McIlroy and Secretary, Department of Social Services (Social services second review) - [2018] AATA 1832

McIlroy and Secretary, Department of Social Services (Social services second review) [2018] AATA 1832 (19 June 2018)
Division:GENERAL DIVISION
File Number: 2017/2254
Re:Jodi McIlroy
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Member D K Grigg
Date:19 June2018
Place:Brisbane

The Tribunal affirms the decision under review insofar as it relates to a debt for the period 6 October 2010 to 14 January 2015 and 10 June 2015 to 13 October 2015 and sets aside the remainder of the decision and substitutes it with a decision that the portion of the debt attributable to the period between 15 January 2015 and 9 June 2015 be waived pursuant to section 1237A of the Social Security Act 1991 (Cth) and remits the matter to the respondent for re-calculation of the debt.
........................[Sgd]................................................
Member D K Grigg
CATCHWORDS
FAMILY ASSISTANCE – parenting payment – overpayment – how calculated – whether sole administrative error – decision under review affirmed in part
LEGISLATION
Social Security Act 1991 (Cth)
CASES
Haggerty v Department of Education, Training and Youth Affairs (2000) 31 AAR 529
Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484
SECONDARY MATERIALS
Guide to Social Security Law (2017, Cth)
REASONS FOR DECISION
Member D K Grigg
19 June 2018
INTRODUCTION & CLAIM HISTORY

Ms McIlroy was, at all relevant times, a recipient of parenting payments (PP). The rates at which people are paid PP is determined using the Pension Rate Calculator A at the end of section 1068A of the Social Security Act 1991 (Cth) (Act).[1] The maximum basic rate payable varies depending upon a person’s family situation and varies depending on any income earned.[2]
[1] Section 1068A, Act.
[2] Section 1064(A)-B1, Act.
Between 6 October 2010 and 13 October 2015 (“Period”) Ms McIlroy received PP’s and was employed by Townsville Scaffold Hire Pty Ltd.
During the Period the Department of Social Services (“Centrelink”) sent Ms McIlroy notices which set out that Ms McIlroy was under an obligation to notify Centrelink within 14 days in the event that her earnings or other circumstances changed.[3] The Centrelink notices also set out the earnings figure being used by Centrelink to calculate Ms McIlroy’s entitlement and informed Ms McIlroy to notify Centrelink within 14 days if the details were incorrect.
[3] Exhibit 1, T Documents, T4, pages 30-31, Centrelink notice dated 10 May 2015; T14, pages 158-233, Letters from
Centrelink to Ms McIlroy between 19 October 2010 and 13 July 2015.
On 15 January 2015 Ms McIlroy notified Centrelink that her income had increased to $660/week and provided a copy of her payslip.[4] There are other records of contact which will be discussed later.
[4] Exhibit 1, T Documents, T19, pages 375 and 377, Documented customer contact, 15 January 2015; T13, pages
130-131, Payslips for the period 18 December 2014 – 24 December 2014.
On 6 February 2015 Ms McIlroy notified Centrelink that her income had increased to $682/week.[5]
[5] Exhibit 1, T Documents, T19, page 378, Documented customer contact, 6 February 2015.
On 27 October 2015 Ms McIlroy notified Centrelink that her income between 14 October 2015 and 27 October 2015 was $1,500.[6]
[6] Exhibit 1, T Documents, T19, page 385, Documented customer contact, 27 October 2015.
On 29 October 2015 Centrelink wrote to Ms McIlroy requesting she provide her payslips for the period 1 December 2014 and 19 October 2015.
Because Ms McIlroy did not respond to Centrelink’s request for her to provide her payslips, Centrelink suspended her PP on 4 November 2015.[7] Ms McIlroy then provided the requested payslips on 10 November 2015.[8]
[7] Exhibit 1, T5, page 32, Letter from Centrelink to Ms McIlroy dated 4 November 2015; T19, page 387, Documented
customer contact, 4 November 2015.
[8] Exhibit 1, T Documents, T13, page 126, Centrelink record dated 10 November 2015; T19, page 389, Documented
customer contact, 10 November 2015.
On 11 December 2015 Ms McIlroy was made aware that she potentially had been overpaid.[9] On 15 December 2015 Ms McIlroy wrote to Centrelink to say she had tried on several occasions to contact Centrelink regarding a letter she received for an overpayment. Ms McIlroy requested permission to pay the overpayment back at $15 per fortnight. Ms McIlroy states that the payment in question was an error by Centrelink as she did report her earnings. Ms McIlroy says that she spoke to someone from Centrelink who acknowledged that there was a computer error which should be corrected. Ms McIlroy says she received the continued payments in good faith presuming that the payments would be corrected.[10]
[9] Exhibit 1, T Documents, T19, page 391, Documented customer contact, 11 December 2015.
[10] Exhibit 1, T Documents, T6, page 34, Letter from Ms McIlroy to Centrelink dated 15 December 2015.
On 28 January 2016 Centrelink advised Ms McIlroy that earnings from Townsville Scaffold Hire had not been taken into account in calculating her PP between 26 November 2014 and 10 November 2015 and that therefore she had been overpaid $3742.14 (“PP Debt”).[11]
[11] Exhibit 1, T Documents, T7, page 35, letter from Centrelink to Ms McIlroy dated 28 January 2016.
On 8 April 2016 Ms McIlroy provided Centrelink with information regarding her income and assets which indicated that before tax and other deductions she was earning $1,200 per fortnight as a casual employee at Townsville Scaffold Hire.[12]
[12] Exhibit 1, T Documents, T8, pages 37 – 57, Income And Assets Form completed by Ms McIlroy dated 3 April
2016.
On 18 April 2016 Ms McIlroy’s employer, Townsville Scaffold Hire completed an Employment Declaration Form and provided Payroll Transaction Details which confirmed:[13]
(a)that Ms McIlroy was employed by Townsville Scaffold Hire on 6 May 2010;
(b)Ms McIlroy worked approximately 24 hours a week; and
(c)the earnings made by Ms McIlroy in the Period.
[13] Exhibit 1, T Documents, T9, pages 58 – 106, Employment Declaration Form and Payroll Transaction Details
provided 18 April 2016.
On 16 August 2016 Ms McIlroy agreed to repaying the debt by way of Centrelink withholding $15.00/fortnight from her PP.[14]
[14] Exhibit 1, T Documents, T19, page 398, Documented customer contact dated 16 August 2016.
On 5 September 2016 Centrelink recalculated the total debt owed to be $7,409.46 as a result of obtaining the payslips and information from Ms McIlroy’s employer which indicated that Ms McIlroy had been overpaid $3,667.32 between 6 October 2010 and 25 November 2014 as well as $3,742.14 between 26 November 2014 and 13 October 2015.[15]
[15] Exhibit 1, T Documents, T19, page 399, Documented customer contact dated 5 September 2016.
On 5 September 2016 Ms McIlroy told Centrelink that she notified Centrelink in October 2012 when her income changed and she was aware that she had to report any changes to her income. The Centrelink record of that conversation records that Ms McIlroy said she “felt she only had slight increases due to overtime as~~such didn’t contact to report” it to Centrelink.[16]
[16] Exhibit 1, T Documents, T19, page 400, Documented customer contact dated 5 September 2016.
Ms McIlroy sought a review of Centrelink’s original decision to raise the PP Debt by an Authorised Review Officer (“ARO”) on the grounds that the Debt was caused by a Centrelink error and that she has always notified Centrelink of changes in her circumstances.[17] The appeal to the ARO was unsuccessful. The ARO found that the PP Debt had not been raised incorrectly, but altered the debt payable as a result of having been provided with the actual earnings from Townsville Scaffold Hire, to $7,701.77.[18]
[17] Exhibit 1, T Documents, T10, page 107, Authorised Review Officer Decision dated 31 October 2016.
[18] Exhibit 1, T Documents, T10, pages 107-113, Authorised Review Officer Decision and Notes dated 31 October
2016.
Ms McIlroy then lodged an application for review with the Social Services and Child Support Division (“SSCSD”) of this Tribunal.[19] The SSCSD rejected Ms McIlroy’s claim and affirmed the ARO’s decision on 20 March 2017.[20]
[19] Exhibit 1, T Documents, T11, page 114, Letter from AAT to Centrelink dated 9 November 2016.
[20] Exhibit 1, T Documents, T2, pages 4 – 9, SSCSD’s Decision and Reasons for Decision dated 20 March 2017
Ms McIlroy has sought a review of the SSCSD’s decision by this Tribunal and submitted in her application that:[21]
(a)she did not under declare her income and had kept Centrelink informed through letters and phone calls;
(b)she contacted Centrelink every time she saw a wage error; and
(c)she disagreed with the amount of debt calculated by Centrelink.
[21] Exhibit 1, T Documents, T1, pages 1 – 3, Application for Second Review of Decision dated 12 April 2017.
ISSUES FOR DETERMINATION
The issues for determination are whether:
(a)Ms McIlroy has been overpaid PPs;
(b)the PP Debt is recoverable; and, if yes
(c)the PP Debt should be written off; or
(d)the PP Debt should be waived due to administrative error; or
(e)“special circumstances” exist such that the PP Debt should be waived.
WAS MS MCILROY OVERPAID PP PAYMENTS?
Pursuant to section 500 of the Social Security Act 1991 (Cth) (“the Act”), entitlement to PP is dependent upon a person having a PP child. Sections 1068A and 1068B of the Act set out how the rate of a parent’s PP is determined depending on whether an applicant is single or partnered.
Pursuant to section 1073B of the Act, where:
(a)a person is receiving, relevantly, a PP; and
(b)the rate of PP is worked out with regard to an income test module (see section 1068A-B1); and
(d)the person earns, derives or receives employment income during an instalment period;
that person is taken to earn, drive or receive, on each day in that instalment period, an amount of employment income worked out by dividing the total amount of the employment income by the number of days in the period.
The Secretary submits that the income received by Ms McIlroy during the Period was in excess of the amount Ms McIlroy reported to Centrelink.
Based on the employment income earned during the Period Ms McIlroy was entitled to receive PPs totalling $43,644.08.[22] However, the amount of PP actually paid to Ms McIlroy was $51,266.66. As a result, Ms McIlroy was overpaid PPs totalling $7,622.58.
[22] Exhibit 2, Secretary’s Statement of Issues, Facts and Contentions dated 11 October 2017, Attachment B.
The Secretary arranged for Mr Gevers, the Operational Team Leader of the Department’s Debt Management Branch to recalculate the debt. Mr Gevers detected an error. He found that $79.19 for the period 24 December 2014 and 6 January 2015 had not been deducted from Ms McIlroy’s payments. As a result the Secretary submits that the PP Debt should be reduced to $7,622.58.[23]
[23] Exhibit 2, Secretary’s Statement of Issues, Facts and Contentions dated 11 October 2017, Attachment B.
The Secretary submits that the entitlement calculations performed by Centrelink, which gave rise to the PP debt, have been calculated in accordance with the legislative obligations.
Having received a further explanation from Mr Gevers, Ms McIlroy no longer disputes how the PP Debt has been calculated.[24]
[24] Exhibit 4, Email from Mr Gevers to Mr Kyranis dated 12 March 2018.
Centrelink calculated the PPs and the PP Debt in accordance with the Act and the Guide.
Section 1223 of the Act provides that overpaid PP debts are debts due to the Commonwealth.
The Tribunal finds that Ms McIlroy owes the PP Debt to the Commonwealth.
IS THE PP DEBT RECOVERABLE?
Even if a debt is owed, the Secretary may write off, or waive, a debt in certain circumstances (see sections 1236, 1237A and 1237AAD of the Act).
Should the PP Debt be written off?
The Secretary may write off a debt in certain circumstances set out in section 1236(1A) of the Act. Those sections provide that a debt may be written off, relevantly, where:
(a)the debt is irrecoverable at law; or
(b)the debtor has no capacity to repay the debt; or
(c)…..
(d)it is not cost effective for the Commonwealth to take action to
recover the debt.
A debt is taken to be irrecoverable at law if, and only if there is no proof of the debt capable of sustaining legal proceedings for its recovery: section 1236(1B) of the Act.
If a debt is recoverable by means of section 1236(1C) of the Act:
(a)Deductions from the debtor’s social security payment; or
(b)deductions under section 84 of the A New Tax System (Family Assistance) (Administration) Act 1999; or
(c)setting off under section 84A of that Act; or
the person is taken to have a capacity to repay the debt unless recovery by those means would cause the person severe financial hardship.
(my emphasis)
Is the debt irrecoverable at law? (section 1236, Act)
None of the circumstances set out in section 1236(1) exist in this case and therefore I find the debt is not irrecoverable at law.
Does Ms McIlroy have the capacity to repay the debt? (section 1236(1C), Act)
If a debt is recoverable by means of deductions from social security payments, income tax refunds or family assistance payments, the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship.
The issue is whether Ms McIlroy is suffering from “severe financial hardship”.
On 8 December 2016 Ms McIlroy provided a Statement of Financial Circumstances which indicated that she:[25]
(a)earns or receives approximately $1,885 per fortnight made up of:
(i)$1050 per fortnight (gross) employment income;
(ii)$505 per fortnight from Centrelink;
(iii)$330 per fortnight by way of child support;
(b)has general($1,086), household($469) and transport($248) expenses per fortnight of approximately $1,803; and
(c)debts of approximately $45 per fortnight.
[25] Exhibit 1, T Documents, T12, pages 116-120, Statement of Financial Circumstances dated 8 December 2016.
Ms McIlroy has been repaying the debt by way of fortnightly deductions of $15.00.[26]
[26] Exhibit 2, Secretary’s Statement of Facts, Issues and Contentions dated 11 October 2017, para 24, Attachment C.
The Secretary submits that Ms McIlroy is not suffering from severe financial hardship and has a clear capacity to repay the debt by instalments. Other Tribunal decisions have determined that severe financial hardship needs to involve severe or extreme financial suffering and that a person’s entire financial position would need to be materially less than the current rate of their pension.[27]
[27] Re Lumsden and Secretary, Department of Social Security [1986] AATA 228; Stubbs and Secretary, Department
of Family and Community Services [2003] AATA 729; L and Department of Social Security [1995] AATA 159;
Secretary, Department of Family and Community Services and Birgden [2003] AATA 67.
There is no evidence that Ms McIlroy does not have the capacity to pay and therefore the PP Debt should not be written off pursuant to section 1236(1A) of the Act.
Ms McIlroy did not seek to argue that she was in severe financial hardship.
Is it cost-effective for the Commonwealth to recover the debt? (1236(1A)(d), Act)
There is no indication from the Secretary that it is not cost-effective for it to recover the debt.
SHOULD THE PP DEBT BE WAIVED DUE TO ADMINISTRATIVE ERROR? (SECTION 1237A, ACT)
Section 1237A of the Act provides:
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).
Therefore, 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.
If administrative error was the sole cause for the debt arising, the Secretary must waive the right to recover the debt. The debt “must be "attributable solely" to administrative error. Administrative error must be the sole cause, not merely one of multiple causes.[28]
[28] Secretary, Department of Family & Community Services v Sekhon[2003] FCA 76, per Wilcox J (at [41]) and on
appeal to the Full Federal Court Sekhon v Secretary, Department of Family and Community Services[2003] FCAFC 190, at [23].
The Tribunal notes that the Guide to Social Security Law (“the Guide”) which is used by Centrelink in interpreting and applying the provisions of the Act. The Tribunal is not bound to apply the Guide but it may, and it should, apply it in exercising its discretion unless it is unlawful or “tends to produce an unjust decision”.[29] Paragraph 6.7.3.30 provides the following guidance:
[29] Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634, at 645.
When is a debt attributable solely to administrative error?
In general, wherever a mistake has been made in administering a payment, the debt will arise 'solely to an administrative error' providing the recipient's conduct has not contributed to the debt in any way.
Examples of administrative error include mistakes in:
·calculating the amount of a payment,
·determining which social security payment/s a person is entitled to be paid, and
·correctly actioning information provided by the recipient.
The requirement that part of the debt must have arisen 'solely' from administrative error means that there must have been no other factors that caused the debt to arise or contributed to the debt arising. The part of the debt must have arisen as a result of administrative error alone.
Ms McIlroy has consistently argued through her appeal process that she contacted and informed Centrelink of every change in her income.[30]
[30] Exhibit 1, T Documents, T6, page 34, Letter from Ms McIlroy to Centrelink dated 15 December 2015; T10, pages
107-113, Authorised Review Officer Decision and Notes dated 31 October 2016; T13, pages 121-122, Letter from Ms McIlroy to AAT dated 21 February 2017.
While not directly asserting that Ms McIlroy had not informed Centrelink of relevant income changes, the Secretary submitted that there is no definitive record of Ms McIlroy notifying Centrelink of an income change until 15 January 2015.
On 15 January 2015 Centrelink records indicate:[31]
15 January 2015:
'Customer contacted CC Adelaide on 15 January 2015 regarding General Enquiry for Parenting Payment Single. Information was obtained via Phone Call....
Customer's Query: Customer is advising of care arrangements with her daughter and also wishes to inform of increase of earnings... .
Call transferred to CSC/queue at (WHERE), F&P'
[31] Exhibit 1, T Documnts, T13, page 123, Centrelink phone record dated 15 January 2015.
On the same day (15 January 2015) Ms McIlroy notified Centrelink that her income had increased to $660/week and provided a copy of her payslip.[32]
[32] Exhibit 1, T Documents, T19, pages 375 and 377, Documented customer contact, 15 January 2015; T13, pages
130-131, Payslips for the period 18 December 2014 – 24 December 2014.
A Centrelink notice dated 15 January 2015 indicated that Ms McIlroy’s PPs was still being calculated on the basis that she was earning $924.00/fortnight, despite the updated information being provided. However, it is possible that this notice was generated before Ms McIlroy provided the updated information because the document lodgement service record indicates that Ms McIlroy’s payslips were not uploaded to Centrelink’s system until 4:47pm on that day.[33] Ms McIlroy said she did not think there was a need to notify Centrelink after receiving the 15 January 2015 notice because she believed there must have been a cross-over.
[33] Exhibit 1, T Documents, T13, page 130,Document lodgment service record dated 15 January 2015.

On 6 February 2015 Centrelink records indicate:[34]
6 February 2015:
'Customer contact E Services FAM on 6 Feb 2015 regarding General Enquiry for Child Care Assistance. Information was obtained via E-Mail using Internet.
Message Detail: ?Hi, I need to let you know I am increasing work and now will work 4 days a week and net $682 per week. Could you please let me know what I have to do to make these changes. Jodi Mcllroy
[34] Exhibit 1, T Documents, T13, page 124, Centrelink email record dated 6 February 2015.
The Secretary concedes that the Applicant attempted to advise Centrelink of a change in her income via phone and email respectively on 15 January 2015 and 6 February 2015 and therefore accepts a degree of defective administration on Centrelink’s part in failing to respond to Ms McIlroy's attempts to advise of a change in her income.[35]
[35] Exhibit 2, Secretary’s Statement of Facts and Contentions dated 11 October 2017, paras 29-32.
However, the Secretary argues that Ms McIlroy was sent notices after 15 January 2015 which would have alerted her to the fact that Centrelink was calculating her PPs on an incorrect income amount and she had an obligation to notify Centrelink of the correct amount. The Secretary contends that her failure to correct Centrelink each time an error was made “materially contributed to her being overpaid”.[36]
[36] Exhibit 2, Secretary’s Statement of Facts and Contentions dated 11 October 2017, para 34.
A consideration of the Centrelink records available show that, for example:
(a)on 7 February 2011 Ms McIlroy contacted Centrelink regarding the Australian Government Disaster Recovery Payment – there is no specific mention of her reporting changes in income;[37]
(b)on 10 February 2011 Ms McIlroy contacted Centrelink regarding an update for PP – there is no specific mention of her reporting changes in income;[38]
(c)on 11 February 2011 Ms McIlroy contacted Centrelink regarding claim for emergency recovery payment – there is no specific mention of her reporting changes in income;[39]
(d)on 18 January 2012 Ms McIlroy contacted Centrelink regarding family tax benefit – and parenting payment – discussion of a need to lodge her income tax return and Ms McIlroy confirming she cannot get any details of her income from her ex-partner’s business;[40]
(e)on 1 February 2012 Ms McIlroy contacted Centrelink regarding parenting payment – Ms McIlroy informed Centrelink that her income was $32,000 for the period 1 July 2009 – 2 February 2010, and that she did not work until May 2010. Ms McIlroy states in her message that she was still having difficulties obtaining income information from her ex-partner so that she can lodge tax returns;[41]
(f)on 8 February 2012 Ms McIlroy contacted Centrelink regarding parenting payment – and needing her account number so she could obtain her PAYG information - there is no specific mention of her reporting changes in income;[42]
(g)on 25 June 2012 Ms McIlroy contacted Centrelink regarding changes in her contact details, address and accommodation – there is no specific mention of her reporting changes in income;[43]
(h)19 March 2013 Ms McIlroy contacted Centrelink regarding changes in her contact details, address and accommodation – there is no specific mention of her reporting changes in income;[44]
(i)on 8 April 2013 Ms McIlroy contacted Centrelink regarding changes in her assets, address and rent details – there is no specific mention of her reporting changes in income;[45] and
(j)on 28 January 2016 a Centrelink officer recorded “the incorrect coding of $462.00 1WE 23/6/2010 was identified to have not been zero’d off. I have zero’d this off from 26 November 2014 and used multical to calculate the debt…Debt is now reduced to $3,742.14”.[46]
[37]         Exhibit 1, T Documents, T19, page 356, Centrelink record dated 7 February 2011.
[38]         Exhibit 1, T Documents, T19, page 358, Centrelink record dated 10 February 2011.
[39]         Exhibit 1, T Documents, T19, page 359, Centrelink record dated 11 February 2011.
[40]         Exhibit 1, T Documents, T19, page 360-361, Centrelink record dated 18 January 2012.
[41]         Exhibit 1, T Documents, T19, page 362 Centrelink record dated 1 February 2012.
[42]         Exhibit 1, T Documents, T19, page 363 Centrelink record dated 8 February 2012.
[43]         Exhibit 1, T Documents, T13, page 129, Centrelink record dated 25 June 2012.
[44]         Exhibit 1, T Documents, T19, page 370, Centrelink record dated 19 March 2013.
[45]         Exhibit 1, T Documents, T13, page 128, Centrelink internet record dated 8 April 2013.
[46]         Exhibit 1, T Documents, T13, page 125, Centrelink phone record dated 28 January 2016.
Ms McIlroy states in a written submission that:[47]
·She had questioned Centrelink for almost two years about why she was getting more than she was entitled to. The Tribunal interprets this to mean that she commenced questioning the PPs received from about 2015. This would be consistent with Centrelink’s record which demonstrates that Ms McIlroy made contact specifically to provide updated earnings information on 15 January 2015.
·“I have made several attempts to contact Centrelink to inform them, I was increasing both hours and pay rate in 2015 as my Daughter was starting school”. This is also consistent with Centrelink’s record which demonstrates that Ms McIlroy made contact specifically to provide updated earnings information on 15 January 2015 which would have been just prior to her daughter commencing school.
·“I don’t believe my call logs etc are correct and not all my attempts have been recorded.”
·“There is nothing in my records that show I had ever contacted Centrelink with changes.”
[47] Exhibit 2, Secretary’s Statement of Facts, Issues and Contentions dated 11 October 2017, para 24, Attachment A,
Written submissions of Ms McIlroy dated 11 September 2017.
There are three time periods which need to be considered separately:-
·The first time period is between 6 October 2010 and 14 January 2015
·The second time period is between 15 January 2015 and 9 June 2015; and
·The third time period is between 10 June 2015 and 13 October 2015.
First time period - 6 October 2010 to 14 January 2015
In relation to the first time period there is no evidence in Centrelink’s records that Ms McIlroy advised Centrelink of her changes in income.
There are other contact records during the first period however none of them specifically mention that Ms McIlroy was contacting Centrelink to advise of a change in her earnings.[48] Ms McIlroy argues her earnings would have been discussed but there is simply no record of this. Further, a lot of the contact was via the internet so it would record the information that Ms McIlroy had provided or uploaded.
[48] Exhibit 1, T Documents, T19, pages 364-383, Centrelink records.
Centrelink notices were sent to Ms McIlroy during the first period which also indicated the rate at which Ms McIlroy’s PP was being calculated. Given that Ms McIlroy says she often contacted Centrelink one would expect at least one record confirming this. Further, Ms McIlroy’s evidence is more consistent with a finding that she first contacted Centrelink about a change in earnings in early 2015 because:
(a)this is when her income was increased more substantially due to her increased working hours once her daughter commenced school; and
(b)prior to that she “felt she only had slight increases due to overtime as~~such didn’t contact to report” it to Centrelink.[49]
[49] Exhibit 1, T Documents, T19, page 400, Documented customer contact dated 5 September 2016.
As a result, the Tribunal is unable to find that the Debt arose in the first period solely due to administrative error. There is no basis for the PP Debt which arose in the first period to be waived under section 1237A of the Act.
Second time period - 15 January 2015 to 9 June 2015
From 15 January 2015 Centrelink had the requisite information and yet did not correct its records. The Secretary said Ms McIlroy should have known when she received the next notice. However, the next notice was not issued until 9 June 2015.
Accordingly, the Tribunal finds that the Debt which arose during the second period was solely attributable to administrative error. The issue is whether the PPs received during this period were received in good faith.
What is meant by “in good faith”?
The phrase “in good faith” is not defined in the legislation. However, the phrase has been considered by the Federal Court on numerous occasions. The Federal Court has held that:
(a)whether a payment has been received “in good faith” is determined by considering the state of mind of the recipient and is a subjective test;[50]
(b)“Wilful blindness is itself a state of mind”;[51] and
(c)the words "good faith" should be given their ordinary meaning.[52]
[50]         Pledger v Secretary, Department of Family & Community Services[2002] FCA 1576, at [59].
[51]         Pereira v Director of Public Prosecutions (1988) 82 ALR 217 at 219-220.
[52]         Pledger v Secretary, Department of Family & Community Services[2002] FCA 1576, at [103].
In Haggerty v Department of Education, Training and Youth Affairs (2000) 31 AAR 529 French J (as he then was) described when a lack of good faith will arise as follows:
[16] … want of good faith will arise where there is a positive belief that the payment has been made by mistake. It will also arise where there is a suspicion held by the recipient that he or she may not be entitled to the payment made or a doubt as to the entitlement coupled with some objective basis for such suspicion or doubt. The provision does not, however, authorise the imputation of want of good faith in any of the senses above described simply because there are in existence objective facts which would raise a belief or a doubt or a suspicion of non entitlement in the mind of some imaginary recipient. (emphasis added)
In Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484 (“Jazazievska”) Cooper J said:[53]
…a person does not act in good faith where the person turns a blind eye to circumstances which raise doubt as to the entitlement of the person to receive and retain the payment or refuses to make reasonable inquiries where doubt exists...
[53] [2000] FCA 1484, at [41].
In Jazazievska, Ms Jazazievska had been overpaid family payments. The issue was whether she had received those payments in good faith. The evidence indicated that Ms Jazazievska had sufficient doubt as to the amount of entitlement she had received that she asked her bank about it. However, she did not query Centrelink directly. Cooper J found that this meant that she did not receive and retain the payments in good faith because she did not have an honest belief that she was entitled to receive and retain the payment.[54]
[54] [2000] FCA 1484, at [44].
The difference between what Ms McIlroy should have received and what she actually received each fortnight during the second time period would not have been so significant to have drawn Ms McIlroy’s attention. Further, the fortnightly payments received in total often varied even when calculated on the same earnings amount.
Accordingly, the Tribunal finds that the Debt which arose during the second period ought to be waived under section 1237A of the Act as it was solely attributable to administrative error.
Third time period - 10 June 2015 to 13 October 2015
From 9 June 2015 Ms McIlroy would have been aware that Centrelink was still calculating her PPs on an incorrect earning amount.[55] However there is no record that Ms McIlroy contacted Centrelink regarding this error. The first time Centrelink records Ms McIlroy as having provided any additional income information is on 27 October 2015. There is no record that Ms McIlroy emailed or updated any other income information between 9 June 2015 and 27 October 2015. The Tribunal appreciates that Centrelink’s records may not always be accurate but in this instance the Tribunal considers it more likely than not that Ms McIlroy felt that as she had already told Centrelink her income, she did not need to do anything else. She assumed Centrelink was calculating her PP correctly. Even if that is the case, it means that the debt in the third period cannot be found to be attributable solely to administrative error.
[55] Exhibit 1, T Documents, T14, page 231, Centrelink notice dated 13 July 2015.
Ms McIlroy acknowledged during the ARO hearing that she expected to receive a reduced rate of PP following the increase in her fortnightly income, which did not occur.[56]
[56] Exhibit 1, T Documents, T10, page 112, Authorised Review Officer Decision and Notes dated 31 October 2016.
The PP Debt arose due to a reconciliation by Centrelink of the PP amounts paid to Ms McIlroy during a time when she was not eligible to receive those payments.
The PP Debt did not arise solely from, or in relation to any, administrative error.
There is no basis for the PP Debt which arose in the third period to be waived under section 1237A of the Act.
ARE THERE SPECIAL CIRCUMSTANCES THAT MAKE IT DESIRABLE FOR THE PP DEBT TO BE WAIVED? (SECTION 1237AAD, ACT)
The Secretary may also waive a debt owed, under section 1237AAD of the Act, if satisfied:
(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.
Any circumstances relied upon to be “special” must be unusual, different, uncommon or exceptional.[57]
[57]The core requirement for “special reasons” is that there be something “unusual or different”: French J in Boscolo v Secretary, Department of Social Security [1999] FCA 106; (1999) 90 FCR 531, at [18]; Barker J in Kazmierczak v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] FCA 1084,
The Secretary submits that there is no evidence that special circumstances exist and that therefore the discretion to waive the debt cannot be invoked.[58]
[58] Exhibit 2, Secretary’s Statement of Facts and Contentions dated 11 October 2017, para 44.
Ms McIlroy confirmed at the hearing that she did not rely on any “special circumstances” for the purpose of waiving the Debt.
On the available evidence, the Tribunal finds that there are no “special circumstances” and that there is no basis for the PP Debt to be waived under section 1237AAD of the Act.
CONCLUSION
The Tribunal affirms the decision under review insofar as it relates to a debt for the period 6 October 2010 to 14 January 2015 and 10 June 2015 to 13 October 2015 and sets aside the remainder of the decision and substitutes it with a decision that the portion of the debt attributable to the period between 15 January 2015 and 9 June 2015 be waived pursuant to section 1237A of the Social Security Act 1991 (Cth) and remits the matter to the respondent for re-calculation of the debt.

I certify that the preceding 80 (eighty) paragraphs are a true copy of the reasons for the decision herein of Member D K Grigg

.........................[Sgd]...............................................
Associate
Dated: 19 June 2018

Date of hearing: 15 May 2018

Date final submissions received: 17 May 2018

Applicant: By telephone

Respondent: In person

Advocate for the Respondent: Mr Jake Kyranis, Seconded Lawyer

Solicitors for the Respondent: Department of Human Services

at [37].

Date of hearing:	15 May 2018
Date final submissions received:	17 May 2018
Applicant:	By telephone
Respondent:	In person
Advocate for the Respondent:	Mr Jake Kyranis, Seconded Lawyer
Solicitors for the Respondent:	Department of Human Services