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

Magrath and Secretary, Department of Social Services (Social services second review) [2017] AATA 1165 (31 July 2017)
Division:GENERAL DIVISION
File Number: 2016/3086
Re:John Magrath
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Member D K Grigg
Date:31 July 2017
Place:Brisbane

The Tribunal affirms the decision under review.
.................................[Sgd].......................................
Member D K Grigg
CATCHWORDS
SOCIAL SECURITY – Newstart allowance – overpayment – where applicant did not notify of change of circumstances – where no administrative error – where no special circumstances – decision under review affirmed
LEGISLATION
Acts Interpretation Act 1901 (Cth)
Social Security Act 1991
Social Security (Administration) Act 1999
CASES
Beadle and Director-General of Social Security (1984) 6 ALD 1
Boscolo v Secretary, Department of Social Security [1999] FCA 106 ; (1999) 90 FCR 531
Groth and Secretary Department of Social Security (1995) FCA 1708
Kazmierczak v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] FCA 1084
Secretary, Department of Social Security v Hales [1998] FCA 219
Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267; [2012] FCA 639
Secretary, Department of Family & Community Services v Sekhon [2003] FCA 76
Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190
REASONS FOR DECISION
Member D K Grigg
31 July 2017
INTRODUCTION

Mr Magrath was a recipient of the Newstart Allowance (“NSA”) from 30 May 2011 until
27 September 2014 when it was cancelled.
The Secretary contends that between 13 January 2012 and 23 May 2014 (“the Period”) Mr Magrath was overpaid because he failed to declare income earned during the Period.[1]
[1] Exhibit 2, Secretary’s Statement of Facts and Contentions, paras 8 and 16
Numerous letters were sent from the Department of Human Services (“Centrelink”) to
[2] Exhibit 1, T Documents, see T5 – T 14, T 16, T 17 – T 23, T 25 – T 26, letters from Centrelink to Mr
Magrath between 9 December 2011 and 6 May 2014.
Mr Magrath between December 2011 and May 2014 advising him of his obligations to report his employment income (and any other changes in circumstances) every 2 weeks.[2]
The Secretary says that on 29 May 2013 Centrelink received a tipoff that Mr Magrath had been working for Elders Real Estate (“Elders”) between 30 to 40 hours a week.[3] As a result of this information Centrelink contacted Mr Magrath by telephone on 28 June 2013 requesting information or documents regarding his employment at Elders to ensure that he was receiving the correct NSA entitlement.
[3] Exhibit 1, T Documents, T 42, page 631, Centrelink records.
On 16 July 2013 Mr Magrath provided Centrelink with a letter from Mr Mike Burns, Principal at Elders, confirming that as at 12 July 2013 Mr Magrath would no longer work for Elders and would be commencing work with Ray White on a base salary plus commission within the next month. Mr Burns wrote that Mr Magrath was paid $500 per week gross whilst at Elders being advance payments to cover expenses, to be offset against future commissions.[4]
[4] Exhibit 1, T Documents, T 17, page 112, Letter from Mike Burns dated 12 July 2013.
On 24 February 2014 Centrelink telephoned Mr Magrath who confirmed that he had commenced working at Ray White Commercial (“Ray White”). Mr Magrath told Centrelink that his position at Ray White was commission only and that, in the last six months, he had not sold any property and therefore had not been paid any money. Centrelink again asked Mr Magrath to provide details regarding what he was paid by Elders and also to provide something in writing from Ray White confirming his employment arrangements.[5] Mr Magrath told Centrelink that he would provide the information but he did not want his employers to be contacted. However, by 14 March 2014 Mr Magrath had failed to provide the requested information and as a result Centrelink contacted Elders and Ray White for information directly.
[5] Exhibit 1, T Documents, T 42, page 632, Centrelink records.
Elders provided an Employment Declaration Form to Centrelink on 20 March 2014 advising that Mr Magrath had been employed full-time on a commission based sales basis between 29 June 2011 and 9 August 2013. The staff commission statement provided by Elders indicated that between 7 July 2011 and 13 June 2013 Mr Magrath was receiving wages of $500 per week and that he had earned a total gross commission of $140,502.69.[6]
[6] Exhibit 1, T Documents, T 24, pages 139 – 148, Employment Declaration Form from Elders dated 20
March 2014.
Ray White provided an employment declaration form to Centrelink on 19 May 2014 which indicated that Mr Magrath had been employed full-time commencing 22 July 2013 and that he was paid as a commission only employee and that between 1 July 2013 and
[7] Exhibit 1, T Documents, T 27, pages 153 – 170, Employment Declaration Form from Ray White commercial
dated 19 May 2014.
28 February 2014 Mr Magrath had been paid $19,519.20 in wages or approximately $1346.15 a fortnight.[7]
As a result of this information, Centrelink prepared a report showing that during the Period, based on the income amounts Mr Magrath had been earning, Mr Magrath had been overpaid NSA by $28,049.97.[8] Centrelink then wrote to Mr Magrath on
[8] Exhibit 1, T Documents, T 28, pages 171 – 175, Centrelink Debt Report.
[9] Exhibit 1, T Documents, T 29, pages 176 – 177, Letter from Centrelink to Mr Magrath dated 26 August
2014 stop
26 August 2014 advising that he had been overpaid $28,049.96 (“NSA Debt”) and that that amount was now payable by him and that a Recovery Fee of 10% ($2804.95) (“Recovery Fee”) was also now payable as his earnings had been incorrectly declared.[9]
On 24 September 2014 Mr Magrath disputed the NSA Debt and said that the monies that he had received from Elders and Ray White were loans and not income. Mr Magrath also explained that he was going through a difficult separation from his wife and said that he had lost all of his family assets which had impacted heavily on his mental health.[10]
[10] Exhibit 1, T Documents, T 30, pages 178 – 180, Letter from Mr Magrath to Centrelink re-appeal dated
24 September 2014.
Mr Magrath has entered into an arrangement with Centrelink whereby he currently pays $40 per fortnight towards the repayment of his debt.[11]
[11] Exhibit 2, Secretary’s Statement of Facts and Contentions dated 2 May 2017, para 35.
Claims History
Mr Magrath requested a review of Centrelink’s decision to raise the NSA Debt and Recovery Fee on the grounds that the monies he received from Elders and Ray White were loans and not income. The Authorised Review Officer (ARO) affirmed the decisions to raise the NSA Debt and Recovery Fee and found no administrative error on the part of Centrelink nor any special circumstances which would justify waiving the debts owed.[12]
[12] Exhibit 1, T Documents, T 31, pages 181 – 186, Decision of Authorised Review Officer and notes dated
22 October 2014.
Mr Magrath then sought a further review on 1 February 2016.[13] The Social Services and Child Support Division (“SSCSD”) rejected Mr Magrath’s claim and affirmed the ARO’s decision on 11 April 2016.[14]
[13] Exhibit 1, T Documents, T 36, pages 237 – 238, Letter from AAT to Centrelink re-appeal dated 1
February 2016.
[14] Exhibit 1, T Documents, T2, pages 2 – 10, SSCSD’s Decision and Reasons for Decision dated 11 April 2016.
On 13 June 2016 Mr Magrath lodged an application for review of the SSCSD’s decision by this Tribunal.[15]
[15] Exhibit 1, T Documents, T1, pages 1 – 2, Application for Review dated 13 June 2016.
ISSUES FOR DETERMINATION
The issues for determination are whether or not:
(a)Mr Magrath has been overpaid his entitlement to NSA between 13 January 2012 and 23 May 2014; and, if yes
(b)the NSA Debt and Recovery Fee are recoverable; and
(c)the NSA Debt and Recovery Fee should be waived due to administrative error pursuant to section 1237A of the Social Security Act 1991 (Cth) (“the Act”); or
(d)“special circumstances” exist such that the NSA Debt and Recovery Fee should be waived pursuant to s 1237AAD of the Act.
WAS MR MAGRATH OVERPAID NEW START ALLOWANCE PAYMENTS?
If a person is not entitled to the social security benefit they have obtained, 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: section 1223(1) of the Act.
The rate of NSA payable to a person is calculated using a benefit rate calculator at the end of section 1068 of the Act.[16] Module G of section 1068 of the Act provides a method statement for working out the effect of the person’s income on their maximum pay rate (“Income Reduction Amount”) and section 1068 – A1 of the Act provides a method statement for working out a person’s maximum payment rate and provides for the maximum payment rate to be reduced by the Income Reduction Amount.
[16] Section 643 of the Act.
Mr Magrath disputes the calculations of the amounts of the NSA Debt and Recovery Fee and contends that they should not have been raised at all or alternatively should be waived.
Did Mr Magrath earn an income from Elders and Ray White?
There is no dispute that Mr Magrath was employed by Elders and Ray White during the period.
Mr Magrath says the funds received were loans to be set off against commissions earned[17] and that he still owes Ray White approximately $50,000.[18] Mr Magrath pointed to spreadsheets which he says indicates that the amounts received from Ray White and Elders were loans.[19] Mr Magrath said the spreadsheets were prepared by Ray White. However, there is nothing on the spreadsheets identifying who prepared them or what it is intended to represent. There is certainly nothing in the correspondence from Ray White or Elders to suggest that these amounts were loans, to identify how and when those loans were to be repaid, or to suggest that, in the event no commission was earned, it needed to be repaid. The pay advice provided by Ray White actually sets out that Mr Magrath’s annual salary was $37,000 and refers to his regular payments as wages.[20] The REIQ contract, entered into by Mr Magrath during his employment with Ray White, also makes no reference to the commissions being loans that needed to be repaid.[21] Mr Magrath says he cannot locate the employment contract entered into with Elders but it was in the same terms as the Ray White contract.
[17]         Exhibit 1, T Documents, T 38, page 241 Letter from Mr Magrath to Centrelink dated 28 March 2016.
[18]         Exhibit 1, T Documents, T 38, page 242, Letter from Mr Magrath to Centrelink dated 28 March 2016.
[19]         Exhibit 1, T Documents, T 30, page 179, Spreadsheet; T 32, page 189, Spreadsheet.
[20]         Exhibit 1, T Documents, T 27, pages 157 – 163, Ray White payroll advice.
[21]         Exhibit 1, T Documents, T 27, pages 164 – 170, Ray White employment agreement dated 23 July 2013.
Mr Magrath has also provided no evidence of any purported loan terms nor of any repayments made by him in satisfaction of those terms.
Further Mr Magrath provided tax returns for the Period in which the monies received by Mr Magrath from Elders and Ray White were declared as income.[22] The tax returns indicate that in the period Mr Magrath received $60,265 from Elders as wages and $32,307 as wages from Ray White.
[22] Exhibit 1, T Documents, T 35, page 193, Tax return for the year ended 30 June 2012; page 207, Tax return for
the year ended 30 June 2013; page 222, Tax return for the year ended 30 June 2014.
At the hearing Mr Magrath seemed surprised that these payments had been declared as income however he did not dispute that is what his tax returns indicated. Mr Magrath also acknowledged at the hearing that as a result, those amounts needed to be reconciled by Centrelink against the NSA he received in the Period.
Given the above, I do not accept that the amounts received by Mr Magrath from Elders and Ray White were loans. The monies were received by Mr Magrath in the course of his employment, were declared as income and Centrelink should have been informed.
Has Mr Magrath been overpaid?
Section 100(1) of the Social Security (Administration) Act 1999 (Cth) (“Administration Act”) provides:
Automatic rate reduction--recipient not complying with subsection 68(2) notice
(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.
There is no dispute by Mr Magrath that he received at least some of the letters from Centrelink regarding his reporting requirements and obligations, therefore subsection 100(1)(a) is satisfied. Mr Magrath said that he was moving around a bit during the period however he did not dispute that he was fully aware of his reporting obligations to Centrelink.
The amounts received by Mr Magrath during the Period should have been reported to Centrelink. There is also no dispute that Mr Magrath did not inform Centrelink of his change of circumstances whilst employed by Elders and Ray White, therefore subsections 100(1)(b)-(d) are satisfied. Because of the income earned by Mr Magrath during the Period the rate of social security should have been reduced.
Therefore, pursuant to section 100(1) of the Administration Act Mr Magrath’s NSA can be retrospectively reduced for the period. Subsection 100(1)(e) is satisfied.
I find that Mr Magrath owes the NSA Debt to the Commonwealth.
In relation to the Recovery Fee, section 1228B of the Act provides that where, relevantly, at the time a social security benefit was paid and the debt arose wholly or partly because the person had failed to provide information in relation to the person’s income or knowingly or recklessly provided false or misleading information in relation to the person’s income when required by law, an amount by way of penalty is added to a debt due to the Commonwealth.
The Secretary submits that the NSA Debt arose wholly as a result of Mr Magrath failing to provide the requisite information in relation to the income earned whilst employed by Elders and Ray White and that therefore the Recovery Fee must be applied. The Secretary also contends that Mr Magrath has not provided any reasonable excuse for not declaring his income or any evidence to support his assertions that those monies were not income.
Mr Magrath said he relied on his accountant and had thought the amounts received from Elders and Ray White were to be treated as loans. Mr Magrath also said he had informed a person called “Gavin” at Centrelink at Noosa about his employment terms at Elders when he commenced and that Gavin told him that he did not need to report anything until his tax returns had been prepared because what he was receiving was a loan and not a wage. However there are no Centrelink records corroborating Mr Magrath’s evidence of this conversation. Mr Magrath did not complete the preparation of his tax returns for the Period until 2015 and Centrelink was not provided with a copy until in or around October 2015.
In any event, even if the actual income amounts were not known at the commencement of his employment with Elders and Ray White Mr Magrath still took no formal steps to notify Centrelink of his change of circumstances at the end of each financial year and this constitutes a failure to comply with Centrelink notices served on him under section 68(2) of the Administration Act.
I note that Mr Magrath told the Tribunal he never intended to do anything wrong. However, I find that the Recovery Fee has been appropriately raised pursuant to section 1228B of the Act.
IS THE NSA DEBT AND RECOVERY FEE RECOVERABLE?
Even if a debt is owed, the Secretary may write off, or waive, a debt in certain circumstances set out in sections 1236, 1237A and 1237AAD of the Act.
SHOULD THE NSA DEBT AND RECOVERY FEE BE WRITTEN OFF? (S 1236(1A))
Section 1236 provides relevantly:
Secretary may write off debt
(1)Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.
(1A)The Secretary may decide to write off a debt under subsection (1) if, and only if:
(a) the debt is irrecoverable at law; or
(b) the debtor has no capacity to repay the debt; or
(c)...; or
(d)it is not cost effective for the Commonwealth to take action to recover the debt.
Is the debt irrecoverable at law? (s 1236(1A)(a))
Section 1236(1B) of the Act sets out when a debt is taken to be irrecoverable at law:
(1B)For the purposes of paragraph (1A)(a), a debt is taken to be irrecoverable at law if, and only if:
(a)the debt cannot be recovered by means of deductions, or legal proceedings, or garnishee notice, because the relevant 6 year period mentioned in section 1231, 1232 or 1233 has elapsed; or
(aa)the debt cannot be recovered by means of deductions or setting off because the relevant 6 year period mentioned in section 86 of the A New Tax System (Family Assistance) (Administration) Act 1999 has elapsed; or
(b)there is no proof of the debt capable of sustaining legal proceedings for its recovery; or
(c)the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or
(d)the debtor has died leaving no estate or insufficient funds in the debtor’s estate to repay the debt.
None of those circumstances exist in this case and therefore I find the NSA Debt is not irrecoverable at law.
Does Mr Magrath have capacity to repay the debt? (section 1236(1A)(b))
The Secretary submits that there is no evidence to suggest that Mr Magrath has no capacity to repay the debt as he has currently been making repayments of $40 per fortnight.
Mr Magrath submits that he has no assets and no regular income and, as a result of a long protracted legal battle regarding an industrial property enterprise, he was left with millions of dollars of debts. Mr Magrath says his current debts, as at April 2017, would be in the vicinity of $5 million. Mr Magrath says that as a result of the outcome of the litigation that he lost his family home, all assets including savings, superannuation, motor vehicles and so on. He said he also went through a marital separation in 2008 and subsequent divorce.
Mr Magrath provided Centrelink over 400 pages of documents regarding his court battle, forensic accountant’s reports, and other associated documents as evidence of his financial battles and current financial status.[23]
[23] Exhibit 1, T Documents, T 38, pages 240 – 613, Further material provided by Mr Magrath.
In 2008 the Magistrates Courts of New South Wales ordered Mr Magrath to pay BMW Australia Finance Ltd the sum of $43,466.97.[24] The material provided by Mr Magrath also indicates that Mr Magrath is paying $20 a fortnight to LAA Mortgages Pty Ltd until the amount of $1,039,134.72 is paid in full. In 2015 Mr Magrath completed a statement of financial position indicating that his total income was $0.00, he had total assets of $5,900 and total liabilities of $4,305,000.[25] Mr Magrath gave evidence that he is currently paying back several of his debtors approximately $100 a fortnight. Mr Magrath confirmed that the bulk of his debts were not immediately payable.
[24] Exhibit 1, T Documents, T 38, pages 247, Further material provided by Mr Magrath
[25] Exhibit 1, T Documents, T 38, pages 249-250, Further material provided by Mr Magrath; see also Exhibit 5,
letter from Stone Inc dated 25 May 2017.

Since his divorce Mr Magrath has remarried and he gave evidence that his wife and other family members are supporting him financially at present. However, since March 2015 Mr Magrath has been working for MMJ Real Estate. Between March 2015 and October 2016 MMJ Real Estate advanced Mr Magrath $66,000. Pursuant to a letter from the CEO of MMJ Real Estate the amount advanced to Mr Magrath is a loan with a current balance owing of $55,000.[26] The intention is to apply upcoming commissions against the amount outstanding.
[26] Exhibit 4, Letter from Chris Johnson, CEO MMJ Real Estate, to Mr Magrath dated 17 May 2017.
Mr Magrath also confirmed that he is hoping to make some sales within the next six months which will earn him enough money to enable him to repay the balance of the NSA Debt and Recovery Fee.
In the circumstances, I find that Mr Magrath does have the capacity to pay.
Is it cost-effective for the Commonwealth to recover the debt? (s 1236(1A)(d))
There is no indication from the Secretary that it is not cost-effective for it to recover the debt.
Conclusion
There is no basis for the debt to be written off under section 1236 of the Act.
Did Mr Magrath Receive The Overpayment In Good Faith And Was The Debt, Or A Proportion Of The Debt, Attributable Solely To An Administrative Error? (S 1237A)
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: section 1237A of the Act.
Not Administrative Error
If administrative error was the sole cause for the debt arising, the Secretary must waive the right to recover the debt. The debt “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”: Secretary, Department of Family & Community Services v Sekhon [2003] FCA 76, per Wilcox J (at [41]) and on appeal to the Full Federal Court Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190, at [23].
A recipient of a social security benefit is under an obligation to notify Centrelink of any changes in circumstances that might affect the payment of the social security payment within 14 days after the day on which the event or change occurs: section 66A(2) of the Administration Act.
The Secretary may also give a person, to whom a social security payment is being paid, a notice requiring the person to inform Centrelink if a specified event or change of circumstances occurs: section 68(2), Administration Act.
As referred to earlier, Centrelink sent numerous letters to Mr Magrath setting out his obligations to notify Centrelink if there was any relevant change in his circumstances.
Those notices were addressed and sent to Mr Magrath’s residential address.
As referred to above Mr Magrath says he did inform a person called Gavin at Centrelink at Noosa about his employment terms at Elders and was told he did not need to report anything until his tax returns had been prepared. Mr Magrath did not complete the preparation of his tax returns for the Period until 2015 and Centrelink was not provided with a copy until in or around October 2015. However there was no Centrelink record corroborating Mr Magrath evidence of this conversation.
The first Centrelink record indicating that it became aware of Mr Magrath’s employment at Elders is a record of information received from a third party on 29 May 2013 that Mr Magrath may be defrauding Centrelink because he was working 30-40 hours/week at Elders.[27]
[27] Exhibit 1, T Documents, T42, page 631, Centrelink records.
Even if Mr Magrath was not aware of his obligations to actually notify the Department, ignorance of the legal requirements is not a special circumstance. “Centrelink is not required to advise claimants about their legal rights to any particular social security payment or the rate of payment”.[28]
[28] See Brian Murphy and Secretary, Department of Families, Housing, Community Services and
Indigenous Affairs [2010] AATA 115, at [17]; Ivor Biddlecombe and Secretary, Department of Families,
Housing, Community Services and Indigenous Affairs [2010] AATA 451; Barnard and Secretary, Department of Social Services [2016] AATA 436, at [47]; Scott v Secretary, Department of Social Security [1999] FCA 1774, and on appeal Scott and Another v Secretary, Department of Social Security [2000] FCA 1241
I find that the NSA Debt and Recovery Fee arose due to a failure by Mr Magrath to comply with the relevant notification requirements. As a result the debt owed by Mr Magrath was not ‘attributable solely to an administrative error made by the Commonwealth’ for the purposes of section 1237A(1) of the Act.[29]
[29] See Wecker v Secretary, Department of Education Science and Training[2008] FCAFC 108, at [102].
Should The NSA Debt And Recovery Fee Be Waived Under Section 1237AAD?
Further, the Secretary may exercise its discretion to waive the right to recover all or part of the debt if satisfied that:
1237AAD Waiver in special circumstances
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.
There are a few elements to be satisfied under section 1237AAD before a debt may be waived. First, the debt must not have arisen from the debtor, that is he must not have knowingly made a false statement or a false representation or knowingly failed or omitted to comply with a provision of the Act or the Administration Act. Second, there must be special circumstances (other than financial hardship alone) that make it desirable to waive. Third, it must be more appropriate to waive than to write off the debt or part of the debt.
No Special Circumstances
The Act does not define what constitutes “special circumstances”. However, section 1237AAD(b) does make it clear that financial hardship alone will not constitute a special circumstance.
However, decisions of the Federal Court make it clear that “special” denotes something different from the usual or ordinary.[30]
[30] Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541, at 545 per
Kiefel J, Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267; [2012] FCA 639, at [51], Boscolo v Secretary, Dept of Social Security [1999] FCA 106; (1999) 90 FCR 531, at [18]; Barker J in Kazmierczak v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] FCA 1084, at [37].
French J (as he then was) said in Secretary, Department of Social Security v Hales [1998] FCA 219, at 162:
The concept of special circumstances is broad. A constellation of factors, including financial circumstances, may fall within it. The express exclusion of financial hardship alone as a special circumstance is an indicator that it would otherwise be included. This gives some measure of the range of circumstances which will qualify as special. But as a matter of grammar and ordinary logic, the exclusion of financial hardship alone as a special circumstance does not mandate its inclusion in the range of matters constituting such circumstances for the purpose of enlivening the Secretary's discretion. ... 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.
The AAT has also considered the phrase and held that the interpretation in Beadle and Director-General of Social Security (1984) 6 ALD 1, at [12] (i.e. that the circumstances must be unusual, uncommon or exceptional), applies to the Act.[31]
[31] See Hunnibell and Secretary, Department and Community Services [2004] AATA 992, at [19]; Papps
and Secretary, Department of Family and Community Services [2005] AATA 660, at [37]
Mr Magrath did not raise any special circumstances at the hearing. However, the Secretary noted that in 2012 Mr Magrath was received counselling and treatment from a psychologist, Dr Gordon. Dr Gordon reported in 2012 that as a result of the legal battle Mr Magrath was under extreme distress and required antidepressant medication and psychological intervention because of the severe nature of his symptoms.[32] In September 2014 Mr Magrath told Centrelink that he was going through a difficult separation from his wife and said that he had lost all of his family assets which had impacted heavily on his mental health.[33] However, at the hearing Mr Magrath said he had separated from his wife 6 years earlier in in 2008.
[32] Exhibit 1, T documents, T 38, Report of Dr Emily Gordon dated 17 May 2012.
[33] Exhibit 1, T documents, T 30, pages 178 – 180, Letter from Mr Magrath to Centrelink re-appeal dated
24 September 2014.
In any event, at the hearing Mr Magrath said he was no longer on anti-depressants and said things were “looking better”.
No other special circumstances exist within the meaning of section 1237AAD to warrant the exercise of the discretion in section 1237AAD to waive the debt.
CONCLUSION
Mr Magrath’s appeal fails.
The decision under review is affirmed.

I certify that the preceding 68 (sixty -eight) paragraphs are a true copy of the reasons for the decision herein of Member D K Grigg

.................................[Sgd].......................................
Associate
Dated: 31 July 2017

Date of hearing: 11 July 2017

Solicitors for the Respondent: Jasmine Forsyth
Department of Human Services

[2017] AATA 1165

31 July 2017

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Procedural Fairness

Statutory Construction

Appeal

Natural Justice

Date of hearing:	11 July 2017
Solicitors for the Respondent:	Jasmine Forsyth Department of Human Services