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

Magok and Secretary, Department of Social Services (Social services second review) [2021] AATA 571 (18 March 2021)
Division:GENERAL DIVISION
File Number: 2019/7185
Re:Monica Magok
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Senior Member Dr M Evans-Bonner
Date:18 March 2021
Place:Perth

The Reviewable Decision, being the AAT1 Decision dated 11 October 2019 as varied by the Respondent on 20 January 2021, is affirmed.
..............[Sgd]..........................................................
Senior Member Dr M Evans-Bonner
CATCHWORDS
SOCIAL SECURITY – parenting payment (single) (PPS) – whether the Applicant was overpaid PPS – decision to raise and recover PPS debt – whether a debt to the Commonwealth – whether the debt should be recovered in full – whether recovery of all or part of the debt should be waived or written off – whether debt attributable to sole administrative error of the Commonwealth – whether there are special circumstances that make it desirable to waive the debt – Reviewable Decision affirmed
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth) – s 42A(4)
Income Tax Assessment Act 1997 (Cth)
Social Security Act 1991 (Cth) – ss 8(1), 66A(2), 68(2), 100(1), 123(3)(b), 503, 1068A, 1068A-A1, 1072, 1223(1), 1236(1), 1236(1A), 1236(1A)(c), 1236(1A)(d), 1237A(1), 1237AAD
Social Security (Administration) Act 1999 (Cth) – ss 182(2), 196
CASES
Angelakos v Secretary, Department of Employment and Workplace Relations (2007) 100 ALD 9
Beadle and Director-General of Social Security (1984) 6 ALD 1
Boscolo v Secretary, Department of Social Security (1999) 90 FCR 531
Davy and Secretary, Department of Employment and Workplace Relations (2007) 94 ALD 693
Dranichnikov v Centrelink (2003) 75 ALD 134
Gerhardt and Secretary, Department of Employment, Education and Training [1996] AATA 173
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Mirza and Secretary, Department of Families, Community Services and Indigenous Affairs [2007] AATA 1309
Secretary, Department of Family and Community Services v Sekhon (2003) 73 ALD 41
Secretary, Department of Social Security v Hales (1998) 82 FCR 154
Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267
Ward and Secretary, Department of Family and Community Services [2000] AATA 212

REASONS FOR DECISION
Senior Member Dr M Evans-Bonner
18 March 2021
OVERVIEW

The Applicant is seeking review of a decision of the Social Services & Child Support Division (AAT1) of the Administrative Appeals Tribunal (the Tribunal) dated 11 October 2019 (T2) (AAT1 Decision).
On 20 December 2017 an Authorised Review Officer (ARO) of the Department of Human Services, now called Services Australia, (Centrelink) decided to affirm the following decisions of Centrelink (ST1/1-5):
(a)first, a decision dated 22 September 2017 to ask the Applicant to repay a debt for the overpayment of a parenting payment (single) (PPS) for $57,019.99 for the period 28 September 2011 to 7 February 2017 (Debt Period); and
(b)second, a decision dated 26 September 2017 to ask the Applicant to repay a Jobs, Education and Training Child Care Fee Assistance (JETCCFA) debt of $45,288.46.
The AAT1 Decision:
(a)affirmed the first ARO decision that the Applicant had to repay the PPS debt; and
(b)dismissed the Applicant’s application for a review of the second ARO decision regarding the JETCCFA debt under s 42A(4) of the Administrative Appeals Tribunal Act 1975 (Cth) because it was not reviewable by the Tribunal.
On 4 November 2019 the Applicant applied to the General Division of the Tribunal (AAT2) for a review of the AAT1 Decision (T1).
On 18 March 2020, Centrelink recalculated the overpayment and varied the PPS Debt amount to $52,567.52 (R4, original Annexure A). Centrelink removed the income from one of the family day care centres the Applicant had worked for, which will be referred to as PLFDC.
Again, on 20 January 2021 Centrelink recalculated the overpayment, and decided to vary the PPS Debt amount to $52,840.66 (R4, revised Annexure A). Due to this variation, the Reviewable Decision that is currently before the Tribunal is the AAT1 Decision, as varied by Centrelink on 20 January 2021, by operation of s 182(2) of the Social Security (Administration) Act 1999 (Cth) (Administration Act). The decision regarding the JETCCFA debt is not before this Tribunal.
FACTS
The Applicant is a woman in her early thirties who was born in Sudan. She first came to Australia on a partner visa in 2008 with her husband and infant daughter. Since arriving in Australia, the Applicant completed various qualifications including a certificate in aged care, certificates in accounting, and an accounting degree (A1, paragraph [20]).
In approximately May 2011, the Applicant’s husband returned to Sudan. She did not hear from him and approximately one month later found out that he was living with another woman (A1, para [21]-[23]).
After coming to Australia, the Applicant had four more children. They were born in 2010, 2012, 2015 and 2018.
She was granted a PPS from 9 August 2011 (T11/419). She was in receipt of a PPS throughout the Debt Period. During the Debt Period the Applicant was sent notices which told her that she needed to notify Centrelink of any change in her circumstances within 14 days of the change occurring (T12/455-569).
On 28 September 2011 the Applicant commenced part-time employment with an organisation that provides aged care services (Aged Care Employer) (T2/5, A1, para [33]).
An electronic Centrelink file note recorded that the Applicant contacted Centrelink on

18 September 2012 and that she advised she ceased working in July (T13/590). However, records from the Aged Care Employer show that the Applicant had not stopped working (T11/416-7).
Another electronic Centrelink file note recorded that the Applicant told Centrelink that she had opened her own family day care business from 27 December 2013 (T13/613).
The Applicant was self-employed as a family day care educator. Information from the Department of Education (T4/66) confirms that the Applicant worked for the following family day care businesses:
(a)HFDC from 1 July 2013 to 27 July 2014;
(b)PLFDC from 16 September 2014 to 23 November 2014; and
(c)NFDC from 24 November 2014 to 16 August 2015.
On 8 November 2016 Centrelink commenced a review into the Applicant’s past and present eligibility to receive a PPS (T13/682).
As part of this review, on 8 February 2017, Centrelink issued a notice to the Aged Care Employer, pursuant to s 196 of the Administration Act, requiring them to provide superannuation and wage information concerning the Applicant (T6/239-242). In response, the Aged Care Employer provided payroll information (T6/243-278). Another s 196 notice was issued to the Applicant’s bank who provided information concerning the Applicant’s bank accounts (T7/280-379).
On 31 May 2017, the Applicant provided information about her income to Centrelink including her income tax return estimates for the 2013/2014 and 2014/2015 financial years (T13/698).
A Centrelink record dated 31 July 2017 stated that the Applicant had “been on and off of reporting throughout the overpayment period” and recognised that she “did not recklessly [mis-declare] her income” (T13/687). The Applicant submitted in the Applicant’s Statement of Issues, Facts and Contentions (SIFC), at paragraph [33]-[34] that “[s]he experienced difficulties in reporting her income correctly as she did not understand the reporting requirements and different types of loading she received”. The Applicant further submitted, at paragraph [34] that:
The Applicant was told to record the number of hours she worked and her hourly rate. She would sometimes take this information to Centrelink where someone would help her report.
The Tribunal accepts that the Applicant tried to report her income to Centrelink, that the process may have been confusing for her and that she did not act recklessly or dishonestly. However, unfortunately for the Applicant, the result was that she underreported her income to Centrelink. This underreporting was discovered when Centrelink compared the amount of income declared by the Applicant against the information produced pursuant to the s 196 notices.
Following the review, Centrelink recalculated the Applicant’s entitlement and determined that during the Debt Period the Applicant received $91,212.69 in PPS when she was only entitled to $34,192.70 (T8/380). Consequently, on 22 September 2017, Centrelink decided to raise and recover a debt for the overpayment, being $57,019.99 (T10/403-404).
On 27 September 2017 the Applicant requested that Centrelink review the decision (T13/695). However, as noted above, the Applicant was unsuccessful after a review by the ARO and then the AAT1.
The Applicant is currently repaying the debt at $100 per fortnight from the family tax benefit she is currently receiving (R4, paragraph [26]). At the date of the hearing, the outstanding balance of the debt was $43,799.07 (transcript/21).
ISSUES
The issues for the Tribunal to determine are whether:
(a)the Applicant was overpaid PPS in the amount of $52,840.66 for the Debt Period;
(b)if so, whether the overpayment is a debt to the Commonwealth; and
(c)whether the debt should be recovered in full, or whether recovery of all or part of the debt should be waived or written off.
LEGISLATION AND POLICY
Social Security Act 1991 (Cth)
Section 503 of the Social Security Act 1991 (Cth) (the Act) is titled, “[h]ow to work out a person’s parenting payment rate”. It provides, in part:
A person’s parenting payment rate is worked out using:
(a) if the person is not a member of a couple-the Pension PP (Single) Rate Calculator at the end of section 1068A (see Part 3.6A); or …
Section 1068A of the Act provides, in part:
(1) If a person is not a member of a couple, the person’s rate of parenting payment is the pension PP (single) rate.
(2) The pension PP (single) rate is worked out in accordance with the rate calculator at the end of this section.
The rate calculator applies the “ordinary income test using Module E … to work out the income reduction”. That is, the ordinary income test is used to work out the rate reduction (step 5 of s 1068A-A1 of the Act).
Section 8(1) of the Act sets out the following definitions concerning income:
income, in relation to a person, means:
(a) an income amount earned, derived or received by the person for the person's own use or benefit; or…
…
income amount means:
(a)valuable consideration; or
(b)personal earnings; or
(c)moneys; or
(d)profits;
(whether of a capital nature or not).
…
ordinary income means income that is not maintenance income or an exempt lump sum.
Further, s 1072 of the Act, titled “[g]eneral meaning of ordinary income”, provides:
A reference in this Act to 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, other than a reduction under Division 1A.
(Notes omitted.)
Section 1075 in Division 1A provides that if a person carries on a business, their ordinary income from the business is to be reduced by certain allowable deductions under the Income Tax Assessment Act 1997 (Cth).
Section 1223(1) of the Act provides that if a person receives a social security payment they are not entitled to it is a debt due to the Commonwealth:
(1)Subject to this section, 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.
Social Security (Administration) Act 1999 (Cth)
Section 66A(2) of the Administration Act contains a general requirement for a person to inform the Department of an event or change of circumstances that might affect their social security payment within 14 days after the day on which the event or change occurs. It provides:
(2)   If:
(a)   either:
(i)     a social security payment (other than utilities allowance or energy supplement under Part 2.25B of the 1991 Act) is being paid to a person; or
(ii)      a person holds a concession card; and
(b)   an event or change of circumstances occurs that might affect the payment of that social security payment or the person’s qualification for the concession card;
the person must, within 14 days after the day on which the event or change occurs, inform the Department of the occurrence of the event or change.
Section 68(2) of the Administration Act states that the Secretary may give a person a notice requiring a person to inform the Department if a specified event or change of circumstances occurs, or is likely to occur, that may affect their payment. It provides, in part:
(2)   The Secretary may give a person to whom this subsection applies a notice that requires the person to do any or all of the following:
(a)   inform the Department if:
(i)     a specified event or change of circumstances occurs; or
(ii)     the person becomes aware that a specified event or change of circumstances is likely to occur;
(b)   give the Department one or more statements about a matter that might affect the payment to the person of the social security payment;
(c)   give the Department one or more statements about a matter that might affect the operation, or prospective operation, of Part 3B in relation to the person.
Section 123(3)(b) of the Administration Act relevantly provides that:
(3) A determination of the rate of a social security payment continues in effect until:
…
(b) the payment becomes payable at a lower rate under section 98, 99 or 100.
Section 100(1) of the Administration Act states:
(1) Subject to subsection (2), 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.
FINANCIAL YEAR IN WHICH THE BUSINESS INCOME FROM HFDC SHOULD BE APPORTIONED
In addition to determining the issues identified above, the parties asked the Tribunal to make a finding about the financial year in which the business income from HFDC should be apportioned. The Respondent submitted that the business income ought to apply for the 2014/2015 financial year because the written evidence before the Tribunal shows that the Applicant finished working for HFDC on 27 July 2014. However, the Applicant’s representative submitted that she actually finished working for HFDC at the end of the 2013/2014 financial year, on 13 June 2014 (transcript/4).
The Applicant also gave evidence at the hearing that her last day of work at HFDC was

13 June 2014 (transcript/25 and 26-27). She explained that she remembered this date because it was the day of her cousin’s wedding. She further explained that the payment she received on 27 July 2014 was a “reimbursement payment” because she had not been properly paid at the rate and for the hours she had worked. The Applicant stated that she had a meeting with the operator of HFDC on 13 June 2014 who said that she would pay this reimbursement the following fortnight.
However, the educator payment history report from HFDC indicates that 27 July 2014 was the last day that the Applicant worked at HFDC (T4/64). This is also indicated in information from the Department of Education (T4/66). A Centrelink file note dated 4 August 2014 also refers to a letter provided by the Applicant (which is not before the Tribunal) which confirms that the “dlw” [date last worked] was 27 July 2014 (T13/633).
The Tribunal is of the opinion that the written records are the most reliable confirmation of the date that the Applicant last worked for HFDC. The Tribunal therefore finds that the date the Applicant last worked for HFDC was 27 July 2014.
WAS THE APPLICANT OVERPAID PPS IN THE AMOUNT OF $52,840.66 FOR THE DEBT PERIOD?
As outlined above at paragraphs [18]-[19], although the Applicant attempted to report her income to Centrelink from time to time, she did not correctly do so. This resulted in her rate of PPS being calculated on an incorrect basis, and an overpayment of PPS to her during the Debt Period.
As set out at paragraphs [5]-[6] above, the amount of the debt was recalculated by Centrelink on 18 March 2020 and 20 January 2021. It was submitted on behalf of the Applicant that the PPS calculations in the rate calculator should only include her employment with the Aged Care Employer. It was submitted that the Applicant’s income from HFDC and NFDC should not be included because the records kept by HFDC and NFDC (who, after the Debt Period, were both suspended from operating due to “non-compliance with state of Commonwealth law”) were likely to be unreliable and may possibly overstate the Applicant’s gross income (A1, paragraphs [38], [42], [62]-[63]). However, Centrelink’s calculations were based, not just on information received from HFDC and NFDC, but also on other objective financial evidence including the Applicant’s payslips, bank account statements and her income tax return estimates for the 2013/2014 and 2014/2015 financial years.
Accordingly, the Tribunal finds that the Applicant was overpaid PPS in the amount of $52,840.66 for the Debt Period.
IS THE OVERPAYMENT A DEBT TO THE COMMONWEALTH?
Section 1223(1) of the Act effectively provides that if a social security payment is made, and the person who obtains the benefit was not entitled to receive it, the amount of the payment is a debt due to the Commonwealth.
As the Applicant received PPS during the Relevant Period at a higher rate than she was entitled to, the Tribunal finds that the amount of the overpayment ($52,840.66) is a legally recoverable debt due to the Commonwealth.
SHOULD THE DEBT BE RECOVERED?
In Secretary, Department of Social Security v Hales (1998) 82 FCR 154, 155 (Hales) French J (as he then was) noted that the taxpayer expects the repayment of social security benefits received by a person if they were not entitled to them:
From time to time in the administration of social security benefits overpayments occur. Sometimes these are the result of innocent non-compliance with the requirements of the law which can be affected by the stress associated with the circumstances that led to the receipt of benefits in the first place. The 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. However, the confining of a recovery regime by rigid rules, particularly in this area of the law, is likely to be productive of unfair or harsh outcomes in some of the great variety of fact situations that can arise. There are provisions in the Act which recognise that reality. They relate to the writing off and the waiver of debts otherwise due to the Commonwealth.

However, as his Honour identified in the above passage, to prevent hardship the Act balances the requirement to repay an overpayment debt with the possibility that the debt may be waived or written off in certain circumstances. The Tribunal will now consider whether any of these circumstances apply to the Applicant.
Write off under s 1236(1) of the Act
Section 1236(1) of the Act provides:
(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.
Section 1236(1A) sets out the circumstances where the Secretary may decide to write off the debt under s 1236(1) of the Act. It provides:
(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.
The Tribunal finds that the debt is recoverable at law because, as stated above, the overpayment is a legally recoverable debt to the Commonwealth. Further, the Applicant has the capacity to repay the debt because she is currently making repayments on the debt as withholdings of $100 per fortnight from her family tax benefits. The remaining subsections (ss 1236(1A)(c) and (d) of the Act) are not relevant to this application.
Accordingly, the Tribunal finds that the debt cannot be written off under s 1236(1) of the Act.
Waiver for sole administrative error
Section 1237A(1) of the Act provides that the Secretary must waive a debt if the debt is attributable to the “sole administrative error” of the Commonwealth (in this case Centrelink):
(1)Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.
Note:Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).
In Gerhardt and Secretary, Department of Employment, Education and Training [1996] AATA 173 [39]–[40] (Gerhardt), Deputy President Forgie stated that “solely” in the context of a debt being attributable solely to the Commonwealth’s administrative error should be given its “ordinary meaning”. Deputy President Forgie stated, at [40]:
Applying those ordinary meanings to the sub-section mean that the Secretary must waive the right to recover the proportion of the debt that is attributable only to the Commonwealth’s administrative error. The Secretary’s duty to waive does not extend to those debts which are attributable to errors or other factors which are independent of the Commonwealth’s administrative error. It makes no difference that those other errors or factors are minor. If those other errors or factors follow as a result of the Commonwealth’s administrative error (i.e. they are incidental to the Commonwealth’s error), then it may be that the debt is attributable solely to the Commonwealth’s administrative error. Whether it is or is not attributable in that situation to the Commonwealth’s administrative error will be a question of fact.
In Secretary, Department of Family & Community Services v Sekhon (2003) 73 ALD 41, 47 [41], Wilcox J explained that:
However, it seems to me, the tribunal failed to consider the significance of the inclusion, in s 1237A(1), of the word “solely”. For the subsection to have effect, the “proportion” of the debt — in this case, it is common ground, that would be the whole of it — must be “attributable solely” to administrative error. It is not enough that, in the absence of administrative error, the debt would not have arisen. Administrative error must be the sole cause, not merely one of multiple causes.
In Ward and Secretary, Department of Family and Community Services [2000] AATA 212 Deputy President Forgie referred to her decision in Gerhardt, and clarified the meaning of sole administrative error in the context of s 1237A(1) of the Act (at [46]-[47]):
46.In an unreported decision of Gerhardt and Department Employment, Education and Training (Unreported, AAT 10941, 17 May 1996), I considered the meaning of "solely" as it formerly appeared in s. 289(1) of the Student and Youth Assistance Act 1973. That sub-section was in terms similar to s. 1237A(1) of the Act and a submission had been made that the word "solely" did not mean that the error had been made exclusively by the Commonwealth. After reviewing the authorities, I concluded that the word "solely" meant "exclusively", "only" or "to the exclusion of all else". There is no substantive difference between s. 289(1) of the Student and Youth Assistance Act 1973 and s. 1237A(1) of the Act. Consequently, I have taken the same view in relation to s. 1237A(1).
47.This means that the Secretary’s duty to waive does not extend to those debts which are attributable to errors or other factors which are independent of the Commonwealth’s administrative error. It makes no difference that those other errors or factors are minor. If those other errors or factors follow as a result of the Commonwealth’s administrative error (i.e. they are incidental to the Commonwealth’s error), then it may be that the debt is attributable solely to the Commonwealth’s administrative error.
The Applicant’s debt cannot, however, be waived under s 1237A(1) because it accrued due to the Applicant misreporting her income to Centrelink, and not due to any error on the part of Centrelink. It was therefore not solely attributable to an administrative error made by the Commonwealth.
Waiver for special circumstances
Section 1237AAD of the Act
Section 1237AAD of the Act provides that a debt can be waived by the Secretary if there are special circumstances. The section states:
The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a)the debt did not result wholly or partly from the debtor or another person knowingly:
(i) making a false statement or a false representation; or
(ii)failing or omitting to comply with a provision of this Act, the Administration Act or the 1947 Act; and
(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.
(Notes omitted.)
In summary, s 1237AAD of the Act gives the Secretary the discretion to waive a debt if there are special circumstances, other than financial hardship alone, which make it appropriate to do so. Additionally, the person must not have contributed to the debt by making a false statement, representation or by otherwise failing to comply with a provision of the Act or the Administration Act.
The Tribunal accepts that the Applicant did not knowingly make a false statement or representation. As discussed above at paragraphs [18]-[19], the Applicant attempted to report her income but found the reporting process confusing and under-reported her income. She was not intentionally dishonest and did not intentionally mislead Centrelink.
Waiver for special circumstances is discretionary
Even if the Tribunal is satisfied that there are special circumstances, the discretionary nature of s 1237AAD of the Act means that there may be cases where it is not appropriate or desirable to waive the debt. This was explained by French J in Hales at 162:
The section [s 1237AAD] confers upon the Secretary a discretion to waive the right to recover all or part of a debt. That discretion is only enlivened when the Secretary is satisfied that the three conditions specified in pars (a), (b) and (c) of the section are met. It does not follow that the Secretary is then obliged to waive the debt.
The first condition is negative, the second condition requires consideration of special circumstances that make it “desirable to waive” and the third condition requires the waiver be considered more appropriate than write off. The exercise of the discretion thus enlivened may be informed by other considerations which were not required to support satisfaction of the three necessary conditions.
(Emphasis added.)
In Mirza and Secretary, Department of Families, Community Services and Indigenous Affairs [2007] AATA 1309, Deputy President Jarvis declined to exercise the discretion, despite the statutory conditions being satisfied (at [41]):
In matters of this kind, it is customary for decision-makers to examine all the relevant facts and decide whether the conditions referred to in paragraphs (a), (b) and (c) of s 1237AAD are met, and if so, then to decide whether or not to exercise the discretion conferred by that section to waive the right to recover all or part of the debt. In the present case, however, I find it unnecessary to consider the question of whether the conditions precedent in paras (a), (b) and (c) have been fulfilled, because even if I were satisfied of those matters, I do not think it appropriate in the circumstances to exercise the discretion conferred on me (standing in the shoes of the Secretary) by s 1237AAD.
(Emphasis added.)
Defining “special circumstances”
The concept of “special circumstances” has been discussed in the case law and in Tribunal decisions. The concept must be viewed in the context of the statute providing that if an amount is paid to a person who is not entitled to it, that amount must be recovered. This was explained by Deputy President Forgie in the following passage from Gerhardt at [47]:
The words “special circumstances” have been considered in a number of cases in a number of contexts. These include Beadle v Director-General of Social Security (1985) 60 ALR, Secretary, Department of Social Security v Hulls (1991) 22 ALD 570, Trimboli v Secretary, Department of Social Security (1989) 86 ALR 64 and Secretary, Department of Social Security v Smith (1991) 13 AAR 454. The essence of cases such as these is that a consideration of whether or not there are special circumstances must be undertaken in the context in which the discretion is given. It is clear from Division 15 of Part 8 of the Act [Student Assistance (Youth Training Allowance) Amendment Act 1994] that the purpose of the provisions is to ensure the recovery of amounts paid under the Act to persons who are not entitled to be paid those amounts. What are special circumstances must be considered against that background. There will be special circumstances if the circumstances are such that it is unreasonable, unjust or inappropriate to recover the amount paid bearing in mind that the provisions are intended to ensure the recovery of amounts incorrectly paid…
As noted by Deputy President Forgie in Gerhardt, the circumstances must be such that “it is unreasonable, unjust or inappropriate to recover the amount”, despite the person having received a payment that they were not entitled to.
In Davy and Secretary, Department of Employment and Workplace Relations (2007)

94 ALD 693 (Davy), at 715-716 [80], Deputy President Forgie similarly referred to the need to consider the applicant’s individual circumstances against the administration of the social security system where other persons who have received payments will have been required to repay them:
The “special circumstances” are not merely directed to the person’s own circumstances. Rather, they are directed to those that are “special circumstances ... that make it desirable to waive”. That necessarily requires a consideration of the person’s individual circumstances but also a consideration of the general administration of the social security system. Waiver of the debt would mean that Mr Davy would have had the benefit of part of his DSP in circumstances in which he was not entitled to it. Certainly, he did not know that his father was giving him his own money but the fact that he was deceived by his father does not mean that it is desirable to waive the debt. He has had the benefit of the money and there is no injustice in requiring him to repay the money of which he has had the benefit but not the entitlement... The system of administration of the SS Act does not visit any injustice for many if not all social security recipients but it did not lead to any injustice or unfairness on Mr Davy that is not visited, or potentially visited, upon all other recipients of social security payments under the Act. Therefore, I am not satisfied that there are special circumstances that make it desirable to waive the debt under s 1237AAD of the Act.
The case law and Tribunal decisions also refer to the difficulty in precisely defining “special circumstances”. However, a common observation is that special circumstances will be “unusual, uncommon or exceptional”. For example, in Beadle and Director-General of Social Security (1984) 6 ALD 1 (Beadle), 3 the Tribunal stated:
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.
In Groth v Secretary, Department of Social Security (1995) 40 ALD 541 (Groth), 545 Kiefel J (as she then was) explained that special circumstances would be such as to distinguish an applicant’s situation from “the usual or ordinary case”:
The phrase “special circumstances”, it has been said, although imprecise is sufficiently understood not to require judicial gloss: Beadle’s case... and for present purposes it is sufficient to observe that it would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case. That was, I consider, the only enquiry to be undertaken in this case. It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary…
In Hales, at 162, French J also commented on the need for a flexible definition and the need to carefully consider the individual facts of each case:
The evident purpose of s 1237AAD is to enable a flexible response to the wide range of situations which could give rise to hardship or unfairness in the event of a rigid application of a requirement for recovery of debt. It is inappropriate to constrain that flexibility by imposing a narrow or artificial construction upon the words. It may be that there will be few cases in which the Secretary will be satisfied that there are special circumstances in the absence of financial hardship. It may be that there are few cases in which having found special circumstances to exist, the Secretary would exercise the discretion to waive in the absence of financial hardship. But to anticipate the limits of the categories of possible cases by imposing on the language of the section a fetter upon its application which is not mandated by its words, is to erode its useful purpose.
In Angelakos v Secretary, Department of Employment and Workplace Relations (2007)

100 ALD 9 (Angelakos), 17-18 [33] Besanko J also emphasised the importance of flexibility when identifying special circumstances. Besanko J referred to the circumstances having to be “unusual or uncommon” (rather than “exceptional”) to distinguish the case from the ordinary or usual:
I also note that the authorities have emphasised time and again the importance of maintaining flexibility in determining what constitutes special circumstances. The danger is that the test will be overstated if the word “exceptional” is emphasised. It was not the intention of parliament to confine the exercise of the discretion to an exceptional case. There is less risk of overstatement if the words “unusual” or “uncommon” are emphasised. Those words indicate, correctly in my view, the fact that there must be something that distinguishes the case from the ordinary or usual case. It may not be easy to postulate the ordinary or usual case other than in quite general terms and, in doing so, close attention must be given to the particular statutory context.
In Boscolo v Secretary, Department of Social Security (1999) 90 FCR 531 (Boscolo), 536 [18], French J stated that special circumstances required “something unusual or different”:
The core of the requirement for “special circumstances” or “special reasons” is that there be something unusual or different to take the matter the subject of the discretion out of the ordinary course: Minister for Community Services and Health v Chee Keong Thoo (1988) 8 AAR 245 at 261-262; 78 ALR 307 at 324 (Burchett J). But that does not require that the case be extremely unusual, uncommon or exceptional: Secretary, Department of Social Security v Hodgson (1992) 37 FCR 32; 108 ALR 322. In Beadle the Full Court, having concluded that the term “special” was sufficiently well understood not to require a judicial gloss said the matter was one for the decision-maker, in that case the Director-General of Social Security.
(Emphasis added.)
In Dranichnikov v Centrelink (2003) 75 ALD 134 (Dranichnikov), 148 [65-6] the Full Court of the Federal Court referred to the circumstances having to be “exceptional or unusual” such that they “distinguish the case in consideration from the usual case”:
[65]The decision-maker clearly also determined that the circumstances were such that they were not exceptional or unusual so that waiver could not be made as a matter of discretion under s 101. That equates “special circumstances”, as that expression is used in the Administration Act with either exceptional circumstances or unusual circumstances. The origin of the test apparently adopted by the secretary appears to be the decision of the first instance judge in Beadle v Directory-General of Social Security (1985) 7 ALD 670; 60 ALR 225. That was a decision under previous legislation, the history of which is referred to by French J in Secretary of Department of Social Security v Hales (1998) 82 FCR 154; 51 ALD 695; 153 ALR 259. The Full Court in Beadle comprising Bowen CJ, Fisher and Lockhart JJ, however, was of the view that it was not possible to lay down precise rules as to what constituted special circumstances under the then s 102(1)(a) of the Social Security Act 1947 (Cth). Their Honours point out that the question whether there were special circumstances was one for the decision-maker (in that case the Director-General) bearing in mind the purpose for which the power was given. The reference to the first instance decision from which the words “unusual, uncommon or exceptional” come was not actually affirmed by the Full Court.
[66]To some extent the question whether there were special circumstances must depend on how it came about that the error occurred. Again that is not a matter to which the decision-maker apparently averted. Other cases which have considered analogous words such as “special reasons” has tended to conclude, albeit in different contexts, that what is required will be circumstances which distinguish the case in consideration from the usual case. There will be a requirement that the circumstances are such that takes the case out of the ordinary: Jess v Scott (1986) 12 FCR 187; 70 ALR 185 and the cases in various contexts in the decision which Lockhart, Shepherd and Burchett JJ discuss.
In Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267, 274 [51] Jacobson J provided a succinct summary of the authorities:
The effect of the authorities is that the phrase “special circumstances”, although lacking in precision, is sufficiently understood as including events or things that render the operation of the statue in a particular case as unfair, unintended or unjust. What is required is something that takes the case out of the ordinary, and unfairness or unintended consequences may show that this exists. Moreover, the circumstances of the case are not confined to matters that are external to the operation of the statutory scheme…
The parties’ submissions regarding special circumstances

The Applicant’s submissions regarding special circumstances were summarised in paragraph [65] of her SIFC as follows:
The Applicant submits that her circumstances, when looked at as a whole, are special. Her overpayment is based on income from her work with 2 family day care businesses who have subsequently been suspended from operating. She is currently providing for 9 children and has onerous financial obligations, whilst dealing with her significant physical and mental health issues. She is soon to suffer a reduction in her employment income. Due to permanent injuries she is limited in the type of employment she can undertake.
The Applicant is providing for her five children aged 12, 11, 8, 5 and 3 years who are currently living with her. In 2015, she brought four of her siblings to Australia from Sudan, now aged 22, 21, 16 and 14 years, who also live with her. The Applicant had to take out a personal loan in 2015 to pay for the costs of bringing her siblings from Sudan to Australia (A1, para [28]). She is solely financially responsible for these children and does not receive any financial assistance from her former husband. She sends $250 per fortnight to her mother and two other siblings in Sudan, and at the hearing the Applicant said she was “really struggling to support them”. The Applicant also has a debt of approximately $5,000 from damage her brothers caused to community housing they previously resided in (transcript/26).
The Applicant also has physical health issues which are affecting her ability to work (A1, paragraphs [47]-[53]), and said she had been suffering from stress and depression (transcript/24). She has permanent injury to her right eye following an incident in Sudan when she was a child. The Applicant is blind in this eye and has nerve damage. At the time of the hearing she had been experiencing pain and dizziness and from October 2020 had to reduce her shifts at work from four shifts to two shifts, and from 16 hours per week to 12 hours per week (transcript/24 and 40). The Applicant also has a leg injury which affects her ability to sit down for more than an hour. She has some weakness in her left arm from when she broke her arm in 2006 and has difficulty lifting heavy things (transcript/25). At the time of the hearing the Applicant was using a redundancy payment of $10,000 to pay her mortgage but had approximately $10,000 in savings (transcript/25, 45). At the time of the hearing the Applicant had a medical certificate showing that she could not work from

7 January to 28 January 2021 (A2) due to her health issues.
The Tribunal has also considered the submissions made by the Secretary’s representative which, in summary, were that the Applicant’s circumstances collectively were not sufficiently unusual, exceptional or uncommon as to constitute special circumstances.
The Secretary’s representative further noted that:
·the Applicant had been able to gain qualifications in Australia, which led to her successful employment with the Aged Care Employer;
·she has $10,000 in savings;
·she had been able to obtain a mortgage to purchase a home during the Debt Period (although the Tribunal notes that there is unlikely to be any equity the Applicant could draw on – see transcript/22 and 38); and
·although her current expenses exceeded the income she was earning (A3), the Applicant’s current financial situation would be alleviated when she did not have to pay school fees of $7,000 per year (her children are attending public schools from this year), if she applied for a parenting payment at the single rate, negotiated a lesser repayment for her housing authority debt and negotiated a lower repayment of the debt with Centrelink during the period she was not able to work as many shifts.
In the Tribunal’s opinion the Applicant’s health issues, financial pressures, difficulties with two former day care providers she worked for and having children and family members to support are not sufficiently unusual or uncommon to constitute special circumstances, even when viewed collectively. The Tribunal is sympathetic to the Applicant’s circumstances and appreciates that they are stressful for the Applicant. However, there are likely to be other persons with Centrelink debts experiencing these types of circumstances, such that the Applicant’s situation is not out of the ordinary (Beadle, Boscolo, Dranichnikov, Groth, Angelakos). Given that the Applicant has been paid monies in excess of what she was entitled to, the Tribunal is not of the opinion that her circumstances are sufficiently special such that it would be unreasonable, unjust or inappropriate to recover the debt (Gerhardt, Davy).
Thus, in the circumstances of the Applicant’s case, the Tribunal is not satisfied that there are special circumstances under s 1237AAD of the Act which justify waiver of the debt.
CONCLUSION
In summary, and for the reasons outlined above, the Tribunal has found that:
(a)the date the Applicant last worked for HFDC was 27 July 2014;
(b)the Applicant was overpaid PPS in the amount of $52,840.66 for the Debt Period;
(c)the overpayment is a debt to the Commonwealth and constitutes a legally recoverable debt; and
(d)the debt should be recovered in full because there is no basis upon which it can be waived or written off.
DECISION
The Reviewable Decision, being the AAT1 Decision dated 11 October 2019 as varied by the Respondent on 20 January 2021, is affirmed.

I certify that the preceding 78 (seventy - eight) paragraphs are a true copy of the reasons for the decision herein of Senior Member Dr M Evans-Bonner

..........[Sgd]..............................................................
Associate
Dated: 18 March 2021

Date of hearing: 20 January 2021

Representative for the Applicant: Ms C Eagle, Welfare Rights and Advocacy Service

Representative for the Respondent:

Ms J Forsyth, Mills Oakley Lawyers

[2021] AATA 571

18 March 2021

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Procedural Fairness

Statutory Construction

Jurisdiction

Appeal

Date of hearing:	20 January 2021
Representative for the Applicant:	Ms C Eagle, Welfare Rights and Advocacy Service
Representative for the Respondent:	Ms J Forsyth, Mills Oakley Lawyers