific days, the day this occurred is counted, whereas for ordinary hours the last day in the period in which the ordinary hours were earned is taken as the day the payment was received. This method is a mix of the day it was earned, and an inference about when it was derived or received.
The Tribunal is satisfied that the Secretary has used the powers to seek further and better information from Healthscope, but information on when the amounts were earned is not available. While information was sought from Healthscope in 2014, and again sought in 2022, the information provided did not include the dates on which Miss Lyall worked, and states her employment was “casual to contracted hours” with no specific hours per week.
The dates on which she worked was not sought until 2022, and Miss Lyall questioned why this was not investigated further when the debt was first raised, rather than 8 years later. There is considerable force in her submission, and the Tribunal emphasises the need to seek this information when an overpayment is first identified. However, in this case it does not improve the information before the Tribunal. Requiring the Secretary to seek more information now will not provide the days or dates on which the income was earned.
The information in the pay records provide by Healthscope is the best available information of the amounts which Miss Lyall was paid. The pay records from Healthscope have been entered into an earnings screen as part of a business integrity review,[17] and no errors have been identified in the entry of the pay records.
[17] Ex T1-T12, 2022/2952, T10, p 118-119.
The income received from Healthscope was then allocated to the Centrelink instalment period in which it was paid. More than one payment may be made in a single Centrelink instalment period. No errors have been identified in the allocation of income to the Centrelink instalment period, and income has been correctly allocated to a single instalment period in which it was derived.
The Multical calculations include the verified earnings in that Centrelink instalment period.[18] This provides a calculation of the correct rate of Miss Lyall’s parenting payment.
[18] Ex RA, p 3-10.
There are some income amounts that appear more than once in the Multical calculations. This occurs where there are changes to other components used to calculate Miss Lyall’s rate, for example a reduction in working credits or a change to the amount of income Mis Lyall can earn before her rate is affected. While Miss Lyall expressed concern about the repeated numbers, this is explained by these changes to other components in the rate calculation.
The correct rate as calculated in the Multical tool is then compared with the amount that was paid to Miss Lyall in a debt period.[19] This resulted in a debt of $12,935.21.
[19] Ex RA, p 11-17.
As the income components have been correctly entered, and the working credits correctly applied, the overpayment has been correctly calculated.
Is this a debt to the Commonwealth?
If an amount is paid by way of a social security payment, the amount is a debt due to the Commonwealth only to the extent that the Act expressly provides that it is (s 1222A of the Act).
Under s 1228 of the Act, if an amount of pension has been paid to a person that should have not been paid, the amount is an overpayment and is recoverable by the Commonwealth.
If a social security payment is made and the person was not entitled for any reason to the payment, the payment is a debt due to the Commonwealth (s 1223(1) of the Act).
The Tribunal is satisfied the overpayment in Debt 1 is a debt due to the Commonwealth.
Recovery fee for Debt 1
Section 1228B(1)(c) of the Act imposes as 10% penalty for debts due to the Commonwealth if the debt arose wholly or partly because the person had:
(i)refused or failed to provide information in relation to the person's income from personal exertion; or
(ii) knowingly or recklessly provided false or misleading information in relation to the person's income from personal exertion;
when required, under a provision of the socialsecurity law, to provide information in relation to the person's income from personal exertion.
Miss Lyall states she did advise Centrelink that she had started work at Healthscope. She points to the lack of information in her Centrelink file before 16 September 2011, and says she advised Centrelink of her employment with Healthscope when she signed a contact with Healthscope on 4 July 2011. She claims to have reported her earnings every fortnight. She did not check her parenting payment statements as she had faith she was being paid correctly.
The Centrelink record of a discussion with Miss Lyall on 9 December 2011 states “Customer said she did some training but never started work.”[20] It was stated an earning worksheet was sent, and an earnings worksheet was sent to her the same day.[21] Miss Lyall states it is false to say she reported she had done some training but did not start work.
[20] Ex T1-T12, 2022/2952, T10, p 141.
[21] Ex T1-T12, 2022/2952, T11, p 378.
It does not appear that a response was sent to this earnings sheet, and a debt was not raised until 5 December 2014.
On 4 December 2014, a record of contact with Miss Lyall states that when she was advised that she had not reported income she:
… apologised for this and said she had issues with her ex at the time and he hasn’t paid child support and only started paying in Nov 2013. LYALL said she was having a tough time and when she got the job in 2011 she was contacted by CLK and was advised to declare her income online. LYALL said she had issues with this and did not have an internet connection … LYALL said that at the time she knew that she could leave it until the end of the financial year and just pay any debt back.[22]
[22] Ex T1-T12, 2022/2952, T10, p 177.
Miss Lyall said this was not true, as her ex-husband had always paid child support and provided information to show that she was paid child support. She also said that because only her surname appears, this could be anyone. Neither argument convinces the Tribunal that what she said at that time was not recorded accurately, or that this note is not in relation to her, or that she did not knowingly fail to comply with her obligation to report income.
In seeking review of the decision to raise and recover the debt on 9 September 2020, Centrelink reports Miss Lyall said she sought a review because “I had to return to work and I was never on benefits before. I didn’t realise there was a requirement to report earnings, and my income was quite low.”[23]
[23] Ex T1-T12, 2022/2952, T10, p 193.
Miss Lyall denies that she said this, and states it does not make sense as she reported income from employment in 2004 and 2008. She points to the lack of records of any contact she had with Centrelink from 4 July 2011 to 16 July 2011.
From the information on the Centrelink file, Miss Lyall failed to provide information about her income, both according to what she told Centrelink in 2020 and in the lack of response to the earnings sheet sent to her on 9 December 2011.
As she has failed to provide information on her income from personal exertion, a 10% penalty of $1,293.50 applies.
DEBT 2
Debt 2 is an amount of $5,433.28 submitted to have resulted from Miss Lyall under-reporting her income form Fullarton Retirement and Ranstad. Miss Lyall was employed by each employer on a casual basis.
Miss Lyall provided payslips from Fullarton Retirement showing the date she was paid.[24] Her employment with Fullarton Retirement was terminated on 15 November 2016.[25] Ranstad payslips also show the pay date.[26] Neither have the days on which the income was earned.
[24] Ex T1-T15, 2022/3365, T8, p 81-89, p 96-97.
[25] Ex T1-T15, 2022/3365, T8, p 80.
[26] Ex T1-T15, 2022/3365, T9, p 90-95.
Miss Lyall did report income in the period of Debt 2, and the Secretary points to entries in a table to show what the amount of income reported. The Tribunal requested source information to show the amounts Miss Lyall declared in the period of Debt 2. It was stated that the earnings recorded in the Centrelink database were either entered manually by a Customer Service Officer or automatically when the person reports income online, and that there are no other source documents that record income reported by the applicant.
The reported earnings and the earnings entered are stated to appear in the EANS screen, with the column “verified” reporting “NVE” or non-verified earnings reported by Miss Lyall, and “BIR” representing data entered later by business integrity review reported earnings on the payslips.
A person who has been overpaid a Centrelink payment should be able to see from information provided by Centrelink how a debt has been calculated to meaningfully respond to the case against them, and in this case, this was that Miss Lyall had not accurately reported her income. This should be explained in a comprehensible way at the first opportunity so that a person can respond to or dispute the amounts entered.
However, on the information available to the Tribunal, Miss Lyall under-reported her income from Fullarton Retirement and Ranstad, and she has been overpaid parenting payment in the period of Debt 2.
Has the overpayment been correctly calculated?
Again, what was not included in the original information before the Tribunal was information on efforts made to obtain details of when income from casual employment was actually earned. Notices were issued to Fullarton Retirement[27] and Ranstad.[28] These notices requested documents for the period 21 October 2015 to 9 November 2016 and 12 December 2016 to 22 January 2017 respectively showing:
·     The dates Miss Lyall worked in each pay period
·     The hours worked by Miss Lyall on each of those dates; and
·     The rate of pay per hour applicable.
[27] Respondent’s Supplementary Bundle, p 2-3.
[28] Respondent’s Supplementary Bundle, p 4-6.
Fullarton Retirement provided payslips for the period 1 October 2015 to 16 November 2016.[29] The payslips include the date on which Miss Lyall was paid. A further request for rosters or information to make it clear which days Miss Lyall worked was made, however Fullarton Retirement advised they do not have this information, and it may have been kept on old laptops the village managers used at that time.
[29] Respondent’s Supplementary Bundle, p 18- 45.
Ranstad advised that it was unable to find Miss Lyall on the Ranstad database. It is stated this may be because they updated their system in 2016, or because of case sensitive data, or due to Miss Lyall’s profile being deactivated.
Determining whether sufficient measures have been taken to obtain information on when the income was earned will vary in each case. In relation to Debt 2, the Secretary has issued statutory notices to require the information, however the relevant employers have been unable to provide the information. Unless Miss Lyall kept records of the dates on which she worked, or could recall a particular pattern, the best available information is contained in the payslips.
The Tribunal is satisfied that information on the dates on which income was earned has been requested, and that in the absence of this information the payslips contain the best available information.
Information from the payslips has been entered into a verified earnings worksheet at Exhibit RA for Fullarton Retirement,[30] and Ranstad.[31] The totals match the amounts on the payslips and have been correctly assigned to a single Centrelink instalment period. The amounts for the Centrelink instalment period have been entered into the Multical entitlement calculations which shows the application of working credits.[32]
[30] Ex RA, p 39.
[31] Ex RA, p 40.
[32] Ex RA, p 30-34.
The debt report showed an underpayment for the period 26 November 2015 to 9 December 2015, and this period has been included to offset the underpayment of $5.52.
On the information available to it, the Tribunal is satisfied the overpayment is correctly calculated.
The overpayment of $5,433.28 is a debt due to the Commonwealth under s 1223 of the Act.
Is there any reason to waive recovery of part or all of the debts?
There are three ways in which a debt may to be recovered that could apply in this case; write off of the debt, waiver due to administrative error and waiver in special circumstances.
(i)Write off
Under s 1236 of the Act, the Secretary may write off a debt for a stated period or otherwise if it is irrecoverable at law, the debtor has no capacity to repay, the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor, and it is not cost effective for the Commonwealth to recover the debt. If a debt can be recovered from a person’s social security or family tax benefit payment, under s 1236(1C) of the Act, the person is taken to have a capacity to repay the debt unless this would result in severe financial hardship.
Debt 1 has been recovered, and Debt 2 may be recovered from Miss Lyall’s social security or family tax benefit payments. The debts cannot be written off under s 1236 of the Act.
(ii)Administrative error
The Secretary must waive the right to recover the proportion of the debt attributable solely to an administrative error of the Commonwealth if the debtor received that proportion of the debt in good faith (s 1237A of the Act).
In this case, Debt 1 resulted from Miss Lyall failing to report her income and Debt 2 resulted from Miss Lyall under-reporting her income and neither debt is solely due to administrative error.
(iii)Special circumstances
The Secretary may waive the right to recover part or all of the debt under s 1237AAD of the Act if:
(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.
Did Miss Lyall knowingly fail to comply with the social security legislation?
A person may fail to comply with a provision of the Act if they fail to give information required by the Secretary under a notice issued under s 68 of the Administration Act. Section 68 of the Administration Act requires a person who is receiving a social security payment to provide information the Department if a specified event or change of circumstances occurs.
Section 72 of the Administration Act contains the requirements for a notice. A notice:
·     may be given by post,
·     must specify how the person is to give the information,
·     the period within which they are required to give the information, and
·     must specify it is an information notice given under social security law.
Miss Lyall was provided information notices issued under s 68 of the Administration Act requiring her to tell Centrelink if she started work, including a notice dated 18 May 2011, before the start of the debt period.[33] Further notices requiring her to tell Centrelink if she started work were provided in the debt period. Notices issued during the period of Debt 1 advising Miss Lyall about the calculation of her payment do not include any earnings.[34]
[33] Ex T1-T12, 2022/2952, T11, p 316.
[34] Ex T1-T12, 2022/2952, T11, p 404.
Miss Lyall said she did not read letters from Centrelink and ripped them up because she thought she did not need them as she had faith in the system. Miss Lyall said she knew reporting income was a requirement for parenting payment, as she had reported income in the past. She said she suspects that she was reporting as otherwise the debt would have been raised earlier.
The Tribunal does not accept Miss Lyall’s claim that her responses were falsely recorded by officers of Centrelink on more than one occasion, and finds she knowingly failed to comply with an information notice in relation to Debt 1. As she knowingly failed to comply with a provision of the Act, the debt cannot be partly or wholly waived under s 1237AAD of the Act.
In relation to Debt 2, Miss Lyall did report her income, however it was under-reported. Miss Lyall said she thought her income was correctly reported, but the pay periods did not align. She did not look at the letters she received from Centrelink or check that the amount recorded was accurate.
The Secretary was asked to provide source information to show what Miss Lyall did report. In response, the Secretary advised that income reported by Miss Lyall was entered manually by a Customer Service Officer or automatically following Miss Lyall reporting her earnings on-line, and there are no source documents.
As Miss Lyall was reporting her income, and her income was casual income which was paid in different periods to the Centrelink instalment period, it is inferred in her favour that she did not knowingly fail to report income.
Are there special circumstances that make it desirable that all or part of Debt 2 should be waived?

In general, those who have received public monies to which they are not entitled are required to repay unless repayment in the specific circumstances is unjust, unreasonable or inappropriate.[35]
[35] Skinner v Secretary, Department of Social Services [2015] AATA 569 at [48].
The term ’special circumstances’ has been considered on several occasions, and generally commences with consideration of Re Rosemarie Beadle and Director-General of Social Security,[36] which states it is not possible to lay down precise limits or rules about what amounts to special circumstances. The purpose of this provision was stated in Secretary, Department of Social Security v Hales,[37] to allow a flexible response to the wide array of situations which could give rise to hardship or unfairness in the event of a rigid application of the requirement to recover a debt.
[36] [1984] AATA 176 at [12].
[37] [1998] FCA 219.
Miss Lyall has five children, four of whom are living with her.
In 2011 Miss Lyall had three children and was a single parent. She moved from Darwin to Adelaide because she could not find anywhere to live in Darwin. She lived with family for a few months before moving out of her parent’s house and starting a medical receptionist course before obtaining work with Healthscope.
Miss Lyall now has four children living with her, and one son who is now 22 and lives in Darwin. She said she had to ask her eldest son to move out in 2018 because he was punching holes in the walls. She did not have to call the police, but she said it did influence his younger brother and she has had to call the police to assist with her second son.
Her second son has broken pots the owner had at the property and has broken window frames, locks and the roller door as he was breaking into the house because she would not let him in. She does not have quotes for repairs because she cannot afford it. She says she is too scared to tell the landlord because she does not want to lose the house.
Her son J was born before she started at Healthscope and contracted spinal meningitis as a baby and was in hospital for some time. He needs ongoing care and has glasses.
Her daughter LA was born in 2018 and Miss Lyall says she has been diagnosed with global developmental delay. At four years of age, Miss Lyall said her daughter is non-verbal and is unable to dress or toilet and requires high intense care. Miss Lyall is currently receiving carer payment and carer allowance.
Her youngest child, LB, was born in 2021, and Miss Lyall said she is spending time addressing Centrelink rather than with her baby.
Miss Lyall said if she resumes paying the debt it will cause her hardship. Her rent increased by $100 per week in May because her lease expired, and she is paying approximately half of her income in rent. She said she has lost a large amount of weight and has been struggling. She cannot sleep, and she has exhausted the help she can receive from her parents. She has an outstanding electricity account from 2018 of approximately $5,000 and has had her electricity cut off in the past. She has not worked since she left Ranstad.
Miss Lyall said she took $10,000 out of her superannuation on hardship grounds in 2022 but that was added to her taxable income, so Centrelink took her tax refund. Due to other debts she has with Centrelink, she said she had $1,300 taken off her out of her bank account. She withdrew remaining funds to pay bills and get clothes for her children. She said they do not have much furniture as she has had to sell furniture to pay for food.
Miss Lyall has four children living at home, and one child has been diagnosed with global developmental delay. She says that 50% of her income is expended on rent and she has difficulty meeting the costs of electricity and food. She says she had damage to her property due to the behaviour of one of her children which she cannot afford to repair. Decisions that affect Miss Lyall also affect her children and the stability of their housing, and the ability to pay for electricity and food. The care of four children in the household, one of whom has special needs, in the context of unstable housing and a difficulty of meeting daily living costs creates special circumstances that make it desirable to waive part of the debt.
Miss Lyall has repaid most of the debt, and the current balance of the debt is $2,214.30. In considering waiver of this amount, the Tribunal must first consider whether it is more appropriate to waive than to write off this amount. As the debt could be recovered from Miss Lyall’s social security payments, it is not appropriate to write off the debt.
Special circumstances exist to waive $2,214.30 of the debt.
OTHER MATTERS
Miss Lyall is understandably concerned about the different calculations that have been made of the debt, and that the figures used in the debt calculations change. Previous debt calculations provided by Centrelink were superseded by later calculations. The most recent calculations relied on by the Secretary,[38] and which were provided to Miss Lyall before the hearing, are the calculations that have been used in varying the amount of the debt.
[38] Ex RB.
Miss Lyall contends there are errors in the calculation as parenting payment is included in her taxable income on Centrelink PAYG payment summaries, and no amounts are listed as tax exempt. This is because parenting payment is taxable, and this does not have any bearing on the calculation of the debt. Miss Lyall also raises amendments to her taxable income. As the debts as they were calculated before the hearing are based on payslip information and not information from her tax returns, amendments to her taxable income will not have an effect on the debts.
Miss Lyall claims that the documents and letters on her Centrelink record have been tampered with and there is false evidence on her records. While the documents are not readily understood and the calculations have changed on several occasions which make the documents confusing and difficult to interpret, I do not accept they have been tampered with or that false evidence has been provided.
Miss Lyall notes there are two entities with her name in the Centrelink documents which are linked. The results from her middle name being used in one entity. This does not, as Miss Lyall claims, suggest there are two different people with the same name contained in her record.
DECISION
The decision in 2022/2952 (“Debt 1”) to raise and recover a debt of $12,935.21 and a recovery fee of $1,293.50 for the period 16 July 2011 to 5 February 2014 is affirmed.
The decision in 2022/3365 (“Debt 2”) is set aside and substituted with decisions that:
· Ms Lyall has a debt of $5,433.28 for the period 26 November 2015 to 18 January 2017; and
· The amount of $2,214.30 is waived under s 1237AAD of the Social Security Act 1991 (Cth).

1.       I certify that the preceding one-hundred-and-thirty-six (136) paragraphs are a true copy of the reasons for the decision of Senior Member K Millar

.....................[Sgnd].........................


Legal Associate
Dated: 17 October 2023
Date of Hearing:   30 March 2023 & 11 August 2023

2.       Advocate for the Applicant:

3.       Self-represented

4.       Representative for the Respondent:

5.       Mr Sheedy

6.       Sparke Helmore