Maracine and Secretary, Department of Social Services (Social security)

Maracine and Secretary, Department of Social Services (Social security) [2025] ARTA 2033 (14 March 2025)

Applicant: Mr Maracine

Respondent: Secretary, Department of Social Services

Tribunal Numbers: 2024/S190836 & 2025/S193584
Tribunal: General Member N Foster
Place:Brisbane
Date:14 March 2025

Decision:The Tribunal varies the decisions under review so that no interest charges are applied to Mr Maracine’s debts to the Commonwealth. The decisions to raise and recover those debts are otherwise affirmed.

CATCHWORDS

SOCIAL SECURITY – debts to the Commonwealth – claimed deception by third parties to claim Centrelink payments – financial hardship – disputed care and custody of children – actual access to payments – waiver of recovery of debts – no interest charges added – decisions under review varied

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted from this decision and replaced with generic information pursuant to subsections 201(1A) of the Social Security (Administration) Act 1999 and 161(1B) of the A New Tax System (Family Assistance) (Administration) Act 1999.

Statement of Reasons

BACKGROUND

This review is about whether Mr Maracine has recoverable debts to the Commonwealth.
Mr Maracine was born in [Country 1] and has lived in Australia since 2007. On 16 June 2016, he made a claim for family tax benefit and child care benefit in relation to four children who were not his own (and whom the Tribunal will refer to simply as the children). As part of this claim, Mr Maracine provided the government agency now known as Services Australia (Centrelink) with a document co-signed by the children’s mother, [Ms A], that stated that he had had the children in his sole care since 1 June 2016. On 26 August 2016, Centrelink granted family tax benefit and child care benefit to Mr Maracine in respect of the children. Mr Maracine was also paid an instalment of schoolkids bonus.
On 18 November 2016, Mr Maracine contacted Centrelink about claiming parenting payment. He later lodged a claim for this payment on 25 November 2016. On the same date, Centrelink granted parenting payment to Mr Maracine from 18 November 2016.
In March 2017, Centrelink reviewed Mr Maracine’s entitlement to his various payments after identifying irregularities with the purported care arrangements for the children and with the large amounts of child care benefit that were being paid for them on a weekly basis. After deciding that Mr Maracine had not had any care of the children since 1 June 2016, Centrelink cancelled his payments and raised debts against him as follows:
·a family tax benefit debt of $2,569.50 for the period 1 June 2016 to 30 June 2016 (raised on 7 March 2017);
·a schoolkids bonus debt of $430.00 in respect of the 30 June 2016 test day (raised on 7 March 2017);
·a family tax benefit debt of $307.00 in relation to the unrecovered balance of an advance paid to Mr Maracine on 2 November 2016 (raised on 28 March 2017);
·a family tax benefit debt of $18,382.26 for the period 1 July 2016 to 24 February 2017 (raised on 2 May 2017);
·a parenting payment debt of $5,379.15 for the period 18 November 2016 to 24 February 2017 (raised on 2 May 2017); and
·a child care benefit debt of $201,215.00 for the period 18 July 2016 to 2 July 2017 (raised on 9 May 2018).
Mr Maracine requested a review and on 4 May 2017 an authorised review officer affirmed Centrelink’s decisions in relation to the parenting payment and schoolkids bonus debts, as well as two of the family tax benefit debts. After Mr Maracine requested a further review in 2022, an authorised review officer decided on 10 February 2022 to affirm Centrelink’s decisions in relation to the child care benefit debt and the other family tax benefit debt.
On 9 September 2024, Mr Maracine applied to the Administrative Appeals Tribunal[1] (the AAT). This application (2024/S190836), for which Centrelink provided documentation in relation to the May 2017 authorised review officer decision, was heard by the Tribunal on 24 January 2025. Mr Maracine and his nephew, [Nephew A], appeared by video from the Sydney registry and gave sworn evidence. For the first hour of the hearing, Mr Maracine gave oral evidence with the assistance of an interpreter in the Dinka language, who appeared by telephone. When this interpreter had to leave the hearing for another commitment, the hearing resumed after a break, with [Nephew A] agreeing to interpret for Mr Maracine. After the hearing, the Tribunal deferred its decision so that it could obtain written submissions from Centrelink. Mr Maracine also provided additional documents. On 6 March 2025, the Tribunal registered an additional application (2025/S193584) in relation to the February 2022 authorised review officer decision. This new application was linked to Mr Maracine’s previous application and the Tribunal decided the matters together.

CONSIDERATION

[1] From 14 October 2024, the AAT became the Administrative Review Tribunal (the Tribunal). Under the transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (the Transitional Act), applications for review to the AAT that were not finalised before 14 October 2024 are taken to be an application for review to the Tribunal. The Transitional Act gives the Tribunal the authority to continue and finalise any aspect of the review not already completed by the AAT.

Evidence and submissions provided to the Tribunal

At the outset of the hearing, Mr Maracine confirmed with the Tribunal that he wanted all of his debts reviewed. In doing so, he said that claims for payment had been made in his name but that he did not receive the money paid for the children. Although the children were under his name with Centrelink, he was not caring for them and did not receive the payments made for them. As he only speaks Dinka and cannot read or write, he did not understand what was going on at the time and accepted what other people told him. He realises now that a bad thing has been done to him but he does not know why.
When asked by the Tribunal about the initial claim for family tax benefit and child care benefit made in 2016, Mr Maracine said that this was lodged in his name at the instigation of the children’s father, [Mr A]. Mr Maracine said that [Mr A] and his partner, [Ms A], lived in the same building in [Town 1] as him (he was in Unit [number] and they were in Unit [number]). Despite suggestions to the contrary in the hearing paperwork, Mr Maracine said that he is not related to either [Mr A] or [Ms A]. [Mr A] had told him that there was a new project with the government where he would be paid to look after the children. Mr Maracine expressed concern about this to [Mr A] as he could not speak English or Arabic, and could not read or write, and did not want to get into trouble with the government. [Mr A] assured him that there would not be any problems and acted as his nominee with Centrelink. [Mr A] dealt with all of the documentation and took Mr Maracine to the Centrelink office whenever this was required. Mr Maracine did not know what was in any of the paperwork and just signed what [Mr A] told him to sign. This was also the case when claims for parenting payment were later made in his name.
When asked by the Tribunal what the actual care arrangements were for the children, Mr Maracine said that they sometimes spent time at his unit, mostly on weekends, but that he was not their full-time carer. He said that the younger children went to family day care five days per week and the older children went to school. He did not take the children to these places and he did not pay any child care fees himself. Although the children sometimes slept at his unit, they also slept at their own unit as it was nearby. Although he is recorded as telling Centrelink that he never had any care at all, he said this was in relation to the children of another person called [Ms B], who Centrelink had asked him about. He told the Tribunal that he has tried to explain to Centrelink that he had some care of the children that he was receiving payments for but, even so, he acknowledged that they were also in the care of [Ms A].
With regard to the payments made by Centrelink for the children, Mr Maracine said that the money was deposited into a [Bank 1] account that he could not access. He said that [Mr A] had made him hand over his card and PIN for this account and that [Mr A] had withdrawn the money. Although Mr Maracine had asked for payments from [Mr A] for caring for the children, he was only given a few lump sums in cash, totalling around $5,500. Mr Maracine’s own newstart allowance payments were paid into a [Bank 2] account, which he had access to. When the Tribunal explained to Mr Maracine that his newstart allowance was paid into his [Bank 1] account, he said that he must be confused and that it was the [Bank 2] account that he had no access to.
Mr Maracine confirmed with the Tribunal that he also wanted the interest charges that had been applied to his debts reviewed. He said that he did not know at the time that Centrelink was charging him interest and that he was unable to read the letters that were sent to him about his debts. Whenever he got a Centrelink letter, he would try and find someone in his community who could read it to him. As he has been too unwell to work, he has not been able to repay his debts and their amounts have increased.
With regard to his current circumstances, Mr Maracine told the Tribunal that he was not healthy or happy anymore because of his debts. He said that he currently sleeps in someone’s garage and has to pay rent for this. As he has problems with his knee and back, he has not worked for several years. His family in [Country 2] is suffering and he is unable to financially support them. His only income is from Centrelink payments. Although his identity documents state that he is [age], he is actually [age range]. He cannot afford to repay money to the Commonwealth and should not owe more than $200,000.
Mr Maracine also provided the Tribunal with additional documents, including a recent [Bank 2] bank statement and a Statement of Financial Circumstances form. In a brief written submission, Mr Maracine stated that he was seeking a review of his case due to ongoing financial hardship and the fact that he was struggling to meet essential living expenses. He stated that “I am a victim of this case” and that his language difficulties may have been a reason for his failure to have the decisions changed. He also stated that he has a wife and [children] in [Country 2] and that he is unable to visit them.
[Nephew A] also gave brief oral evidence to the Tribunal. While he had no firsthand knowledge of what happened to Mr Maracine in 2016 and 2017, he had been told that Mr Maracine was taken advantage of by others due to his lack of English and was left with large Centrelink debts. [Nephew A] said that Mr Maracine was suffering from financial hardship and health issues and should not have to repay so much money to the Commonwealth.
As well as the evidence in the hearing papers, Centrelink provided additional documents and submissions at the direction of the Tribunal. In the latter, Centrelink contended that the payments in question were claimed by, and paid to, Mr Maracine and that he had debts to the Commonwealth, which should be recovered. Centrelink also submitted that Mr Maracine had not provided evidence that supported the conclusion that he was deceived by third parties into claiming Centrelink payments that he did not actually receive.

What was Mr Maracine’s role in the overpayments?

Before addressing whether Mr Maracine has recoverable debts to the Commonwealth, the Tribunal will first make some observations about his assertions that the payments in question were fraudulently claimed on his behalf and that his role in the overpayments was a passive one. As confirmed by the hearing documentation, Mr Maracine’s various claims for payment were made with the assistance of [Mr A], who was his nominee for Centrelink matters at that time and who is also the father of the children. As Mr Maracine states that he cannot read or write English, the Tribunal accepts that it is likely that the paperwork that was provided on his behalf was completed by someone else. Plausibly, this person would be [Mr A], his nominee. Furthermore, references to Mr Maracine in the third person in some documents – such as a care arrangements form of 5 May 2017 – reinforce the likelihood that a person other than Mr Maracine completed them.
Mr Maracine’s assertions about fraudulent conduct are also supported by the amount of child care benefit paid for the children. In the experience of the Tribunal, the payment of more than $200,000 in a period of less than 12 months is extraordinarily irregular. Indeed, this seems to be one of the things that triggered the review by Centrelink in March 2017 that put a stop to Mr Maracine’s payments. While the hearing paperwork did not disclose what happened to the family day care provider that charged the fees for the children, publicly available information indicates that compliance action was taken by the Commonwealth in May 2017.[2] In its written submissions after the hearing, Centrelink confirmed that child care benefit approval was cancelled for the provider, [Business 1], for contraventions of the family assistance law, including a failure by the provider to comply with its obligation to provide accurate information. These contraventions related to more children that those for whom payments were made in the name of Mr Maracine. As there is no evidence establishing that Mr Maracine was involved with the family day care provider, the Tribunal infers that at least one other party was involved in the deception that has led to the debts under review.
[2] [Source deleted.]
In assessing the veracity of Mr Maracine’s account, the Tribunal is also mindful that he has been asserting that he has been the victim of fraud since at least 2022. Although he had requested a review of his debts before then, he was being represented at that time by [Mr A], one of the people that Mr Maracine now contends was responsible for his predicament. As such, it makes sense that Mr Maracine’s assertions about fraud would only have been raised later, when he was speaking to Centrelink on his own behalf.
While such matters suggest that there may well be truth in Mr Maracine’s assertions, it is difficult for the Tribunal to establish what this truth actually is given that his version of events has continually changed. Even at the hearing, Mr Maracine would present one account of what happened then would later contradict it. As the Tribunal will later outline, the inconsistencies in Mr Maracine’s account over time have included the extent to which he did, or did not, have care of the children and the sums of money that he received in relation to them. Troublingly, Mr Maracine has also made assertions about being unable to access particular bank accounts in his name, when objective evidence indicates that he actually used those accounts. This includes a [Bank 2] account for which Mr Maracine himself provided a current bank statement after the hearing.
In light of such inconsistencies, it is difficult for the Tribunal to be satisfied with certainty the extent to which Mr Maracine was responsible for obtaining the various payments for which debts have been raised. Even if, as he now contends, he signed paperwork at the behest of others without properly understanding the content of it, this does not of itself relieve him of the responsibility for repaying the large sums of public money that were paid in his name. In determining whether Mr Maracine has recoverable debts to the Commonwealth, the Tribunal will now consider each of the various payments in turn.

Are there debts of family tax benefit and schoolkids bonus?

At the time in question, a person needed to have care of an FTB child to be eligible for family tax benefit under section 21 of the A New Tax System (Family Assistance) Act 1999 (the FA Act). To be an FTB child, section 22 of the FA Act required that a child be in the person’s care and that the person have legal responsibility for the child, or care under a family law order or parenting plan, or that the child not be in the care of any other person with legal responsibility. Although care of a child could be shared between adults, a person needed to have at least 35% care to be paid family tax benefit – see section 25. Under section 35UA of the FA Act, a person could also be eligible for schoolkids bonus for a child if they were entitled to family tax benefit for that child.
Under Part 4 of the A New Tax System (Family Assistance) (Administration) Act 1999 (the FAA Act), incorrectly paid amounts of family tax benefit and schoolkids bonus were debts due to the Commonwealth. In particular, subsection 71(1) of the FAA Act stated:
No entitlement to amount
(1) If:
(a) an amount has been paid to a person by way of family tax benefit, stillborn baby payment, single income family supplement or schoolkids bonus (the assistance) in respect of a period or event; and
(b) the person was not entitled to the assistance in respect of that period or event;
the amount so paid is a debt due to the Commonwealth by the person.
With advances of family tax benefit, subsection 71A(1) of the FAA Act similarly stated:
No entitlement to advance
(1) If:
(a) a family tax benefit advance has been paid to an individual; and
(b) the individual was not entitled to the advance;
the amount so paid is a debt due to the Commonwealth by the individual.
In Mr Maracine’s case, he was paid family tax benefit, schoolkids bonus and a family tax benefit advance for the children on the basis that he had had 100% care of them since 1 June 2016. In subsequently raising debts against Mr Maracine, Centrelink has determined that he had no entitlement to the payments because the children were not in his care.
There is conflicting evidence before the Tribunal about the extent to which Mr Maracine had the children in his care during the period in question. Even at the hearing, Mr Maracine presented an account of events that was contradictory, asserting both that he did, and did not, have care of the children during the period in question. The confusing nature of Mr Maracine’s account reflects inconsistencies set out in the Centrelink documentation.
In relation to the latter, the Tribunal notes that a claim for family tax benefit was first made in Mr Maracine’s name on 16 June 2016. In the claim form, Mr Maracine is stated to have had care of the children since 1 June 2016. In a care arrangements form provided on 29 July 2016 – which was signed by both Mr Maracine and [Ms A] – he was likewise stated to have had 100% care since 1 June 2016. Similar information was also provided when a claim for parenting payment was made in his name on 25 November 2016.
In March 2017, Centrelink reviewed Mr Maracine’s entitlement to his payments, having identified that he and [Ms A] were living in the same unit complex and that up to 10 hours per day of child care usage was being recorded (including on weekends) for the children, at least one of whom was of school age. In a Centrelink computer document dated 7 March 2017, an officer’s contact with Mr Maracine is described as follows:
When phone customer 7/3/17 and said was doing a review of children in care, he said didnt speak much English, but he didnt have any children in his care and told him to go to his local office to claim another payment as was cancelling his payments and understood.
Based on this contact, Centrelink retrospectively cancelled Mr Maracine’s payments for the children and commenced raising debts against him. However, shortly afterwards, Mr Maracine is recorded as requesting a review on the basis that he had had the children in his care. A new claim for parenting payment was lodged in his name on 23 March 2017, for which identity documents for the children were provided. In addition, there was a letter dated 22 March 2017 from [Agency 1], which relevantly stated:
We confirm we provided legal advice to [Ms A] today.
We are instructed that the following children are being cared for by her uncle, [Mr Maracine], and she visits them on the weekends. The children living with [Mr Maracine] are: [the names of the four children are then listed]

On 4 May 2017, an authorised review officer affirmed Centrelink’s decision to raise certain debts against Mr Maracine, finding that he did not have the children in his care. Although the authorised review officer was unable to contact Mr Maracine, they spoke with the real estate agents who managed the properties where Mr Maracine and [Ms A variant] lived. According to the notes made by the authorised review officer, the agent for Mr Maracine’s property advised that it was a two-bedroom unit and that Mr Maracine lived there alone and that there were no children living with him at any stage. The agent for [Ms A’s] property likewise advised that [Ms A] and her partner had definitely had four children in their care since the start of their tenancy, as well as a newborn child more recently.
Shortly after this authorised review officer’s decision, another care arrangements form was lodged with Centrelink. In this form, which was dated 5 May 2017 and which was again signed by Mr Maracine and [Ms A], it was repeatedly stated that each child spent the weekend with their mother but that each “sleeps at [Mr Maracine’s] house”. At the conclusion of the form, Mr Maracine’s level of care was described in the following terms:
Children have lived with me since the 1/6/2016
Only see mother during the day on weekends.
This form was accompanied by a handwritten note dated 4 May 2017 from [Ms A], in which she stated that she “has given four kids to [Mr Maracine] … to take a full care of them”. She further stated that “I just only see them over weekend” and that the children had been in Mr Maracine’s care “since 01/6/2016 up to now and I want them to stay in [his] care”.
According to a Centrelink computer document dated 13 January 2022, Mr Maracine again requested a review of his debts at this point, stating that he had not received most of the payments in question. The account of events set out in this document is difficult to follow as it is in disjointed English. On the Tribunal’s reading of the document, Mr Maracine asserted that he had been told by [Ms A] and [Mr A] that he had a job from the government to take care of the children. Mr Maracine had provided details of a bank account for the purpose of his Centrelink claims but did not access this account himself. Instead, [Mr A] withdrew money from it and, despite queries from Mr Maracine, only ever passed on two sums of $3,000 and $1,500. Mr Maracine later discovered that [Mr A] had falsely asserted to Centrelink that he had been living with Mr Maracine for a period of time. With regard to the care of the children, Mr Maracine did not explicitly deny that he had had care of them during the period in question; rather, he stated that he had only told Centrelink that he was not taking care of the children of a person called [Ms B].
When his case was reviewed again by an authorised review officer in February 2022, Mr Maracine indicated that he did look after the children. In particular, the notes of the authorised review officer dated 8 February 2022 state that Mr Maracine advised as follows:
He said that [Mr A] is his PPE [person permitted to enquire] and he relies heavily on [Mr A] to take care of these things as his English is very limited and he doesn’t understand how things work. [Mr A] is the one that told him to sign papers and lodge a claim and he said that he has looked after the children and the parents live somewhere else. Explained that the care he is providing is not for the purpose of FTB as it is more of a child care capacity. Customer claimed of fraud that was done using his name because he didn't know anything, he authorised [Mr A] to be his PPE. Apparently, [Mr A] took his name down as the carer of the children and he went with what he was advised … Customer also referred to another person – [Ms B] – and how a fraudulent claim was underway but we helped put a stop to it. Customer said that he never received monies regarding him providing care for the children and asked that I check the bank details and the number of children he supposedly took care of …
However, in a more recent Centrelink computer document dated 21 August 2024, Mr Maracine is recorded as stating that he had never had the children at all:
CUS advised that he has previously stated that their FTB/CCS/PPS debts have been created due to payments being fraudulently obtained under his name. CUS has indicated that his friend of the family "[Mr A]" was helping him at the time due to his lack of English both verbally and written. CUS said that he trusted that [Mr A] was looking after his best interests, so when he was asked to sign something, he did. CUS advised that [Mr A] obtained these Centrelink payments by claiming them under his (CUS's) name. CUS advised that he NEVER had any children in his care. CUS advised that all documentation that has been supplied to Centrelink, including the letter from [Agency 1] advising that the children are in his care during the week, are all incorrect. CUS informed that [Mr A] had access to his bank account by using his PIN as he was told this was a normal thing that Australian's do. CUS advised that the bank account that all these payments were going into was not an account he knowingly opened himself. CUS advised that as far as he was aware, he was only on Newstart/Jobseeker at that time, and that was being deposited into a completely different bank account and bank institution. CUS advised that he had spoken to [Agency 1] about the fraudulent activity and was advised that it's his fault due to signing the paperwork to open the bank account and there was nothing he could do. CUS had no idea about any of this until he received his first debt notice. CUS advised that they are going to speak with the police and make a statement so that they have an event number …
In attempting to reconcile the inconsistencies in the evidence, the Tribunal is mindful that Mr Maracine is unable to speak English and that he had difficulty at the hearing, even with the assistance of an interpreter, in communicating what precisely happened with the children more than eight years ago. Having pressed Mr Maracine on the details of his account, it appears to the Tribunal that some of the confusion arises from the different interpretations that can be given to the word “care”. In particular, whereas Centrelink has focused on whether Mr Maracine had the requisite level of full-time care and legal responsibility for the children to qualify for payments under the FA Act, Mr Maracine seems to have viewed care in terms of whether the children were ever under his supervision. As the Tribunal understands Mr Maracine’s version of events – convoluted and contradictory, as it is – he asserts that he had some “care” of the children during the period in question in the sense that he did informal child-minding from time to time. At the same time, he was never the children’s full-time carer or guardian and says that any assertions to that effect in the claim paperwork were false and were made by others without him understanding what was going on. Insofar as Mr Maracine is said to have denied ever having any care at all, the Tribunal also notes there has been some confusion on his part about which children he was being asked about, given that there are also references in the hearing paperwork to another parent called [Ms B].
Taking these matters into account, the Tribunal finds that, while Mr Maracine may have had some informal care of the children during the period in question, he never had full-time care or responsibility of the sort that entitled him to payment for the children under the FA Act. Accordingly, the Tribunal concludes that Mr Maracine was not entitled to the family allowance and schoolkids bonus that he was paid for the children in 2016 and 2017.
Given that Mr Maracine contends that he did not receive these payments, the Tribunal must next consider whether those payments were actually paid to him. This matter is important given that a person only has debts to the Commonwealth under subsections 71(1) and 71A(1) of the FAA Act if the payments were paid to them.
On this issue, the Tribunal notes that Centrelink has provided details of the payments that were made for the children during the period in question, as well as details of the bank account into which those payments were paid. This material indicates that the schoolkids bonus and family tax benefit for the children (including the advance payment made in November 2016) were paid into a [Bank 1] account in Mr Maracine’s name. This was also the same [Bank 1] account into which his newstart allowance was paid during that period.
In disputing his receipt of the payments for the children, Mr Maracine initially told the Tribunal that they were made into his [Bank 1] account, whereas he could only access the [Bank 2] bank account into which his newstart allowance was paid. When the Tribunal explained to Mr Maracine that the Centrelink records showed that the payments were not made to him in this way, he said that he must have got the two bank accounts confused. When asked if he had any evidence that showed that he could not access bank accounts in his name, Mr Maracine admitted that he did not.
In assessing whether Mr Maracine was paid the family tax benefit and schoolkids bonus for the children, the Tribunal is mindful that these payments were made into a [Bank 1] account that was in his name. This was also the same bank account into which his newstart allowance was paid and which he acknowledges he had access to. In such circumstances, the Tribunal finds that the amounts of family tax benefit and schoolkids bonus that should not have been paid for the children were paid to Mr Maracine.
As set out in the hearing documentation, Centrelink has calculated that Mr Maracine was incorrectly paid $2,569.50 in family tax benefit for the period 1 June 2016 to 30 June 2016, $18,382.26 in family tax benefit for the period 1 July 2016 to 24 February 2017 and $430 in schoolkids bonus for the qualification date of 30 June 2016. Mr Maracine had also not repaid $307 towards a family tax benefit advance that had previously been granted to him in November 2016. The Tribunal accepts that these figures are correct and finds that Mr Maracine has debts due to the Commonwealth under subsections 71(1) and 71A(1) of the FAA Act in the amounts calculated by Centrelink.

Is there a debt of child care benefit?

At the time in question, a person could be eligible for child care benefit under Part 4 of the FA Act if they had an FTB child for which they were paying child care fees. Under Part 4 of the FAA Act, incorrectly paid amounts of child care benefit were debts to the Commonwealth. In particular, subsection 71B(1) of the FAA Act relevantly stated:
(1) If:
(a) an approved child care service is required under section 219B to pass an amount on to an individual (the recipient) in respect of one or more sessions of child care provided by the service to a child, but the recipient was not entitled to child care benefit in respect of the session or sessions of care; or
(b) an approved child care service is required under section 219BA to pass an amount on to itself (the recipient) in respect of one or more sessions of child care provided by the service to a child at risk, but the recipient was not entitled to child care benefit in respect of the session or sessions of care; or
(c) an amount has been paid to a person (the recipient) by way of child care benefit in respect of a period, but the recipient was not entitled to child care benefit in respect of that period; or
(d) an approved child care service is required under section 219EA to pass on an amount to an individual (the recipient) in respect of care provided for a child by the service in a week, but the recipient was not entitled to child care rebate in respect of the week;
the amount so paid is, subject to section 71F, a debt due to the Commonwealth by the recipient.
As can be seen, subsection 71B(1) of the FAA Act is subject to section 71F. Under the latter section, if a debt is also owed by a child care service under section 71E of the FAA Act due to a false or misleading statement by the child care service then no debt is owed by the person for any overlapping portion of the debt. In its written submissions after the hearing, Centrelink confirmed that the Commonwealth has not taken any action to recover child care benefit from the child care provider, [Business 1]. As such, the Tribunal must consider whether there is a debt owed by Mr Maracine.
In this regard, a person will have a debt under paragraph 71B(1)(a) of the FAA Act if an approved child care service was required under section 219B to pass on a fee reduction for child care provided by the service and the person was not entitled to child care benefit. Under section 219B, a child care service is obliged to pass on a fee reduction to a person where Centrelink has determined that this should be done. In Mr Maracine’s case, his online claim form dated 16 June 2016 indicated that “I would like my Child Care Benefit paid to my child care service to reduce my fees”. During the period in question, the child care provider notified Centrelink that child care fees were being charged for the children in Mr Maracine’s name and Centrelink determined that the provider was required to pass on amounts of child care benefit to him by way of fee reduction. As Mr Maracine did not have an FTB child in his care and he was not entitled to the child care benefit that was passed on by way of fee reduction, the Tribunal finds that the amount of child care benefit that was paid to him is a debt due to the Commonwealth.
As to what constitutes the amount of child care benefit paid to Mr Maracine, the Tribunal notes that he stated at the hearing that he did not pay any child care fees for the children. This is consistent with information provided by Centrelink after the hearing, which confirmed that the child care benefit in question was paid directly to the provider, that Mr Maracine did not have any out-of-pocket expenses and that Centrelink had no evidence that he personally paid child care fees. While this brings into question whether Mr Maracine benefited from the reduction in child care fees – particularly given his assertions that he was unaware of what was really going on with the children – subsection 68(1) of the FAA Act states that the amount of child care benefit paid to a person is the amount of the entitlement paid to the person. Subsection 68(1A) further states that the amount of the entitlement paid to a person includes the amount that a child care provider is required to pass on to the person by way of fee reduction under section 219B of that Act.
Given these definitions in section 68 of the FAA Act, the Tribunal finds that the child care benefit entitlement that the family day care provider was required to pass on to Mr Maracine must be taken to have been paid to him. As Mr Maracine was not entitled to this child care benefit – which Centrelink has calculated totalled $201,215 – the Tribunal finds that it is a debt due to the Commonwealth by Mr Maracine under subsection 71B(1) of the Act.

Is there a debt of parenting payment?

At the time in question, a person had to have at least one PP child to be eligible for parenting payment under section 500 of the Social Security Act 1991 (the SS Act). Under section 500D, a child was a PP child if the person was their principal carer. As defined in section 5 of the SS Act, this required the person to have care and legal responsibility of the child similar to that needed for an FTB child under the FA Act. With regard to overpayments of parenting payment, subsection 1223(1) of the SS Act stated:
(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.
As Mr Maracine did not have the requisite level of care or legal responsibility for the children during the period in question, the Tribunal finds that he was not qualified for parenting payment. However, the question again arises as to whether Mr Maracine was paid amounts for the children. In particular, for there to be a debt to the Commonwealth under subsection 1223(1) of the SS Act, Mr Maracine needed to have obtained the benefit of the parenting payment that was paid for the children.
Although the term “obtains the benefit of the payment” is not defined in the SS Act, it was observed in Segran and Secretary, DEEWR and Anor [2008] AATA 799:
The use of the expression “a person who obtains the benefit of the payment” rather than simply “a person who obtains the payment” suggests a requirement that the person is in some way advantaged – better off, or in an improved state – by the fact of the payment. Ordinarily a person into whose account a payment is made will obtain the benefit of the payment, by being immediately entitled to use the money that it represents for his or his own purposes …
The documentation before the Tribunal indicates that the parenting payment that was paid for the children went into a [Bank 2] bank account in the name of Mr Maracine. This account was different to the one into which his newstart allowance and family assistance payments were made and which the Tribunal has found he had access to. After the hearing, Centrelink advised the Tribunal that its records do not show that bank accounts in Mr Maracine’s name were ever used by another person, including either [Mr A] or [Ms A]. As already noted, Mr Maracine admitted that he did not have any evidence that showed that he was unable to access the [Bank 2] account. To the contrary, the documentation that he provided to the Tribunal after the hearing indicates that he is currently using the [Bank 2] account and that it is where his jobseeker payment is now being paid.
Given that parenting payment was paid into a bank account that was in Mr Maracine’s name and that he is currently able to use, the Tribunal is satisfied that he obtained the benefit of the parenting payment that was paid into that account. The Tribunal therefore concludes that this amount – which Centrelink has calculated totalled $5,379.15 – is a debt due to the Commonwealth under subsection 1223(1) of the SS Act.

Should interest charges be applied to the debts?

Under subsection 78(1) of the FAA Act and subsection 1229A(1) of the SS Act, a person is liable to pay, by way of penalty, an interest charge on a debt if they have been issued with a debt notice and have not entered into a repayment arrangement by the due date. Under section 78E of the FAA Act and section 1229F of the SS Act, a decision-maker may determine that interest is not payable if satisfied that the person had a reasonable excuse for failing to enter into a repayment arrangement.
As set out in the hearing papers, Centrelink has added interest charges to each of the debts under review. In its written submissions after the hearing, Centrelink stated that these interest charges had been applied because Mr Maracine did not have a payment arrangement in place during the period 17 November 2018 to 14 March 2019. Mr Maracine was sent letters on 16 November 2018, 19 November 2018, 23 November 2018 and 18 December 2018 advising that an interest charge would be, or had been, applied on the grounds that he had not paid the outstanding debt amounts, made the agreed repayments or entered into a payment arrangement. Having checked the charges that had been applied, Centrelink was satisfied that they had been correctly calculated.
As previously outlined, Mr Maracine told the Tribunal that he did not know that Centrelink was charging interest on his debts and that he could not read the letters sent to him. He also described how he tried to get members of his community to read letters for him. In speaking with Mr Maracine – even with the assistance of an interpreter – it was readily apparent that he has difficulty understanding information about social security payments and the way that the Centrelink system operates. This is entirely understandable given Mr Maracine’s personal background and the cultural and language barriers he faces. As such, the Tribunal considers that Mr Maracine’s situation is materially different to that of a payment recipient who is readily able to understand Centrelink correspondence and who declines to enter into a repayment arrangement for their debts.

Given the mitigating factors in Mr Maracine’s case, the Tribunal is satisfied that he had a reasonable excuse for not entering into a repayment arrangement during the period in question. In accordance with the discretion available to it under section 78E of the FAA Act and section 1229F of the SS Act, the Tribunal finds that no interest charges should be added to any of the debts under review.

Should the debts be recovered?

The final matter that the Tribunal must consider is whether Mr Maracine’s debts should be recovered. The FAA Act and SS Act provide that, in certain limited circumstances, recovery of debts can be waived – or, in other words, permanently not recovered. In particular, section 101 of the FAA Act provides that recovery of family assistance debts may be waived in special circumstances as follows:
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 the family assistance law; 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.

Section 1237AAD of the SS Act provides for waiver of recovery of debts of social security payments in similar terms.

In determining whether recovery of Mr Maracine’s debts should be waived under section 101 of the FAA Act and section 1237AAD of the SS Act, the Tribunal is mindful that the existence of special circumstances is not of itself the sole requirement for waiver. As set out in the first paragraph of each section, the debt must not have resulted, either wholly or partly, from the debtor or another person knowingly making a false statement or representation, or knowingly failing to comply with their statutory notification obligations.
In Mr Maracine’s case, he has argued that he should not have to repay his debts because they are due to the dishonest actions of other people. Even if the Tribunal were to accept that Mr Maracine himself did not act dishonestly, it necessarily follows that another person was responsible for making the knowingly false statements to Centrelink that resulted in the overpayment of large sums of public funds. In its written submissions after the hearing, Centrelink contended that the debts under review cannot be waived because they were due to the debtor or another person knowingly making a false statement or a false representation. On the evidence before it, the Tribunal accepts that this was the case. Accordingly, the Tribunal concludes that recovery of Mr Maracine’s debts cannot be waived under section 101 of the FAA Act or section 1237AAD of the SS Act, regardless of whether the circumstances of his case are special or not.
Having considered the other waiver provisions in the FAA Act and the SS Act, the Tribunal is satisfied that none of those provisions have application in Mr Maracine’s case. This means that, regardless of who was responsible for falsely obtaining payments from the Commonwealth, recovery of Mr Maracine’s debts cannot be waived.
The Tribunal has alternatively considered whether recovery of Mr Maracine’s debts can be written off – or, in other words, temporarily not recovered. In this regard, section 95 of the FAA Act and section 1236 of the SS Act provide that recovery of a debt may be written off if, and only if, one of four specific situations exists. These are that the debt is irrecoverable at law, that the debtor has no capacity to repay the debt, that the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate them or that it is not cost effective for the Commonwealth to take action to recover the debt.
In Mr Maracine’s case, the only potential basis for write off is that he has no capacity to repay his debts. Under subsection 95(4) of the FAA Act and subsection 1236(1C) of the SS Act, a person is taken to have no capacity to repay a debt if recovery by way of withholdings from their social security payments would result in them being in severe financial hardship. According to information provided by Centrelink, Mr Maracine has been repaying his debts in instalments since August 2017. Most recently, he was repaying $115.75 per fortnight – a level of repayment above the standard rate – with recovery being paused in September 2024 as a result of his application to the Tribunal.
After the hearing, Mr Maracine provided the Tribunal with a number of documents that referred to his current financial position. This material included a [Bank 2] bank statement, which indicated that he had been receiving jobseeker payment of either $751.30 or $788.30 per fortnight as at January 2025. The bank statement also disclosed transfers from the [Bank 2] account to another bank account. The balance of Mr Maracine’s [Bank 2] account was $4.31 as at 13 January 2025. Mr Maracine also provided an income statement from Centrelink dated 15 January 2025, which indicated that his current gross entitlement to social security payments was $869.35 per fortnight. In a partially completed Statement of Financial Circumstances form, Mr Maracine listed various expenses totalling $855, although it was unclear which period the expenses related to.
While it is clear that Mr Maracine does not have the financial capacity to repay the more than $220,000 that he owes the Commonwealth, he has previously been able to make debt repayments in instalments. For recovery of his debts to be written off, the Tribunal needs to be satisfied that he has no capacity to repay his debts. On the evidence before it, the Tribunal is not satisfied that this is the case. It follows that recovery of Mr Maracine’s debts cannot be written off under subsection 95(4) of the FAA Act or subsection 1236(1C) of the SS Act.
The Tribunal is satisfied that none of the other non‑recovery provisions in the FAA Act or SS Act apply. It follows that Mr Maracine’s debts, without any interest charges, must be recovered.

DECISION

The Tribunal varies the decisions under review so that no interest charges are applied to Mr Maracine’s debts to the Commonwealth. The decisions to raise and recover those debts are otherwise affirmed.

Date of hearing:

Friday, 24 January 2025

[2025] ARTA 2033

14 March 2025

Key Legal Topics

Areas of Law

Administrative Law

Social Security Law

Legal Concepts

Jurisdiction

Unconscionable Conduct

Restitution

Account of Profits

Civil Penalty