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

[2022] AATA 1162

Lynch and Secretary, Department of Social Services (Social services second review) [2022] AATA 1162 (13 May 2022)

Division:GENERAL DIVISION

File Number(s):      2021/4056

Re:Trevor Lynch

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Member P Ranson

Date:13 May 2022

Place:Brisbane

The Tribunal sets aside the decision under review and remits it with the direction that the debt for overpaid carer payment is $40,790.51 less the amount of any other social security benefits and allowances to which Mr Lynch was entitled during the Relevant Period.

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

Member P Ranson

Catchwords

SOCIAL SERVICES – debt – overpayment of carer payment – waiver – write off – notional entitlement – constant care – where applicant updated agency – good faith – special circumstances – unusual and uncommon circumstances – decision set aside and remitted

Legislation

Social Security Act 1991 (Cth)

Social Security (Administration) Act 1999 (Cth)

Cases

Beadle and Director-General of Social Security (1984) 6 ALD 1
Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
FCT v Cassaniti [2018] FCAFC 212
Imperial Bottleshops Pty Ltd v Commissioner of Taxation (1991) 22 ATR 148
Oberhardt v Secretary, Department of Education, Employment and Workplace Relations [2008] FCA 1923

SDEETYA v Prince [1997] FCA 1565

Secondary Materials

Guides to Social Policy Law Social Security Guide Version 1.293 - Released 9 May 2022

REASONS FOR DECISION

Member P Ranson

13 May 2022

BACKGROUND

1. Mr Trevor Lynch (Mr Lynch) and his mother have for many years provided care to his ex-wife, Ms Karen Smith (Ms Smith) who suffers from severe bipolar disorder. Mr Lynch and Ms Smith have three children including a son (the Son), who has autism. In 2017, Mr Lynch became partnered to Ms Olga Plotnikova (Ms Plotnikova) and they remain a couple today.

2. Social security benefits are provided to eligible persons by Services Australia (the Agency) including carer payment and carer allowance. In 2013, Mr Lynch began receiving first carer allowance and then also carer payment for Ms Smith and in 2015 he also began receiving carer allowance for the Son.

3. Initially and for some time, Mr Lynch provided constant care to Ms Smith however by 2018 the level of care had reduced as Ms Smith was being transitioned to independent living. His care of the Son did not diminish. To improve his employment prospects, Mr Lynch began and completed a dual diploma at a local TAFE college, which he completed at the end of 2019. That limited his time to provide care to Ms Smith to 2 to 3 hours per day on average and some of the care was provided by Ms Plotnikova when Mr Lynch was not available.

4. Realising the level of care for Ms Smith had reduced, Mr Lynch contacted the Agency in early 2018 and advised he was then only providing 50% care to her. Around that time, he also advised separately of his new address and that he had partnered Ms Plotnikova. He was asked to complete certain forms, which he failed to do. Nonetheless his carer payment increased, which he says he did not notice even though he also says he was expecting the amount of the payment to reduce commensurate with the reduced level of care.

5. To receive carer payment, constant care must be provided. There is no part carer payment commensurate with the level of care provided. Eventually the error of his overpayments came to the attention of Centrelink when he was selected for a review and he was asked to complete and return more forms, which he did. Once the information was examined, Mr Lynch’s carer payment was cancelled and a debt of almost $41,000 was raised by the Agency for the period from 1 February 2018 to 16 July 2019. Some payments have been made and the debt now stands at just over $39,000. Mr Lynch maintains he advised the Agency on a timely basis and accepted the payments from them in good faith. The Agency disagrees.

6. Mr Lynch requested a review of the decision to raise the debt to no avail. He then applied to this Tribunal for a review of that decision, also to no avail. He has now applied for a second review of the decision on the basis he did not understand affirmed meant the decision he was appealing stood and because he felt the decision maker did not properly take his circumstances or arguments into account. For the following reasons, and despite the efforts of Mr Lynch to comply with the disclosure requirements, the decision must again be affirmed. However, there are other benefits and allowances Mr Lynch may have been entitled to during the period when he wrongly received carer payment. The value of those notional entitlements reduces the debt otherwise payable.

   PROCEDURAL HISTORY

7. The parties in this case are:

Applicant	Mr Trevor Lynch (Mr Lynch)
Respondent	Secretary, Department of Social Services (the Secretary)

1. On 23 April 2021, the Social Services and Child Support Division of the Administrative Appeals Tribunal (AAT1) affirmed a decision of an Authorised Review Officer (ARO), to raise and recover a carer payment debt of $40,790.51 (the Debt) against Mr Lynch for the period 1 February 2018 to 16 July 2019 (the Relevant Period).

2. The issues identified by the Registrar to be decided are as follows:[1]

   (a)whether Mr Lynch has a carer payment debt of $40,790.51 for the period 1 February 2018 to 16 July 2019, and if so;

   (b)whether the debt should be recovered in part or in full.

   [1] Exhibit 2, Respondent’s statement of facts, issues and contentions dated 17 December 2022, (‘SFIC’), paragraph 2.1.

3. Prior to the Hearing, all parties were provided with an Exhibit List showing Exhibits 1 to 4. Exhibit 5 was received after the Hearing. The following documents were admitted into evidence:

Number	Description
Exhibit 1	T Documents.
Exhibit 2	Secretary’s Statement of Facts, Issues and Contentions dated 17 December 2021.
Exhibit 3	Audio file of recorded phone call dated 8 June 2018 between Mr Lynch and the Department.
Exhibit 4	Audio file of recorded phone call dated 10 May 2019 between Mr Lynch and the Department.
Exhibit 5	Post-hearing submissions by Mr Lynch and the reply to them by the Secretary.

1. The Tribunal has considered all the material supplied to it and the oral evidence of Mr Lynch at the Hearing. Not all the evidence is referred to at length, or at all, in this decision record. That does not mean it has not been considered in determining the outcome. It is sometimes unnecessary to canvass all aspects, arguments, and history of a case in the decision record.

   THE LAW

2. The Registrar’s Statement of Facts, Issues, and Contentions dated 17 December 2021 (SFIC) sets out in detail the law which is relevant to this case with which the Tribunal concurs. As a copy of the SFIC and its attachments were provided to Mr Lynch prior to the Hearing that law will not be reproduced in detail in this decision other than to confirm the relevant legislation is contained in the Social Security Act 1991 (Cth) (the Act) and the Social Security (Administration) Act 1999 (Cth) (the Administration Act).

3. The Registrar’s SFIC also refers to the Social Security Guide[2] (the Guide). The Tribunal notes where a general policy exists to guide the decision maker in exercising its powers, the Tribunal:

   “will ordinarily apply that policy in reviewing the decision, unless the policy is unlawful or unless its application tends to produce an unjust decision … cogent reasons will have to be shown against its application”.[3]

   [2] Guides to Social Policy Law Social Security Guide Version 1.293 - Released 9 May 2022

   [3]  Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634, 645 (Brennan J).

4. The Tribunal considers there are no pressing reasons to depart from the policy outlined in the Guide. However, to the extent the Tribunal has considered policy in this case, it has not applied it inflexibly and has only considered it to the extent the Guide is consistent with the requirements as set out in the legislation as it would be an error of law for the Tribunal to state it must (emphasis added) follow what policy says concerning the scope or meaning of a provision in the Act or Regulations.

5. As mentioned above, to qualify for carer payment, constant care must be provided. Qualification for carer payment is set out in section 198 of the Act. In Mr Lynch’s case, he was providing care for a disabled adult (Ms Smith) and the Son. Section 198 says:

   Qualification—disabled adult or disabled adult and dependent child

   (1)       A person is qualified for a carer payment if the requirements of this section are met.

   Note: Sections 198AA, 198AB and 198AC allow the person to qualify in certain short-term circumstances where the requirements would not be met

   Constant care for disabled adult or disabled adult and a dependent child

   (2)       The person must personally provide constant care for:

   a.  either:

   (i)if the person is the only person providing the constant care - a disabled adult (the care receiver) who has been assessed and rated under the Adult Disability Assessment Tool and given a score under that assessment tool of at least 25, being a score calculated on the basis of a total professional questionnaire score of at least 10; or …

   (ii)if not – a disabled adult (the care receiver) who has been assessed and rated under the Adult Disability Assessment Tool and given a score under that assessment tool of at least 80, being a score calculated on the basis of a total professional questionnaire score of at least 32; or

   d.a disabled adult and a dependent child of the adult (the care receivers), where:

   (i)the disabled adult has been assessed and rated under the Adult Disability Assessment Tool and given a score under that assessment tool of at least 20, being a score calculated on the basis of a total professional questionnaire score of at least 8; and

   (ii)the child is aged under 16; and

   (iii)if the child is aged 6 or more – carer allowance is payable for the child; and

   (iv)section 197D does not apply in respect of the care receivers.

   Note: In a paragraph (d) case, subsection (9) deems certain supervision to constitute care.

   Care in home

   (3)       The care must be provided in a private residence that is the home of the care receiver or care receivers.

   …

   Deemed personal care of disabled adult and dependent child

   (9)       For the purposes of paragraph 2(d) and other references in this Part that relate to that paragraph, if a disabled adult is providing care of a dependent child of the adult at a particular time and another person is supervising the provision of that care at that time, the other person is taken personally to provide care of the adult and child at that time.

6. Unfortunately, the term ‘constant care’ is not defined in the Act. In the absence of a definition in the Act, the words ‘constant care’ carry their ordinary meaning. In this context, constant means continuing without intermission, regularly recurrent, continual or persistent, and care means serious attention or protection.[4] The Guide also provides some assistance at 1.1.C310:

   ‘A carer is said to provide constant care if they personally provide care on a daily basis for a ‘significant period’ during each day. The care may be active, supervisory or monitoring. To provide care on a daily basis for a significant period, a carer should reasonably be expected to provide at least the equivalent of a normal working day in personal care, as the policy intent of providing CP [care provider] is to recognise that the carer is not able to undertake substantial employment because of their caring responsibilities. This includes circumstances where the carer or care receiver are absent from the care situation for part of the day, but the intensity of the care required and provided during the remainder of any 24-hour period is such that it roughly equates to a normal working day.’

   [4] Oxford English Dictionary.

7. The SFIC sights various cases before this Tribunal which support the premise of the Guide. In short, to be constant the care should be provided daily, and equivalent to a normal working week of 38 hours. That said, it is also important to recognise ‘the care may be active, supervisory or monitoring’ implying the care does not necessarily have to be always provided on site.

   Waiver of debt arising from error

8. Under s 1237A(1) of the Act, the Secretary must waive the right to recover the proportion of a debt 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.

   Waiver in special circumstances

9. Under s 1237AAD of the Act, the Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied 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 Act, the Administration Act or previous versions of the Act, and there are special circumstances (other than financial hardship alone) that make it desirable to waive and it is more appropriate to waive than to write off the debt or part of the debt.

   THE FACTS AND EVIDENCE

   Oral evidence

10. The Tribunal approaches oral evidence understanding the following principles apply:

    (a)Facts may be found based on oral evidence alone. There is no barrier to a fact being found on the uncorroborated evidence of a party to proceedings. There is no requirement that direct evidence by oral testimony or affidavit may only be accepted if corroborated. However, self-serving statements should be closely scrutinised.

    (b)Evidence of a party is not to be regarded as prima facie unacceptable. While it will often be prudent to put forward corroborating evidence, parties are not obliged to call all material witnesses or produce all material documents.[5]

    [5] For this and the preceding proposition, see, for example: Imperial Bottleshops Pty Ltd v Commissioner of Taxation (1991) 22 ATR 148, 155; and FCT v Cassaniti [2018] FCAFC 212.

    What went wrong?

11. Mr Lynch had been receiving carer allowance and carer payment for Ms Smith and the Son since 2013 and 2015. As the debt arises for the period 1 February 2018 to 16 July 2019, the Tribunal will look at events during that period.

12. On 1 February 2018, Mr Lynch contacted the Agency to advise he was only providing 50% care to Ms Smith who he said was transitioning to independent living.[6] The file note of the call says:

    ‘__recipient attended to advise that he is now only providing approximately 50% care to Karen Smith as she is being transitioned to independent living.__She is being reviewed to see how she goes.__There are no changes to care for [the Son].__Please assess and advise recipient.__’

    [6] Exhibit 1, T Documents T45, page 312.

13. Mr Lynch had been requested to complete and return a form MOD P to provide details of his partner, Ms Plotnikova. Mr Lynch was usually prompt at advising the Agency of changes, so it is a surprise he failed to complete and return the form when requested. A year later, on 8 April 2019, Mr Lynch was again requested to complete and return the MOD P form this time accompanied with the warning his carer payment may be rejected or cancelled if he failed this time to do so.[7]

    [7] Ibid, T46, page 319.

14. Then on 7 February 2018, the Agency issued a payment notice to Mr Lynch setting out his entitlement to carer payment of $705.55, inclusive of supplements and rent assistance, for the period from 31 January 2018 to 13 February 2018. Importantly, the back of that letter contained the reminder for Mr Lynch to advise the Agency within 14 days (section 68(2) of the Act notice):

    ‘If you no longer provide care for this person, they no longer require care on a daily basis for a significant period, either temporary or permanent or no longer would be considered to have a disability as their health has improved or if they pass away.’ [8]

    [8]  Exhibit 1, T Documents, T24, page 138 and 139.

15. Given Mr Lynch called on 1 February 2018 to advise his care of Ms Smith had reduced to 50%, with no change to the care for the Son, and to request his entitlements be reassessed, see [‎22], it was reasonable for him to assume the contents of the letter of 7 February 2018 were based on that advice, and he had provided the requisite notice, see [‎23]. According to the SFIC, notices such the one referred to above were regularly issued to Mr Lynch from 2013 to 2018 when he was receiving carer payment.[9]

    [9]  Ibid T6, T9, T12, T14, T16, T19, T21, T23, T24, T25 and T26.

16. On 8 March 2018 the Agency wrote to Mr Lynch advising his rate of payment was going down from 12 April 2018.[10] Then on 10 March 2018 the Agency again wrote to Mr Lynch to advise his rate of payment was going up from 12 April 2018.[11] By now, more than one month had passed since Mr Lynch had advised he was only providing 50% care for Ms Smith. The table in the SFIC at paragraph 3.13 summarises the various notices sent to Mr Lynch covering the period from October 2017 to September 2018. That table shows the rate of fortnightly payment was around $700 up to the end of February 2018 then increased to over $1,000 from March 2018 to September 2018.

    [10] Ibid T25, page 141.

    [11] Ibid T26, page 144.

17. Mr Lynch expected his rate of carer payment to go down because the amount of care he was providing had gone down. Instead, the rate went up. Notwithstanding it was the responsibility of Centrelink to correctly calculate his entitlement to carer payment, it should have been obvious to Mr Lynch when his rate of payment went up something was wrong and worthy of specific follow up. The Tribunal understands Mr Lynch does not dispute he ceased to provide constant care to Ms Smith and therefore he was no longer entitled to receive carer payment because in his submission to AAT1, Mr Lynch states:

    ‘As a result, of providing less hours care to Karen [Ms Smith], I was no longer entitled to carer’s payment from 1 February 2018 [he now realises]. I did not understand that my entitlement was either all or nothing. I had assumed that because I was caring reduced hours it could mean reduced payment. I told them that the care was reducing by 50% but no one responded that would mean I would not get the payment anymore.’

18. The Tribunal understands from his evidence at the Hearing Mr Lynch does not dispute he was overpaid during the Relevant Period and the Debt is a debt due to the Commonwealth. Accordingly, the Tribunal finds the Debt is a debt due to the Commonwealth.

19. The Tribunal then turns its attention to the recovery of the debt. As the Secretary says in the SFIC at paragraph 4.21:

    ‘The Secretary contends that there are only two mechanisms available under the Act that allow for a properly raised debt not to be recovered, these being write-off and waiver. A debt can be waived on the basis of sole administrative error or special circumstances.’

    Write-off (delayed recovery) of a debt

20. Under s 1236 of the Act, recovery of a debt can be written off (suspended) for a specific period. This can only occur if certain strict conditions are met, such as the person’s whereabouts are unknown, or they have no capacity to repay the debt. Section 1236(1A) clearly sets out the situation in which it could be considered:

    (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.

21. Mr Lynch keeps in regular contact with Centrelink, so they know his whereabouts. There is no evidence before the Tribunal Mr Lynch is in any way trying to hide from Centrelink or the Debt. According to the SFIC at paragraph 4.29, Mr Lynch receives income from Centrelink slightly more than his household expenditure leaving a small surplus from which the Debt can be repaid. In the future he may have increased earnings from business or employment.

1. For the above reasons, the Tribunal finds none of the criteria set out in s 1236 of the Act exist in the current case so write off under that section is not enlivened.

   Sole administrative error

2. The law in relation to write off due to sole administrative error is set out above at [‎18]. Paragraph 4.39 of the SFIC states:

   ‘The Secretary concedes it is open for the Tribunal to find that the debt was attributable solely to administrative error for the period 1 February 2018 to 6 February 2018. This is because, on 1 February 2018, the Applicant contacted the Agency to advise he was providing reduced care to Ms Smith, however it was not until 7 February 2018 that the first notice was issued to the Applicant putting him on notice that he continued to receive carer payment, and at an increased rate.’

3. Ms Gehrke sought to clarify that concession in her opening remarks when she says:

   It might appear on the face of the Secretary's submissions that the sole administrative error was being conceded under section 1237A for that six-day period. It's not. It's a concession that there is six days of sole administrative error, but the provision is not enlivened, given that the overpayment was not received in good faith, in the Secretary's submission.[12]

   [12] Transcript dated 14 February 2022, page 8, lines 23-28.

4. Mr Lynch disagrees and says he did receive the payments in good faith.

   Acting in good faith

5. To act ‘in good faith’, also known as acting bona fide, is to act honestly and sincerely, without an intention to deceive. A decision made in good faith is one where the person making it genuinely believes it to be correct for all parties as a whole and not merely for their own self-interest. Good faith relates to the state of mind of the person making the decision. It is important at the time the decision is made, the maker honestly believed the decision to be in the best interests of all parties and is reasonable.

6. The Federal Court decision in SDEETYA v Prince [1997] FCA 1565 makes it clear that the question is whether the person had a positive belief of entitlement at the time of receipt. In Prince, Finn J stated that:

   ‘Its [the burden of proof of good faith] concern is with the state of mind of a person concerning his or her receipt of the payment: if that person knows or has reason to know that he or she is not entitled to a payment received - i.e., is not entitled to use the moneys received as his or her own - that person does not receive the payment in good faith. Absent such knowledge or reason to know, the receipt would be in good faith.’

7. The Secretary considers it inconceivable Mr Lynch did not know the carer payments he received after 1 February 2018 were wrong because he said he was expecting a reduction. In the SFIC at paragraph 4.51 the Secretary says:

   ‘The Secretary contends that it must have been obvious to the Applicant from the start of the debt period that he was being paid carer payment far in excess of his entitlement. The Applicant knew, or had reason to know, that his rate of carer payment would change following his advice of 1 February 2018 and as such, he could not have held an honest belief that he was entitled to receive and retain the payments made. Further, if the Tribunal considers that the Applicant did not know (which is not conceded), the Applicant must have had suspicion or doubt that he was not entitled to the payments made at the rate they were, having regard to the notices and his own expectation that his carer payment would reduce.’

8. The evidence of Mr Lynch is he repeatedly contacted Centrelink to check he was receiving the correct payment, especially on 7 February 2018 when he attended the Toowong office of Centrelink and discussed the matter with an officer, he says was experienced in carer payment and who confirmed his entitlement to carer payment even though his care had reduced to 50%.[13] He said his payments often fluctuated over the years he had been receiving carer payment, and he did not notice the payments had gone up (when he expected them to go down) because he had funds in the account from the property settlement following his divorce.

   [13] Exhibit 5, page 1.

9. The Secretary should bear in mind Mr Lynch is not legally trained nor versed in the nuances of the Act and the Administration Act. He, like most other social security customers, relies on Centrelink and its officers to apply the law to his circumstances as he notifies them. Human error creeps into all decision making, including by Centrelink customers and Centrelink officers. The evidence of Mr Lynch is he acted honestly and sincerely, without an intention to deceive, notwithstanding it was in his interest, albeit naively (emphasis added), to accept the carer payments he received given he had notified Centrelink of the change to the level of care he was providing. He repeatedly said in his evidence he kept checking with Centrelink about the rate of payment because he did not want to incur a debt (knowing he had limited ability to repay such a debt). The Tribunal doubts a person accepting payments not in good faith would repeatedly ask for the calculation to be checked in such circumstances and finds Mr Lynch did act in good faith in accepting the payments.

10. It is also the case Centrelink did not act on the advice provided by Mr Lynch on 1 February 2018 and should have cancelled his carer payment then because he advised he was only providing 50% of the care he had been providing and so was no longer providing constant care. There is a significant element of Centrelink error in that Mr Lynch was not alerted to the impact on his carer payment from 1 February 2018. The information he provided on 1 February 2018 and later dates was not acted upon and his numerous subsequent discussions and attendances with Centrelink did not result in prompt action. Further, Mr Lynch’s application for Austudy was rejected on 4 May 2019 on the basis he was entitled to another payment, which was better for him. That was yet another opportunity for Centrelink to realise its mistake and correct it, which it failed to do.

11. Nevertheless, these failures on Centrelink’s part were not the sole reason for the Debt. As set out in the SFIC, Mr Lynch received numerous letters advising the amount of his ongoing carer payment during the Relevant Period, with the accompanying (section 68(2)) notices requiring him to notify any changes. He was still responsible for notifying Centrelink of their error when his payment went up, given he expected it should have gone down, notwithstanding he had funds in the account and his payment had fluctuated over the years. This he did perhaps without the necessary vigour to cause Centrelink to check its own work. His failure also contributed in part to the Debt, which means the Debt did not arise solely from administrative error by Centrelink. As such, s 1237A does not apply and the Tribunal finds there is no reason to waive the Debt.

    Special circumstances

12. The law in relation to waiver under special circumstances is set out at [‎19]. In paragraphs 4.57 and 4.58 of the SFIC, the Secretary states:

    ‘The Secretary accepts that the debt did not arise wholly or partly from the Applicant or another person knowingly making a false statement or false representation or failing or omitting to comply with a provision of the social security law, and therefore the Applicant satisfies paragraph 1237AAD(a) of the Act.

    However, the Secretary contends that there are no special circumstances and therefore the Applicant does not satisfy paragraph 1237AAD(b) of the Act.’

13. It is not in dispute that Mr Lynch satisfies sub-sections (a) and (c) of section 1237AAD because Mr Lynch did not knowingly make a false statement or fail to comply with his obligations, as conceded by the Secretary, and write-off of the Debt has already been discounted, see [‎30]. The issue of special circumstances, which the Secretary says does not apply to Mr Lynch, is discussed in detail below in the context of other case law not identified in the SFIC.[14]

    [14] Oberhardt v Secretary, Department of Education, Employment and Workplace Relations [2008] FCA 1923.

14. As the term special circumstances is not defined in the legislation, the Tribunal turns to case law as does the Secretary who refers at paragraph 4.60 of the SFIC:

    ‘In Beadle and Director-General of Social Security (1984) 6 ALD 1, the Tribunal stated at [12]:

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

    Unusual, uncommon or exceptional circumstances markedly different from the usual run of cases

15. The quote above from Beadle sums up the test to be applied to the circumstances of Mr Lynch, that is, his circumstances must be unusual, uncommon or exceptional and markedly different from the usual run of cases.

16. Had Mr Lynch only contacted Centrelink on 1 February 2018 about the change in care for Ms Smith and left it at that his circumstances may not have been exceptional or unusual. The facts are Mr Lynch did contact Centrelink multiple times over an extended period, both by telephone and attendance at Centrelink offices, to check he was receiving the correct benefit so as not to incur a debt he knew he could not afford to repay. Each time he was told (incorrectly) he was receiving the correct benefit. Even when he applied for Austudy, it was rejected on the basis his carer payment benefit was superior. What more could Mr Lynch have done to meet his obligations?

17. If it is common and usual for Centrelink to continue to make incorrect decisions about one customer over an 18-month period, then Centrelink has much to answer for. The Tribunal considers it is more likely the case the continued failure by Centrelink to get this right is uncommon and unusual.

18. The Tribunal now turns to considering if Mr Lynch may have been entitled to other benefits and allowances instead of carer payment and if so, does that also amount to special circumstances. As Spender J observed in Oberhardt at [58 -59]:

    Section 1237AAC provides for circumstances where the Secretary must waive the right to recover a debt to the extent set out in the section, where a debtor or a debtor’s partner would have been entitled to an allowance. The section deals with unclaimed entitlements to various allowances, namely, family payment or family allowance, a youth allowance, and a parenting allowance or parenting payment.

    In my opinion, however, the terms of s 1237AAC do not mandate that notional entitlement cannot be considered as a relevant consideration when considering “special circumstances” in s 1237AAD(b). There is nothing in s 1237AAD or its neighbouring provisions to suggest that the limitations in s 1237AAC apply in circumstances other than specifically enumerated in s 1237AAC. To do so is impermissibly to fetter a broadly expressed discretion, by implication.

    At [32]:

    ‘The term “notional entitlement” is not defined in the Social Security Act, although it is used in s 1237AAC. In essence, the term refers to an unclaimed benefit; a benefit which was not actually claimed by the person, but to which that person would have been entitled had they applied for it.’

    And later at [63] and [64]:

    The view reflected by the Tribunal in Lyster, Huynh, Dobbie, Sara, and QX2006/1 referred to above, to the effect that notional entitlement is not necessarily excluded in considering whether “special circumstances” exist, for the purposes of s 1237AAD, is correct (emphasis added].

    It follows that, in my view, notional entitlement should not be excluded from the range of available relevant considerations in deciding whether there are “special circumstances” to waive a debt under s 1237AAD.

19. In considering whether special circumstances existed pursuant to s 1237AAD of the Act, the Tribunal must consider whether the discretion to waive the Debt was enlivened by the notional entitlement to other benefits under the Act, whether they were claimed and rejected, or not claimed.

    Notional entitlement (to other benefits)

20. According to the SFIC, Mr Lynch contacted the Agency on 23 February 2019 regarding a claim for Austudy.[15] He provided further information requested by the Agency and on 4 May 2019, the Austudy claim was rejected.[16] The letter advising of the rejection says: ‘We cannot pay you Austudy because we may be able to pay you another Centrelink payment that is more suitable.’ The Tribunal understands the other Centelink payment referred to was carer payment.[17] The implication from the Centrelink letter is the claim for Austudy may have been approved if he had not been (incorrectly) approved for carer payment.

    [15] Exhibit 1, T Documents, T46, page 318.

    [16] Ibid T29, page 152.

    [17] Ibid T46, page 321.

21. In his verbal submissions[18], Mr Lynch points out he may have been entitled to parenting payment (Single) during the Relevant Period. He says he did not know that, and the Tribunal is unaware if he made such a claim.

    [18] Transcript dated 14 February 2022, page 31, lines 38-40

22. It is outside the scope of this decision for the Tribunal to attempt any assessment of the entitlement of Mr Lynch to other social security benefits and allowances during the Relevant Period (Notional Entitlements). It is clear Mr Lynch may have Notional Entitlements during the Relevant Period and had they been claimed and or correctly assessed, he may have received those benefits in lieu of carer payment to which he was not entitled. For that reason, the Tribunal finds the Notional Entitlements of Mr Lynch forms part of the special circumstances of this case.

23. The Tribunal finds special circumstances (other than financial hardship alone) exist under s 1237AAD which make it desirable to waive that part of the Debt equivalent to the assessed value of the Notional Entitlements.

    CONCLUSION

24. Mr Lynch is the victim of continued errors by Centrelink and his own failure to vigorously prosecute his entitlement, or not, to carer payment during the Relevant Period even though he did accept the payments in good faith. As a result, Mr Lynch has a debt of $40,790.51, which has since reduced to around $39,000 with subsequent deductions from other benefits. That debt is due and payable to the Commonwealth.

25. Had Mr Lynch been properly assessed for carer payment when he notified Centrelink on 1 February 2018 his care of Ms Smith was no longer ‘constant care’, the Debt would not have accrued and there were other benefits and allowances he would have been notionally entitled to.

26. The errors by Centrelink and the other benefits and allowances Mr Lynch would have been entitled to amount to special circumstances to justify waiving part of the debt. Centrelink will be directed to calculate his notional entitlements.

    DECISION

27. The Tribunal sets aside the decision under review and remits it with the direction that the debt for overpaid carer payment is $40,790.51 less the amount of any other social security benefits and allowances to which Mr Lynch was entitled during the Relevant Period.

I certify that the preceding 58 (fifty-eight) paragraphs are a true copy of the reasons for the decision herein of Member P Ranson

……………[SGD]……………..
Associate
Dated: 13 May 2022

Date of Hearing:	14 February 2022, final submissions received 13 April 2022
Applicant:	By Microsoft Teams
Solicitor for the Respondent:	Sparke Helmore