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

[2022] AATA 406

Martin; Secretary, Department of Social Services and (Social services second review) [2022] AATA 406 (7 March 2022)

Division:GENERAL DIVISION

File Number(s):      2020/8099, 2020/8101

Re:Secretary, Department of Social Services

APPLICANT

AndCarol Martin

RESPONDENT

DECISION

Tribunal:Mr. Rob Reitano, Member

Date:7 March 2022

Place:Sydney

I set aside the decision under review and remit the matter to the Secretary to recalculate the debts owed by Dr. Martin on the basis that her income for the purpose of s.8 of the Act for the period 26 March 2010 to 20 December 2018 includes the following amounts:

(a)income earned from Dr. Martin’s employment;

(b)scholarship payments received after 7 August 2015;

(c)the amounts paid to Dr. Martin by Mr. & Mrs. Wilkinson totalling $120,869.43

(d)the amounts paid to Dr. Martin by Mr. Mirovic and Mr. Martin totalling $6450;

(e)the income earned by Mr. Mirovic in his employment;

and does not include:

(f)the amount of legacies totalling $20,067.79; and

(g)the amounts received from the sale of shares totalling $18,664.70

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

Mr. Rob Reitano, Member

CATCHWORDS

SOCIAL SECURITY – Austudy – Newstart – Overpayment of Austudy – Overpayment of Newstart – Whether payments classified as income – Whether exception to income character applies – Debt due to Commonwealth – Whether overpayment attributable to sole administrative error – Whether debt should be waived for unusual circumstances – Decision set aside and remitted.

LEGISLATION

Social Security Act 1991

Social Security Administration Act 1999 s 66A

CASES

Clack v Secretary Department of Social Security [1998] AATA 80

Kelleners v Secretary to the Department of Social Security [1988] FCA 3397
Marsh v Secretary Department of Social Security (1986) 12 FCR 100
Read v The Commonwealth [1988] HCA 26
Secretary, Department of Social Security v Davies [1997] FCA 1024
Secretary, Department of Social Security v Garvey (1989) 22 FCR 132  
Secretary, Department of Social Security v McLaughlin [1997] FCA 1456

Sexthon v Secretary, Department of Family and Community Services [2003] FCFCA 190

REASONS FOR DECISION

Mr. Rob Reitano, Member

7 March 2022

1. This case is about whether Carol Martin (Dr. Martin) has a debt to the Commonwealth because she was overpaid social security benefits known as Newstart Allowance and Austudy (‘the relevant benefits’) which resulted from her receipt of income that was not included in the calculation of her entitlement to the relevant benefits paid to her between 26 March 2010 and 20 December 2018.

   BACKGROUND

2. On 20 November 2009 Dr. Martin started being paid Austudy with her payments being backdated to 1 November 2009. After about May 2010 until about March 2018 Dr. Martin received payments of either Newstart Allowance or Austudy at various times, but which of the two benefits she was receiving is immaterial for present purposes.

3. In March 2018 a review was commenced by Services Australia into the payments that had been made to Dr. Martin. Services Australia activated some of its powers to obtain information about Dr. Martin’s income and assets by issuing notices to the University of Newcastle (University) and the Commonwealth Bank.

4. On 17 August 2020 an Authorized Review Officer (ARO) affirmed a decision made by another officer that Dr. Martin was overpaid Newstart Allowance for the period 9 April 2010 to 20 December 2018 totalling $33,171.74 and was overpaid Austudy benefits for the period 26 March 2010 to 29 November 2013 in an amount of $32,428,84. The ARO found that both debts were owed to the Commonwealth and that they were recoverable from Dr. Martin.

5. The ARO proceeded on the basis that there was income that had not been made known to the Secretary which if the Secretary had known of it would have meant a lower level of payment of either Newstart Allowance or Austudy to Dr. Martin. Two payments received by Dr. Martin, one a legacy of $20,067.79 and the other the consequence of the sale of some shares for $18,664.70 were included in the ARO’s decision as unnotified income. The Secretary concedes those amounts should not be treated as income and no longer suggests that they should be. To avoid doubt I have excluded them from any calculation of the debt owing in my decision.

6. On 2 November 2020 the Administrative Appeal Tribunal (Social Services and Child Support Division) (AAT1) dealt with a review of the ARO’s decision and set that decision aside. AAT1 directed that the matter be returned to Services Australia for reconsideration in accordance with directions that Dr. Martin’s income be calculated by reference to employment income, the employment income of Mr. Mirovic, who was her partner for some time, and her scholarship income and that so much of her debt as arose during the period when her scholarship income was not included in the calculation of her payments be waived.

7. The Secretary has asked the Tribunal to review the decision of AAT1 and having done so I have decided to set aside the decision of AAT1 and return the matter to Services Australia for further consideration with some directions. These are my reasons for that decision.

   ISSUES

8. The first issue concerns what payments received by Dr. Martin from 26 March 2010 until 20 December 2018 should have been treated as income for the purpose of calculating Dr. Martin’s entitlement to the relevant benefits.

9. There are five categories of payments received by Dr. Martin that the Secretary says should be treated as income. They are: first, amounts received by Dr. Martin from her parents, Mr. and Mrs. Wilkinson, that were contained in a record kept by her parents; second other amounts that were received by Dr. Martin from her parents not contained in the record; third, Dr. Martin’s employment income; fourth, money received by Dr. Martin from her ex-husband and subsequent partner; and fifth, scholarship payments that Dr. Martin received after 7 August 2015. Dr. Martin concedes that the money she and her partner earned from employment and the scholarship payments received after 7 August 2015 were income for the purpose of calculating the amount of the relevant benefits payable to her.

10. The second issue is whether any debt owed to the Commonwealth by Dr. Martin that may have resulted from the alleged overpayment of the relevant benefits to Dr. Martin is unable to be recovered as it was attributable to the sole administrative error by the Commonwealth and was received in good faith by Dr. Martin.

11. The third issue is whether, if there is a debt, should the right to recover it be waived because of s.1237AAD of the Social Security Act 1991 (Act).

12. I will deal with each of the issues in turn and within each issue will direct attention to the different kinds of payments and the facts relevant to that issue where necessary.

    WHAT MONEY RECEIVED BY DR. MARTIN WAS INCOME?

13. The definition of ‘income’ and ‘income amount’ in s.8 of the Act at the time that Dr. Martin was receiving the relevant benefits provided so far as is relevant:

    (1) In this Act, unless the contrary intention appears:

    …

    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

    (b) a periodical payment by way of gift or allowance; or

    (c) a periodical benefit by way of gift or allowance;

    but does not include an amount that is excluded under subsection (4), (5) or (8).

    …

    income amount means:

    (a) valuable consideration; or

    (b) personal earnings; or

    (c) moneys; or

    (d) profits;

    (whether of a capital nature or not).

    …

    Excluded amounts – home equity conversion (not member of a couple)

    (4) If a person is not a member of a couple, an amount paid to or on behalf of the person under a home equity conversion agreement is an excluded amount for the person to the extent that the total amount owed by the person from time to time under home equity conversion agreements does not exceed $40,000.

    Excluded amounts – home equity conversion (member of a couple)

    (5) If a person is a member of a couple, an amount paid to or on behalf of the person or the person’s partner under a home equity conversion agreement is an excluded amount for the person to the extent that the total amount owed by the person and the person’s partner under the home equity conversion agreements from time to time does not exceed $40,000.

    …

    (8) The following amounts are not income for the purposes of this Act:

    …

    (j) a payment made to the person for or in respect of a dependent child of the person;

    …

    (z) a periodical payment by way of gift or allowance, or a periodical benefit by way of gift or allowance, from a parent, child, brother or sister of the person;

    Note: the rule in paragraph 8(8)(z) is reversed in Youth Allowance Rate Calculator (point 1067G-H21), Austudy Payment Rate Calculator (point 1067L-D15), Benefit Rate Calculator B (point 1068-G5) and the Parenting Allowance Rate Calculator (point 1068B-D5). Points 1067G-H21, 1067L-D15, 1068-G5 and 1068A-D6 are contrary intentions (see the opening words in subsection 8(1) and the definition of income in that subsection).

14. The Act was amended on 1 July 2017 by the Social Services Legislation Amendment (Simplifying Student Payments Act) 2017 in a way that may have affected this case if payments made by Mr. and Mrs. Wilkinson were made after 1 July 2017, but none of them were so it is unnecessary to take that matter further.

15. Whether something is ‘income’ or an ‘income amount’ depends upon the definition in s.8 of the Act, especially having regard to the fact that the word ‘means’ rather than ‘includes’ has been chosen by the legislature to define the word ‘income’; the word abandons its ordinary meaning in favour of its statutory meaning because of the legislature’s resort to that statutory tool.

16. Sub-section 8(1)(a) defines ‘income’ to mean ‘an income amount earned derived or received by the person for the person’s own use or benefit’. The phrase ‘income amount’ is in turn defined to ‘mean’ amongst other things ‘moneys’. It follows that ‘income’ is ‘moneys’ a person receives for their own use or benefit.

17. In Secretary, Department of Social Security v McLaughlin [1997] FCA 1456 (McLaughlin) French J said:

    The definitions of "income" and "income amount" in the Social Security Act 1986 indicate that like their statutory predecessors they are of wide application. This meets the public policy requirement that "public expenditure is directed to those who stand in actual need of the periodic support which income-related pensions provide" - Read v The Commonwealth [1988] HCA 26; (1989) 167 CLR 57 at 69 (Brennan J). The purpose of the applicable provisions of the Act is to "maintain a basic level of income for those who [are] unable to receive sufficient income to provide for themselves" - Secretary, Department of Social Security v Garvey (1989) 22 FCR 132 at 136.

    . . .

    What the Tribunal has sought to do and the Court is invited now to do is to read down the definition of "income" and "income amount". That reading down involves not just a choice of meanings to be attributed to the existing words of the definitions but the introduction into the definitions of words of limitation which the legislature has not seen fit to enact.

    The definition of "income" extends to income amounts "received" by a person. There is no requirement in the Act that such amounts are received in exchange for anything. They may therefore extend to gifts. This is reinforced by the extension of the definition of "income" to "a periodical payment by way of gift or allowance".

    There is no requirement in the definition for the payment received to constitute a net gain. Absent such a requirement a payment of money received by a person for that person's own use or benefit is a payment of an income amount. No doubt examples may be generated and multiplied of apparently startling or unfair results of this construction. The receipt of the proceeds of the sale of a house or a lottery win may constitute "income" for the purposes of the Act. Such debates, however, are best reserved for the legislature. There is, in my opinion, no room in the language of the definitions of "income" and "income amount" for the kind of construction adopted by the Tribunal. (emphasis added)

18. Those observations in McLaughlin confirm that is not for the Tribunal to read down or introduce words of limitation into the statutory definition of ‘income’ and ‘income amount’. Further, McLaughlin confirms that gifts are within the statutory definition of ‘income’ and that ‘[h]owever wide the scope of the term "income" . . . it would not extend to a bona fide loan’. It was unnecessary for French J to deal with the issue about loans any further because in the circumstances the transaction under consideration was found not to be a loan. As will be seen this case is much the same.

19. The other feature of the definition of the statutory definition of ‘income’ is the exclusion in s.8(8)(j) of ‘a payment made to the person for or in respect of a dependent child of the person’. The exclusion means that if money is paid to someone ‘for or in respect of a dependent child’ the payment will not be ‘income’. The phrase ‘for or in respect of’ is a wide one although it is naturally confined to payments that are directly ‘for or in respect of’ because otherwise it would be possible to say that payments to a parent, for the parent’s use or benefit would be ‘for or in respect of’ the dependent child because, for example, they left more or other money available for the dependent child. There must be some objectively ascertainable fact that links the money to the dependent child in a practical sense.

20. The other aspect of the exclusion in s.8(8)(j) is that it underscores the approach referred to by French J in McLaughlin, namely that choices about the limits of the word ‘income’ have been made by the legislature and should be left to it. The exclusion in s.8(8)(j) is included in a long list of exclusions from the statutory definition of ‘income’ that are found in s.8(8) and it is not part of the decision makers role to introduce new or other limitations that are not to be found there.

21. I will deal with the disputed categories of payment received by Dr. Martin which the Secretary says are income separately and in turn.

    PAYMENTS RECORDED IN THE SCHEDULE

22. During the period that Dr. Martin was receiving the relevant benefits she received a series of payments from her parents, Mr. and Mrs. Wilkinson, which were recorded in an extract of a schedule which Mr. Wilkinson kept. This part of these reasons only deals with the payments that were made which are recorded in that extract of the schedule. I will later deal with other payments received by Dr. Martin from her parents that were additional to the payments in the extract of the schedule.

23. The payments in the extract of the schedule total $166,361.58, but there are only six payments that need to be considered here because the Secretary conceded that all the other payments were ‘a payment made to the person for or in respect of a dependent child of the person’ and were because of s.8(8)(j) excluded from the definition of ‘income’.

24. The six payments total $105,311.40. The amount and date of receipt by Dr. Martin are as follows:

    15 July 2011               $8,840

    11 March 2013           $27,490
    12 November 2013     $39,525
    3 August 2015            $10,056.40
    3 August 2016            $3000
    31 January 2017        $16,400

25. So far as the purpose of the payments was concerned, they were generally for purposes personal to Dr. Martin such as buying or fixing a car or undertaking renovations to her house. Two of the payments, those on 15 July 2011 and 31 January 2017, had two stated purposes which were ‘for dental work for Joe and new clutch for Carol’s car’ and ‘to help with school fees and house repairs.’ Neither payment had any proportion attributed to one of the stated purposes or the other.

26. All of these payments were apparently made in accordance with an agreement or arrangement that Dr. Martin had with her parents. That agreement or arrangement is important in understanding Dr. Martin’s assertion that the payments are not ‘income’ as defined by the Act, so it is necessary to say some more about it. The agreement was reflected in a document signed by Dr. Martin and dated 1 March 1999. The document said:

    In consideration of you, Mummy and Daddy, advancing us monies during your lifetime to help with education, medical expenses and other expenses I agree that the total sum of these monies are to be deducted from my portion of your estate upon your deaths. I understand that you will be keeping a running total of such money for each of us three children (Lorraine, Carol and Julia).

27. Sometime later, probably when the matter was being reviewed by the ARO, Mr. and Mrs. Wilkinson provided an undated letter addressed to ‘The Department of Human Services’ that said:

    The understanding on which the monies were paid was that they represented an advance of her [Dr. Martin’s] portion of her [Dr. Martin’s] inheritance of our estate on her death.

28. In a statement prepared by Mr. & Mrs. Wilkinson this was elaborated on:

    In 1999 we agreed that we would endeavor to help them [referring to their daughters] and our grandchildren with certain expenditure if they were unable to finance it themselves – e.g. schooling, health, dental and other expenditure we deemed ‘essential. All such payments were/are recorded against each daughter. The payments were/are advanced to be repaid out of their inheritance from our estate when we die. Essentially, the advances can be equated to ‘open-ended interest free loans, repayable from our daughters’ inheritance upon both our deaths. To ensure the three sisters were treated equally all such payments are recorded by my wife and my self.

29. Dr. Martin suggested that the six payments were ‘loans’ because they were made in advance of Mr. and Mrs. Wilkinson’s death and upon their death their intention was that the amounts would be repaid in dividing their estates between their children equally. This, it was suggested, meant that they were loans so that they were not within the definition of income in s.8 of the Act. This suggestion that the amounts were loans picked up what French J said in McLaughlin to which I have already referred, namely that ‘however wide the scope of the term "income", in my opinion it would not extend to a bona fide loan’.

30. The contention fails because amounts received by Dr. Martin from her parents were not loans if only because, like in McLaughlin, there was no intention that the amounts ‘advanced’ would be repaid. It was suggested that the amounts were ‘repayable’ from any inheritance upon her parents’ death, but there was neither any evidence of any agreement to repay, pay back, or reimburse, nor does it seem that there was any obligation to repay. Further, there was no evidence about how repayment would occur, to whom it would be made, and on what term. The payments were not called loans, there was no term as to repayment and there is no evidence that Dr. Martin made an agreement with her parents about any loan. Dr. Martin acknowledged that what was paid to her in her parents’ lifetimes would be deducted from her inheritance, but this does not provide any of the features of a loan.

31. The reality about the arrangement is that the amounts were no more than payments now of a future likely inheritance which might need to be adjusted between the three sisters upon their parents’ death. To most the payments would be considered a gift now of something that might have at some future time been a legacy. The substance of the arrangement was not what anyone would ordinarily or reasonably understand to be a loan, much less a bona fide loan

32. The payments of money received by Dr. Martin from her parents recorded in the schedule were monies received by her for her own use or benefit which were income within the meaning of s.8 of the Act.

1. I should add that my finding in that regard does not turn on whether the payments can be characterized as a gift or as gifts, although they probably were, but rather turns on the fact that money was received by Dr. Martin for her own use of benefit. If they were a gift or gifts, as French J observed, that they fall within paragraph (a) of the definition is ‘reinforced’ by the extension of the definition in paragraph (b). If periodical payments that are gifts are to be included in paragraph (b) there is no rational basis for excluding other gifts from paragraph (a). The likely purpose of paragraph (b) within the definition of income is to put beyond doubt that simply because there is some periodicity associated with the receipt of a gift or allowance it is not taken to have lost its income character.

2. Next, I should deal with the two payments that were said to be for ‘joint purposes’, the payments on 15 July 2011 of $8840 and 31 January 2017 of $16,400. The first payment included as its nominated purpose dental work for one of the children and the other payment included the purpose ‘to help with school fees’. Both payments had other purposes ascribed to them as well, but in neither case was an apportionment between the purposes of any kind possible. The payments fall squarely within the definition of ‘income’ because on the evidence they were moneys received by Dr. Martin for her sole use or benefit. That much is clear because no one was monitoring or enforcing the purpose to which Dr. Martin put the money to use and in a real sense the money paid to her was of benefit to her because it assisted her with the various things she did with her money.

3. The issue then is whether the exclusion applies to those moneys or any part of them because each ‘payment’ was ‘made to the person for or in respect of a dependent child of the person’. I am unable to determine from the evidence what part of the amount paid was ‘in respect of a dependent child’ because I have nothing that would inform any conclusion about that. There is not even some estimate offered about that. I am unable to apply the exclusion to those payments or any part of it. On the evidence before me I am only able to determine that there was money received by Dr. Martin for her own use or benefit within paragraph (a) of the definition of income.

4. Dr. Martin suggested that ‘[the Secretary] has been aware of the deposits into [Dr. Martin’s] bank accounts for years’, and because the payments were mixed, they should be disregarded. Reference was made to an earlier decision of the Tribunal in Clack v Secretary Department of Social Security [1998] AATA 80 where the Tribunal expressed the opinion that ‘that an attribution of "income character" to the whole of the deposits will be denied where part only of the total amount of deposits has that character and where no dissection or apportionment of the deposits is possible’. There is, however, nothing in the definition of income in the Act that would permit an amount of money received for use or benefit to be excluded because it was an undissected payment that included something that might be excluded from the definition and something that is not. I do not consider that I should adopt the approach in Clack. That approach would introduce words of limitation into the definition of income that are not found in the Act. There is nothing that engages the exclusion in s.8(8)(j) that would allow an approach that disregards what, on the face of things, is plainly income. There is insufficient evidence that demonstrates the exclusion applies to permit any relevant part of the payment to be excluded.

5. Although it is immaterial, I simply observe that the claim that the Secretary has known about the payments for years ignores completely that they should have been notified to the Secretary when they were received which would have allowed them to be considered properly if necessary.

6. Although that is sufficient to dispose of this aspect of the matter, I should deal with the Secretary’s submission that the payments made by Dr. Martin’s parents were ‘made up of regular, periodical payments by way of gift or allowance’ and were on that basis income within paragraph (b) of the definition in s.8. The difficulty with the Secretary’s submission is presented by the word ‘periodical’. It is not every payment by way of gift that is to be treated as income for the purpose of paragraph (b); it is only those payments that can be said to be ‘periodical’.

7. In Secretary, Department of Social Security v Davies [1997] FCA 1024 Heerey J considered that the payments in that case were ‘periodical’ in the sense that they ‘were regularly recurring and by reference to periods of time’. Ryan J in Kelleners v Secretary to the Department of Social Security [1988] FCA 3397 and Burchett J in Marsh v Secretary Department of Social Security (1986) 12 FCR 100 adopted a similar approach. A feature of those cases was a payment made over time at regular intervals in the same amount.

8. There is not much in the context of the provision that assists in ascertaining its meaning but there is much in its purpose that confirm the meaning that I consider is the correct one, namely that the purpose of the provision is to catch within the concept of income regular payments that a person is receiving which, because of their recurrent nature, would mean that they have less need for social security benefits. I have already referred to the passage in McLaughlin referring to the wide definition being one that meets ‘the public policy requirement that "public expenditure is directed to those who stand in actual need of the periodic support which income-related pensions provide". That observation applies to paragraph (b) of the definition as much as it does to paragraph (a).

9. In my view a periodical payment is a regular or recurrent payment made at regular intervals of time. It follows that the payments made by Mr. and Mrs. Wilkinson were not periodical payments because they were not made at regular intervals in time and were not in the same amount.

10. I have found that the payments received by Dr. Martin from her parents were income within paragraph (a) of the definition of income. The Secretary should include in calculating any debt owed by Dr. Martin income under this heading of $105,311.40.

    OTHER PAYMENTS FROM DR. MARTIN’S PARENTS

11. During the period that Dr. Martin was receiving the relevant benefits Dr. Martin received some further payments from her parents. I will deal with each of them separately, applying the definition of income in s.8(1)(a) and, where it is engaged, the exclusion of payments that come within s.8(8)(j). It is easiest to simply deal with the payments chronologically and in turn.

12. On 9 December 2010 $1548.70 was received by Dr. Martin from her parents for her own use or benefit. It was income within the definition in s.8(1)(a). The evidence was that $300 of that was designated specifically for her children which falls within the exception in s.8(8)(j) so that only $1248.70 should be considered as income.

13. On 22 December 2010 Dr. Martin received $1530.40 from her parents which she described as ‘Christmas present for myself and grandsons’. Dr. Martin says that some of it was intended to be for her children, but it is not possible to identify what part of it was intended to be for her children so as to exclude it or any part of it from the definition of income in paragraph 8(1)(a). The entire amount is a payment of money received by Dr. Martin for her own use or benefit so that it is income.

14. On 26 September 2011 Dr. Martin received $1515.07 from her parents which Dr. Martin said initially was for her to use to pay for airfares for her and the two children to visit family in New Zealand. She was shown movement records that showed she did not travel to New Zealand at any time around then such that her recollection about the payment was obviously mistaken. The payment was income. 

15. On 9 November 2011 Dr. Martin received $6510 from her parents to pay for airfares to fly to the United Kingdom for her and the children. Two thirds of that amount was in respect of the children, so it is excluded by s.8(8)(j) so that only $2170 falls within the meaning of income in s.8(1)(a) of the Act.

16. Dr. Martin also contended that the remainder of the amount did not fall within the definition of income because it was not received for her ‘own use or benefit’ because her parents had sent her the money solely for the purpose of her buying airline tickets for her to fly to the United Kingdom to be with them which was, so it was said, for her parents’ benefit. Apart from ignoring the fact that the money was for Dr. Martin’s ‘use’ (to buy an airline ticket), which is the alternative to benefit in the definition, the contention really fails to have any regard to approach the matter objectively. It is reasonable to conclude that the payment for an airline ticket by Dr. Martin’s parents was received by Dr. Martin for her use or benefit. 

17. On 5 March 2012 $4,355.64 was received by Dr. Martin from her parents for school fees and sports fees for the children, so it is excluded from the definition of income by s.8(8)(j).

18. On 9 August 2012 Dr. Martin received $2928.55 from her parents which was again for airfares to New Zealand. Although it was not entirely clear I am prepared to infer, because the reason of the travel was to ‘maintain family contacts’, that it was both for Dr. Martin and for her children’s travel so that only one third of the amount fell within the definition of income with the remainder excluded because it was in respect of her children. That means $976.18 should be treated as income.

19. On 23 November 2012 Dr. Martin received $1292.77 from her parents as ‘Christmas presents’. The amount is income because it was received by Dr. Martin for her own use or benefit.

20. On 5 March 2013 Dr. Martin received $4507 from her parents which was earmarked for the children’s school fees, so it is excluded from the definition of income by s.8(8)(j).

21. On 12 June 2013 Dr. Martin received $1586.59 from her parents to pay for an airfare to fly to the United Kingdom to visit her father who was ill. The amount is income as it was received by her for her own use or benefit. It is not necessary to repeat what I have said about the contention that the payment was not for her use or benefit but rather for that of her father.

22. On 12 July 2013 Dr. Martin received $2000 from her parents to pay for dental fees for her son so it is excluded from the definition of income by s.8(8)(j).

23. On 3 November 2014 Dr. Martin received $1550 from her parents which was for Dr. Martin to use to pay for airfares for her and the two children to visit family in New Zealand.  It follows two thirds of the amount ‘was made to the person for or in respect of a dependent child of the person’ so that only $516.66 should be treated as income within the meaning of s.8 of the Act.

24. On 4 November 2014 Dr. Martin received $3000 from her parents for the cost she was to incur for a knee operation. That was an amount that Dr. Martin received for her own use or benefit and so it was income.

25. On 24 February 2016 Dr. Martin received $7436 from her parents to pay for dental fees for her son so it is excluded from the definition of income by s.8(8)(j).

26. On 31 August 2016 Dr. Martin received $1000 from her parents to ‘help for expenses when my sister and husband visited.’ That was an amount that Dr. Martin received for her own use or benefit and so it was income.

27. On 22 March 2017 Dr. Martin received $2165 from her parents for airfares. Again, like with the other airfares to New Zealand I am prepared even though it was a little unclear to infer that the airfares were for Dr. Martin and her children such that only one third of the amount, that is $721.66, should be treated as income.

28. The Secretary should include in calculating any debt owed by Dr. Martin income under this heading of $15,558.03.

    PAYMENTS FROM OTHERS

29. An examination of Dr. Martin’s bank accounts found eleven transactions that were described by the Secretary as ‘unexplained deposits’ which had been made over the period 11 February 2010 to 12 June 2015. The amounts received into the bank account were in various amounts and were subsequently explained by Dr. Martin as being ‘most likely contribution from Bob for bills’; ‘from ex-husband or Bob’ or ‘Bob/Jason for bills’; ‘Bob’s contribution for holiday’ or ‘Bob’s purchase of car’ in the amount of $2000 or ‘most likely additional money from ex-husband for son’s car’ in the amount of $350. The reference to ‘Bob’ is a reference to Dr. Martin’s then partner. The reference to Jason is a reference to Dr. Martin’s ex-husband. I will deal with the payments in three groups: the payment that were contributions to bills totalling $4550, the payments that were for the car or holiday totalling $6000 and the payment for the son’s car totalling $350.

30. The first category of payments falls squarely within the definition of income in s.8(1)(a). They may well have had the purpose defraying costs associated with household bills or expenses that Dr. Martin had paid but that did not deprive what was paid to Dr. Martin of the character as falling within the definition of ‘income’. There was an ‘income amount’, namely ‘moneys’, that Dr. Martin ‘received’ for her ‘own use or benefit’. The amounts paid were for her own use or benefit because she owned the money once it was given to her and could do what she wished with it. Treating those amounts as income is consistent with McLaughlin that eschews the introduction of words of limitation into the statutory definitions. It is also consistent with the policy objective identified in McLaughlin, namely the maintenance ‘of a basic level of income for those who [are] unable to receive sufficient income to provide for themselves’.

31. The second category of payments is a little different. First, two of the payments involved what were expressly repayments of loans which were made by Dr. Martin to Bob for the purchase of a car. French J’s observation in McLaughlin that bona fide loans do not fall within the meaning of the word ‘income’ in s.8(1) no matter how wide the definition of income in that section might be which I referred to earlier is apposite. If money received as a loan is not income it follows that repayments of money lent to someone else is not income either.

32. The other payment of $2000, the contribution for the payment for the holiday, is like the payment for the household expenses in that it was a payment received by Dr. Martin for her own use or benefit. The fact that she then used the money to fund the payment of a holiday for Bob does not deny the money the character of income: it is not the subject of any one of the exclusions in s.8(8) of the Act. The amount is income for the purpose of the Act.

33. The final amount in relation to the son’s car was ‘a payment made to the person for or in respect of a dependent child of the person’ and is because of s.8(8)(j) excluded from the definition of ‘income’.

34. The Secretary should include in calculating any debt owed by Dr. Martin income under this heading of $6450.

    WAIVER FOR SOLE ADMINISTRATIVE ERROR

35. The next issue concerns whether the Secretary has an obligation to waive recovery of the whole or part of the debt because of s.1237A of the Act. It is convenient to set out the regulatory prescription before dealing with the facts relevant to the issue

36. Sub-section 1237A(1) of the Act provides:

    1237A Waiver of debt arising from error

    Administrative error

    (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).

    The remainder of s.1237A is not relevant for present purposes.

37. The issue concerning sole administrative error requires consideration of the reason why a debt arose in the first place. The word ‘solely’ where it qualifies the words ‘to an administrative error’ means ‘only’ or to the ‘exclusion of other things.’ There is no reason why the word in context should not be read as having its ordinary English meaning. It follows that the relevant inquiry is why did the debt arise, and, in most circumstances, this will involve ascertaining what the causes of any overpayment were and whether objectively the only cause for the debt is an administrative error on the part of the Commonwealth. If the debt can be attributable to some other fact or circumstance, even partly so, then the section is not engaged because it is not something that is solely attributable to administrative error by the Commonwealth. In Sexthon v Secretary, Department of Family and Community Services [2003] FCFCA 190 at [35] Selway J, with whom RD Nicholson J agreed, said:

    The ordinary or usual interpretation of the phrase `attributable solely to' is that it refers to the single or sole cause of the relevant act or event. The word `attributable' means `capable of being attributed'. It involves an objective assessment of causation. The words `a debt attributable solely to an administrative error' can be paraphrased as meaning that the only cause that objectively can be ascribed to the relevant debt is an administrative error

38. The most immediate cause of the debt in this case is very obviously the overpayments of the relevant benefits in the first place. To understand how the overpayments occurred it is necessary to deal with the facts in a little detail.

39. On 25 March 2010 Centrelink sent Dr. Martin a payment statement concerning the period 20 December 2009 to 25 March 2010. It set out some things about her Austudy and about Dr. Martin’s income and assets so far as they were known to Centrelink. The statement also told Dr. Martin that she was required to tell Centrelink within 14 days of the occurrence of changes, or changes that are likely to happen, to various things. Those things included changes concerning her and her partner stopping or starting employment, changes about the work and income she received, if the value of her assets increased by more than $1000 or if she stopped studying or was in receipt of other government assistance. The statement explained that if those things happen ‘the amount of payment you get may change’ and ‘If you are paid too much because you don’t tell Centrelink about any of these changes when you have to, Centrelink may make you pay it back.’ Dr. Martin said she had no recollection of having received that letter and ‘if this [referring to the words that I have quoted] was in the fine print, I wouldn’t have read it’. I’m satisfied that Dr. Martin more likely than not received the statement and that she did not read it.

40. On 15 April 2010 Dr. Martin was sent a notice by Centrelink telling her that her Austudy was being cancelled as she was only undertaking part time study.

41. On 20 April 2010 Dr. Martin was sent a ‘Customer Declaration Form Newstart allowance’ which included a notice requiring Dr. Martin to tell Centrelink within 14 days of any changes to her income and employment.

42. On 3 May 2010 Dr. Martin was sent another notice telling her that her Newstart Allowance was to be paid from 9 April 2010 and that she was required to tell Centrelink if various defined events happened or were likely to happen. They were the same kinds of things that were contained in the 25 March 2010 statement.

43. On 5 December 2011 Dr. Martin was sent a notice by Centrelink which set out what her ’regular payment’ for Austudy would be. The notice contained words under the heading ‘When to contact us’ and under that heading it said: ‘You must tell us within 14 days about events or changes in circumstances effecting your payment. You can tell us by writing, calling or coming into any of our customer service centers.’ Under the heading ‘What you must tell us’ there were many bullet points, but one of them said ‘Start to receive or stop receiving income or income changes.’. Under a heading ‘What is income’ the words ‘income includes but is not limited to: personal earnings . . . gifts or allowances of a regular nature…’ Dr. Martin said that she did not read that part of the letter at the time, but again it is more likely than not that she received the letter.

1. On 20 March 2013 Dr. Martin received a notice which contained a similar requirement to notify changes to that in the 5 December 2011 notice.

2. On 18 December 2013 Dr. Martin signed an application to receive the Newstart Allowance which attested to a declaration by her that ‘I will notify the Department of Human Services within 14 days if my income changes or if I get work’

3. On about 24 July 2014 Dr. Martin had some dealings with Centrelink concerning her scholarship. The details of what Dr. Martin said to Centrelink at the time might be unclear so far as the Centrelink records are concerned, but Dr. Martin’s evidence was clear. In her ‘in person’ meeting at Centrelink on 24 July 2014 Dr. Martin told Centrelink that she had been awarded a scholarship. She was told she needed to obtain a ‘code’ from the University. She left to obtain a ‘code’ but could not get one.

4. On 31 July 2014 Dr. Martin rang Centrelink to tell it about her failed attempt to obtain a ‘code’. She was told that what she was told earlier about obtaining a code was wrong. She again told the employee who she was dealing with about the scholarship. Dr. Martin said the scholarship was for three years and that it was for an amount of ‘$25,305 for 2014’. The words ‘for 2014’ assume importance because Dr. Matin did not say what the amount of the scholarship would be for years other than 2014. The amount of $25,305 equates to a fortnightly amount of about $973. Dr. Martin explained that the amount was not taxable. Dr. Martin asked how this would affect her Newstart Allowance. Dr. Martin was told that Centrelink would ’code the scholarship income as continuing income. You do not have to report it each fortnight’. Dr. Martin asked about her casual earnings and was told she needed to report that income the same way she had been doing.

5. Dr. Martin said that she was not told that she needed to report her scholarship income annually because ‘otherwise I would have done so as I most definitely did not want to incur another debt inadvertently (given my previous experience in 2010)’. This was a little curious given that neither Dr. Martin nor Centrelink would know what the scholarship amount would be in the second and third years or more accurately ‘for’ anything other than ‘2014’, but that was probably because the priority at the time was to notify Centrelink of the scholarship rather than anything else and the importance of the amount got lost along the way. In any event Dr. Martin was clear in her evidence that even though she told Centrelink the scholarship was for three years she only notified that it ‘paid $25,305 for 2014’.

6. On 31 July 2014 Centrelink sent Dr. Martin a notice that Dr. Martin says she does not recall receiving or reading. That is unsurprising given that it was sent something like six years before she was asked about it at the hearing. The probability is that she received it. The notice contained in bold and large type the words ‘Your Newstart Allowance’. It contained a statement about what the ‘Regular Payment’ would be from 22 August 2014 which was less than the payment that was made for the then current fortnight.  Under a heading ‘Information used for calculating your regular payment’ were the words ‘Total Fortnightly Income’ and alongside that was ‘$707.83’. The front page was sparse most of which I have recorded here. At the bottom of the front page were three boxes under the heading ‘Contact information’ which contained references to ‘online services, email address and phone’.

7. Dr. Martin’s evidence about the notice was that ‘Reading it now with the benefit of hindsight, I realize that this required me to report if earnings changed from $707.83’. This was no doubt a reference to what appeared on the second page of the notice which said under a heading ‘You must tell us if any of the changes listed below happen or are likely to happen . . .the income shown above is incorrect’. There were very many other changes that needed to be notified and included a requirement to ‘tell us if . . . You receive a lump sum amount of money or one-off payment from any source’. Dr. Martin said even though she did not recall the letter ‘I do have to admit that I wouldn’t look at the small print in any of these letters’ which was a reference to the part of the letter on the second page concerning the requirement to notify various changes and the definition of income.

8. On 7 August 2014 Dr. Martin sent a letter to her ‘job service provider’ which contained details of the scholarship which included that it was for three years and was for an amount of $25,305 for 2014 and was indexed. The job service provider told Dr. Martin not to send the letter to Centrelink because ‘we liase with Centrelink’. Dr. Martin did not send the letter to Centrelink.

9. On 26 August 2014 Centrelink sent Dr. Martin a notice in much the same terms as the 31 July notice although it contained a reference to a ‘Total Fortnightly Income’ of $783.70. The notice was sent a few days after Dr. Martin reported her casual earnings. Dr. Martin said that she does not recall receiving the letter but ‘even now I cannot make sense of it’. Dr. Martin said that as she had reported casual earnings of about $112, that amount together with her scholarship amount of $973 would make her fortnightly income over $1000 in the period. The words in the notice should have, however, made sense to Dr. Martin in one respect which was that Centrelink were telling Dr. Martin that her Newstart Allowance was being calculated on a lower fortnightly income than that which she was receiving. The curious thing from the notices of 31 July and 26 August is that Dr. Martin was consecutively over two months advised that Centrelink were calculating her Newstart Allowance by reference to a wrong and lower fortnightly income and Dr. Martin did nothing to correct it. This was in circumstances where Dr. Martin ‘did not want to incur another debt inadvertently (given my previous experience in 2010)’. On the face of things, the income figure on the document did not obviously correlate to anything.

10. On 9 December 2014 and 5 January 2015 Dr. Martin received similar notices with ‘Total fortnightly income’ less than her scholarship income.

11. On 29 January 2015 Dr. Martin received a statement from Centrelink concerning her Newstart Allowance. The statement had recorded on it the words ’Please check the information on this statement carefully. If the details on this statement are correct there is no need for you to contact us. If your circumstances have changed, please contact us within 14 days. This request is an information notice given under social security law. You may find it convenient to keep this statement with your records’. Dr. Martin did not recall receiving the statement but accepted it was obvious that it had been sent to her, at some point. She also said she probably would not have read the letter or any part of it. The statement recorded the scholarship under ’other income’ as ‘$25,305.pa’. The entry reflected Dr. Martin’s notification of the amount of the scholarship for 2014, but by the time she received that statement the scholarship had been increased to about $990 a fortnight or $25,740 per year. Dr. Martin did not notify Centrelink of this change. 

12. On 6 August 2015 Centrelink issued Dr. Martin with another notice which recorded her ‘Total Fortnightly Income’ as $19.76 per fortnight. There was a significant increase, about $150, in Dr. Martin’s Newstart Allowance at that time. The discrepancy, at least in part, arose after that date because the scholarship income was not being included at all in Dr. Martin’s income calculation. This was most probably because the amount entered in 2014 was entered for only one year. There was nothing in the evidence that satisfactorily explained why Dr. Martin might have had some reason to believe that at that time she was suddenly entitled to receive such a significant increase in her Newstart Allowance. But there is another reason why what happened at the time would have alerted someone to things possibly being awry.

13. The University’s records show that on 30 July 2015 Dr. Martin was paid $119.65 for her work in addition to the scholarship money paid to her. That amount spanned the period with which the 6 August 2015 notice was concerned. That amount alone was about $100 more than what was recorded on the Centrelink notice. To someone reading the notice it must have been obvious that Centrelink were acting on a mistaken figure so far as Dr. Martin’s fortnightly income was concerned simply because of the small amount of income that was recorded on the notice. The amount was more than $1000 different to actual income, (that is income that included the scholarship income) and about $100 different to earnings income (that is income paid by the University). The notice was in familiar terms to those referred to earlier and required that if the amount of income shown on the notice was incorrect it was necessary to tell Centrelink about it within 14 days. It also included a definition of income that has as one of its components a ‘receipt of lump sum payment of money or one-off payment from any source’.

14. Dr. Martin, when asked about the fact that the figure on the Centrelink notice being wrong, said she ‘obviously didn’t take notice of that’. She was asked at the same time about the reference to the requirement to report the receipt of lump sum payments or one-off payments, no matter whether those payments were from overseas or in Australia, and her response was ‘No I wouldn’t have read the small print so obviously not’.

15. According to Dr. Martin she dealt with Centrelink quite a few times after receiving these, and similar letters. Dr. Martin, it seems, did not ask any questions about the discrepancy between her reported income and what was contained in the letters until at least December 2015.

16. On 1 December 2015 Dr. Martin ‘noticed’ a ‘substantial’ increase in her Newstart Allowance. Dr. Martin contacted Centrelink by telephone and told them that her Newstart Allowance payments had increased. Dr. Martin wanted to know if everything was correct. Dr. Martin was asked if anything had changed. Dr. Martin said nothing had changed. The Centrelink record of the call says: ‘Customer confirmed she is reporting all earnings.’ The words ‘is reporting’ involves no matter of technicality. It was also not quite correct that Dr. Martin was at that time reporting all earnings because her evidence was that she was not reporting her scholarship earnings as they had been, to use her terminology, ‘coded’. Also, Dr. Martin said in her oral evidence when asked if she told the Centrelink employee ‘about your scholarship or any other earnings or income you had’ that ‘I told her that my circumstances were the same. I was at the University, I was doing my PhD, I had casual employment’. It is noteworthy that on any view, despite having mentioned those things, there was no reference to the scholarship at all. It is difficult to understand why the words like ‘I am still receiving my scholarship payments’ or something like that were not said, but the evidence given orally at the hearing by Dr. Martin was that they were not. 

17. Dr. Martin also said in her evidence that she was asked if her circumstances had changed at all and she had replied ‘No circumstances have not changed. I’m still studying, I’m still casually employed at the University’. Again, the scholarship was not mentioned even though other things were. Dr. Martin added when questioned about whether she went through what she was receiving by way of ‘income’ and ‘scholarship’: ‘Yes, I am pretty sure I would’ve said that I still had a scholarship’. Her reconstruction about what she was ‘pretty sure’ she ‘would’ve’ said is reason to be cautious about accepting that there was mention of the scholarship. In any event, on any view there was nothing said about the amount of the scholarship or anything else about it. The scholarship did not rate a mention when Dr. Martin was first asked about what she had said in that conversation. In her written statement Dr. Martin said she said the words ‘I have a non-taxable scholarship’, but I am not persuaded, especially given her oral evidence, that she said those words. It is not possible to be satisfied on the probabilities that anything was in fact said about the scholarship, its amount, the indexation of the amount and that it was still being paid. Its omission from her oral evidence and the use of the word ‘would’ve’, which suggests something of a reconstruction of what might have been said, are unpersuasive. I do accept Dr. Martin’s evidence that she was asked if anything had changed and that she said nothing had changed. Of course, one thing had changed by then if nothing else: the amount of the scholarship.

18. On 13 January 2016 Centrelink issued Dr. Martin with a notice recording her fortnightly income as $20.24 which contained the familiar requirement to notify if that was incorrect. Her income from her scholarship alone was more than $1000. Dr. Martin did not notify Centrelink of the error. Dr. Martin said she would not have read the letter and ‘I didn’t take any notice of it because they were sent routinely, and I always believed I was doing the right thing’.

19. On 21 January 2016 Centrelink issued Dr. Martin with another notice recording her fortnightly income as $20.24 for the same period as was referred to in the 13 January 2016 letter. That notice contained the requirement to tell Centrelink if the amount was incorrect. Dr. Martin was asked why she did not tell Centrelink that the amount recorded as being her income was wrong and she said that ‘in hindsight I should’ve picked that up, I should have’.

20. On 29 January 2016 the same pattern repeated itself as referred to concerning the earlier letters. When asked about why she had not notified Centrelink of the mistake Dr. Martin said ‘No I didn’t – no, I didn’t notice it I didn’t pay attention to it, I should have’.

21. On 2 June 2016 Dr. Martin participated in a ‘review’ of her Newstart Allowance in which her scholarship and casual work was discussed. Dr. Martin, although not impressed with the interviewer, left the interview with the impression that all was well. Again, on 8 March 2017 Dr. Martin had another conversation with a Centrelink employee about her payments. There was no detailed evidence about anything that was discussed during these interviews.

22. On 8 December 2016 Dr. Martin received a notice from Centrelink saying that her income over the fortnight ending 22 December 2016 was $16.30. That could not have been correct because on 15 December 2016 Dr. Martin was paid two amounts by the University being $1007.62 in respect her scholarship and $1125 which she believed related to a prize or award. Dr. Martin did not notify Centrelink that the amount in the notice was wrong as the notice requested her to do. She explained she did not tell Centrelink because she ‘didn’t notice it’ and she didn’t realize that the prize was income because she considered income was ‘earned or interest from a bank account, interest employment’.

23. The same pattern of notices, incorrect income amounts and failings to notify Centrelink of the wrong income amounts are apparent from the circumstances associated with notices dated 2 February 2016, 12 September 2016, 12 December 2016 13 January 2017, 19 January 2017, 24 February 2017, 6 March 2017, 16 March 2017, 24 March 2017, 4 April 2017, 7 June 2017, 11 September 2017, and 16 January 2018.

24. So far as her income from employment with the University was concerned Dr. Martin said that she ‘declared all income on a fortnightly basis’. Dr. Martin initially said, in answer to questions about what she reported to Centrelink about her employment income, that she did not report the income when she received it because ‘it was a very difficult system because you had to report fortnightly, and from what I can recall it was on a Thursday. But that never aligned with the pay days for the University. So you had to calculate an estimate to the best of your ability what you were going to be receiving on the day that Centrelink wanted you to report it.’ Dr. Martin later said that as far as she recalled she reported the income she received not ‘estimating it, not forecasting it’. Dr. Martin reported her income using an online system except on the few occasions there was a glitch in the system. When she could not report she tried to contact Centrelink but if she could not get through by phone she would send an email. The Secretary’s position was ‘she says, and I don’t cavil with that, she always faithfully reported her employment income’. Be that as it may even though the income shown in the notices did not correspond to her reported income Dr. Martin at no time contacted Centrelink to correct things.

    WAS THERE SOLE AMDINSITRATIVE ERROR?

25. The question about why the overpayment which resulted in a debt was solely attributable to administrative error on the part of the Commonwealth is best answered by addressing each of the categories of income in two groups.

26. The payments received by Dr. Martin from her parents, her ex-husband and her partner were all amounts of income that Dr. Martin was required to tell Centrelink about. There were at least five reasons why this was so.

27. First, s.66A of the Social Security Administration Act 1999 required Dr. Martin to notify ‘an event or change of circumstances occurs that might affect the payment of that social security payment’ within 14 days.

28. Second, information about that obligation was conveyed to Dr. Martin as early as 25 March 2010 when Dr. Martin was told, amongst other things, that she was required to tell Centrelink about any increase in her bank balance of more than $1000. She did not do that in relation to any of the payments from her parents yet all of them were for more than $1000.

29. Third, Dr. Martin was required to tell Centrelink about regular gifts she received. Dr. Martin was reminded of her obligation to notify Centrelink about those matters frequently on very many occasions when she received notices referring to what her payment would be and what the fortnightly income was that formed the basis for the relevant benefits that were to be paid to her. At least so far as her parents were concerned there was a reasonable degree of regularity about what she received, especially when regard is had to the fact that the gifts she needed to report did not exclude those that were for the benefit of her children. She needed to notify Centrelink of all gifts, presumably once notified the question of whether they fell within the definition of income in the Act or were excluded would be dealt with. If there was any doubt about the need to notify Centrelink, references in the notices such as the one issued on 31 July 2014 to the requirement to notify if ‘You receive a lump sum amount of money or one-off payment from any source’ were hardly ambiguous. If Dr. Martin did not know about the obligation because she did not read the notice or take care about what Centrelink were telling her that was not something attributable to the Commonwealth.

30. Fourth, the requirement to report changes to income was defined by using the word ‘including’ and followed by examples. Although, ‘income’ ordinarily understood might confine attention to salary and wages and interest from bank accounts as Dr. Martin suggested, at least at one point in her evidence, the most cursory reading of the notices Dr. Martin received reasonably frequently over the period would have alerted a reasonable person to the fact that Centrelink’s definition of ‘income’ was much different to what might be its ordinary meaning. At the very least, a reasonable person reading the notices would have made inquiries about whether the moneys being received were required to be reported.

31. Fifthly, Dr. Martin did not, so it seems, read the notices or what she referred to as the ‘small print’ so she had no knowledge of what she was required to report. It was not reasonable for Dr. Martin to not read what Centrelink were telling her about her payments of the relevant benefits. Small print or not, Centrelink were sending information to her which objectively viewed should have been considered as important. At least, important enough to read. I should add that, contextually, having regard to Dr. Martin’s desire to avoid being in a position where she was overpaid because that had happened to her previously, it is more than a little remarkable that she did not carefully read what Centrelink was sending her.

1. All of those things objectively and practically viewed means that the debt that resulted from the overpayments arose because the amounts were not reported to Centrelink as income or even possible income, and so cannot be attributed to sole administrative error. They were in no small part to be attributed to Dr. Martin’s omissions. There could be no administrative error if Centrelink were not told what Dr. Martin knew about money she was receiving especially when Centrelink were telling Dr. Martin what she needed to inform them about.

2. Next, it is necessary to consider the question concerning scholarship payments. I do not need to address the scholarship payments so far as the period between 31 July 2014 and 7 August 2015 are concerned because the Secretary did not contend that there were any amounts overpaid in the period that related to the scholarship payments or that if there were, they were attributable to something other than sole administrative error by the Commonwealth. The issue related to the payments of the scholarship amounts after 7 August 2015 requires consideration of whether the overpayment of relevant benefits was attributable to sole administrative error or whether there were other reasons for it.

3. The first matter is that when Dr. Martin did initially notify Centrelink about her scholarship, on her evidence, she notified Centrelink that the value of the scholarship was ‘$25,305 for 2014’. That is, even though the scholarship was for three years, the only notification she gave to Centrelink, it would seem, was that it would be worth $25,305 ‘for 2014’. She did not tell Centrelink what amount she would receive from the scholarship in any of the other years. Even if it were accepted that she said the words that it was ‘indexed’ as some of her evidence seemed to suggest, that left Centrelink none the wiser because that did not report the amount Dr. Martin was to receive. That omission to inform Centrelink at any time about what the amount of the scholarship was for the years after 2014 contributed to the error. If the increases had been reported it would have become apparent that Centrelink were not acting on the actual position that the scholarship was continuing to be paid certainly at least so far as 2016 was concerned.

4. The second matter that is important is that on 6 August 2015 Dr. Martin was sent a notice which showed that she had a significantly reduced fortnightly income and a significantly increased Newstart Allowance payment. Dr. Martin’s response when asked about that was that she ‘obviously didn’t take notice of that’. Not taking notice contributed to the error. So far as the ‘small print’ was concerned, it required her to report if the income shown was incorrect. That notice stood in the context of a long history of previous notices sent to Dr. Martin to the same effect. At the very outset of the second year of the scholarship payments Centrelink were acting on the basis, so it seemed, of an incorrect fortnightly income, telling Dr. Martin about that and Dr. Martin was either taking no notice or not reading what she was being told. This was in circumstances where it was reasonably obvious that something was different because Dr. Martin was receiving a higher rate of benefit and for no apparent reason. The failure to take notice of what Centrelink was telling her and the basis upon which it was paying her monies contributed to the error.

5. The third matter that is important is that when Dr. Martin contacted Centrelink on 1 December 2015 to inquire about the increase in her Newstart Allowance payment she told Centrelink that nothing had changed. I have found that Dr. Martin most probably did not refer to the scholarship even in general terms during that conversation, but even if she did, Dr. Martin did not say very much about it. For example, she did not say it was for about $973 a fortnight, that she had been receiving it since the middle of 2014, that her Newstart Allowance payment had decreased significantly since she started receiving it, that it was to be indexed annually and had in fact increased at the beginning of 2015, nor that it had a further two years to run.  Neither, on any view of the evidence, did she say that she had told Centrelink about these things in the middle of 2014. Nor did she say, so it seems, that she was not reporting the scholarship amounts fortnightly as they had been ‘coded’. That is, simply saying either ‘nothing had changed’ or even, ‘I am still receiving a scholarship’ without dealing with the detail of what was known to Centrelink was reasonably likely to have contributed to the over payment, especially because the only event to have changed Dr. Martin’s Newstart Allowance payments in the first place was the scholarship payments. Added to this, in a like way, is that it is consistent with the Centrelink record that Dr. Martin ‘confirmed she is reporting all earnings’ but that of course was not correct because she was not reporting scholarship income as on her evidence, she understood it had been ‘coded’.

6. The fourth matter is that the scholarship was, it appears from the University records, increased, presumably because it was indexed, on 15 January 2015, 14 January 2016 and 12 January 2017. Dr. Martin did not report any of the increases in the amount of the scholarship to Centrelink. It is not, as was suggested by Dr. Martin, a case of failing to report only the indexed portion of the scholarship that is brought into play by the failure to tell Centrelink about any increases. This is because, at least so far as the increases in January 2015 and January 2016 are concerned, had Dr. Martin notified Centrelink of the increase in the scholarship payment she was receiving it was likely that any error or errors arising from the failure to include any of the scholarship payments in calculating Dr. Martin’s Newstart allowance would have surfaced. Certainly, by January 2016 that would have been the case because it would have become apparent that Centrelink were not taking the scholarship into account at all by then.

7. The fifth matter is, of course, that Dr. Martin contributed to the error by failing at all times to notify Centrelink that the fortnightly income shown on the various notices she was receiving from Centrelink was simply wrong. Dr. Martin’s evidence concerning the January 2016 notice ‘that in hindsight I should’ve picked that up, I should have’ is telling. It rings true for all the notices that she was receiving that recorded the incorrect fortnightly income. In the end Dr. Martin’s own failure to read and act upon the notices contributed to the error that was made in overpaying her because of her scholarship payments.

8. The debt, so far as the scholarship payments received by Dr. Martin after 7 August 2015 which were not notified to the Secretary, cannot be attributed to sole administrative error by the Commonwealth as Dr. Martin contributed to the error because of the matters I have referred to.

   GOOD FAITH

9. As I have found that the debt is not attributable to sole administrative error of the Commonwealth it is not necessary to consider whether the relevant benefits were received by Dr. Martin in good faith.

   SPECIAL CIRCUMSTANCES

10. The final issue is whether any of the debt should be waived because of s.1237AAD which enables the Secretary to waive a debt if the conditions of that section are met.

11. The facts relevant to this issue are those that I have recorded earlier when dealing with the other two issues, so it is not necessary to repeat them here.

12. Section 1237AAD provides:

    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.

13. There was no argument advanced as to what made the circumstances in this matter ‘special’. There is nothing that would take the circumstances of this matter out of the ordinary or unusual. In any event there is nothing in the circumstances, even if they could be described as unusual, as distinct from the circumstances confronting Dr. Martin, that make it desirable to waive any of the debt. There was nothing advanced about Dr. Martin being unable to pay any debt back or that her circumstances involved financial hardship. Undoubtedly it will create difficulty for her, but there was nothing that suggested that there will be any hardship for her in dealing with the debt.

14. In this regard it is instructive to recall the observations of Brennan J in Read concerning the policy underpinning the Act that ‘public expenditure is directed to those who stand in actual need of the periodic support which income-related pensions provide’ and the Full Court in Garvey that identifies that the purpose of such payments is to "maintain a basic level of income for those who [are] unable to receive sufficient income to provide for themselves" as I referred to earlier.

15. I am not satisfied that there is anything that is unusual or special about this case so that it could be considered as having special circumstances which attract the operation of s.1237AAD. Nor do I consider that even if there were that it could be considered as having special circumstances that make it desirable to exercise the power to waive the debt. There was nothing suggested to that effect either.

    CONCLUSION

16. I have found that payments totalling $120,869.43 which are payments that Dr. Martin received from her parents, and $6450 that Dr. Martin received from her ex-husband or her former partner were income for the purpose of calculating the relevant benefits. It was conceded that the scholarship payments received after 7 August 2015 were income.

17. I have found that the overpayment of the relevant benefits were not attributable solely to administrative error on the part of the Commonwealth and are therefore debt owed to the Commonwealth and are able to be recovered.

18. I have found that s.1237AAD is not available to waive the debt because there are no special circumstances that make it desirable to do so. 

19. The appropriate course is to set aside the decision of AAT1 and remit the matter to the Secretary to recalculate the debt owed to the Commonwealth in accordance with directions to take into account the matters to which I have referred.

    DECISION

20. I set aside the decision under review and remit the matter to the Secretary to recalculate the debts owed by Dr. Martin on the basis that her income for the purpose of s.8 of the Act for the period 26 March 2010 to 20 December 2018 includes the following amounts:

    (a)income earned from Dr. Martin’s employment;

    (b)scholarship payments received after 7 August 2015;

    (c)the amounts paid to Dr. Martin by Mr. & Mrs. Wilkinson totalling $120,869.43

    (d)the amounts paid to Dr. Martin by Mr. Mirovic and Mr. Martin totalling $6450;

    (e)the income earned by Mr. Mirovic in his employment;

    and does not include:

    (f)the amount of legacies totalling $20,067.79; and

    (g)the amounts received from the sale of shares totalling $18,664.70

I certify that the preceding 126 (one hundred and twenty -six) paragraphs are a true copy of the reasons for the decision herein of Mr. Rob Reitano, Member

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

Associate

Dated: 7 March 2022

Date(s) of hearing:	09 August & 29 October 2021
Solicitors for the Applicant:	Mr. S Hodges, Hodges Legal
Solicitors for the Respondent:	Dr. S Thompson, Sparke Helmore