Price and Secretary, Department of Social Services (Social services second review) - [2024] AATA 494

Price and Secretary, Department of Social Services (Social services second review) [2024] AATA 494 (21 March 2024)
Division:GENERAL DIVISION
File Numbers: 2023/2700; 2023/2716; 2023/3561; and 2023/3562
Re:Merrick Price and Xiaoling Li
APPLICANTS

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Senior Member A.A. Nikolic, AM CSC
Date:21 March 2024
Place:Melbourne

The Tribunal affirms the reviewable decisions.
......................[sgd]..................................................
Senior Member A.A. Nikolic, AM CSC
CATCHWORDS
SOCIAL SECURITY – Newstart Allowance / Jobseeker Payment – whether income needed to be reported to Centrelink – Applicants failed to report change in circumstances within requisite time – Applicants were overpaid benefits – debts due to Commonwealth – whether debts can be written off or waived – no reason to write off debts – no sole administrative error by Commonwealth – no special circumstances – decision under review affirmed.
LEGISLATION
A New Tax System (Family Assistance) (Administration) Act 1999 (Cth)
Administrative Appeals Tribunal Act 1975 (Cth)
Social Security Act 1991 (Cth)
Social Security (Administration) Act 1999 (Cth)
CASES
Angelakos v Secretary, Department of Employment and Workplace Relations (2007) 100 ALD 9
Briginshaw v Briginshaw (1938) 60 CLR 336
Dranichnikov v Centrelink (2003) 75 ALD 134
Read v Commonwealth (1988) 167 CLR 57
Sekhon v Secretary, Department of Family and Community Services (2003) 132 FCR 126
REASONS FOR DECISION
Senior Member A.A. Nikolic, AM CSC
21 March 2024
INTRODUCTION

Mr Merrick Price and Ms Xiaoling Li have asked the Tribunal to review debt recovery decisions made by the Respondent, which were affirmed by the Social Services and Child Support Division of the Tribunal (“AAT1”) on 28 September 2022.[1]
[1] Exhibit R1, 9-17.
The hearing was held via telephone at the Tribunal’s Melbourne Registry on 18 March 2024. Mr Price and Ms Li were self-represented. The Respondent was represented by Ms Naoimh Donaghy, a solicitor from HWL Ebsworth.
For the following reasons the Tribunal affirms the reviewable decisions.
BACKGROUND FACTS
Ms Li is 56 years of age, was born in China, and commenced living in Australia on 4 May 2008.[2] She is married to and lives with Mr Price, who is 64 years of age. The following background facts underlie their applications to the Tribunal:
[2] Ibid 22.
(a)On 22 December 2019, Ms Li lodged a Newstart Allowance claim stating that she:[3]
[3] Ibid 20-9.
(i)is married to and living with Mr Price;
(ii)is ‘able to provide accurate information regarding [Mr Price’s] circumstances’;
(iii)does not authorise anyone to act as her payment or correspondence nominee, or to make enquiries on her behalf;
(iv)has some superannuation savings with Mr Price, a home they are paying off, and own a block of land interstate;
(v)and Mr Price ‘….do not receive any other income’ and ‘have never claimed or received, and we cannot claim, compensation, insurance and/or damages due to personal injury, accident or illness’;
(vi)receives a monthly Chinese age pension payment of ‘CNY 1863.78’.[4] Ms Li’s uncontested oral testimony is that this pension ceased upon her becoming an Australian citizen in 2019; and
[4] It was not disputed during the hearing that this equated to approximately AUD$400 per month.
(vii)understands her obligation to ‘provide true and accurate information about [her] current circumstances’, and that she ‘will update or add details about [her] circumstances that are no longer accurate’.
(b)Mr Price lodged a Newstart Allowance claim on 22 December 2019,[5] in which he stated that neither he nor Ms Li had ever ‘claimed or received, and we cannot claim, compensation, insurance and/or damages due to personal injury, accident or illness’.[6] In response to a question relating to ‘Other Income’, Mr Price responded: ‘Xiaoling and I do not receive any other income’. Mr Price also stated that he understands his obligation to ‘provide true and accurate information about [his] current circumstances’, and that he ‘will update or add details about [his] circumstances that are no longer accurate’.[7]
[5] Ibid 30-40.
[6] Ibid 38.
[7] Ibid 40.
(c)Services Australia (“Centrelink”) granted Ms Li and Mr Price Newstart Allowance based on the information provided.[8] Payment notices sent thereafter stated they were obligated to inform Centrelink about any change in their circumstances ‘within 14 days’ (emphasis in original).[9] Other notices required them to tell Centrelink: ‘within seven days’ if you (or your partner) have received compensation or became aware that you will receive compensation’ (emphasis in original);[10]
[8] Ibid 258, 328.
[9] Ibid 230-231, 233, 243, 245, 254, 259, 267, 329, 330, 333, 336-337, 339, 341, 344, 346, 349, 351.
[10] Ibid 64, 223-234, 315, 337.
(d)On 14 February 2020, Mr Price submitted a form to Centrelink advising he was paid ‘monthly retrospective’ income replacement payments of $3850 since 23 December 2019 (“MOD C Form”).[11] This followed an injury sustained at home on 1 March 2019.[12] Mr Price did not complete the section of the form titled ‘About YOUR PARTNER’. He also did not provide a copy of the income protection insurance policy as required by Question 15 on this form.[13] At no stage did Ms Li inform Centrelink about Mr Price’s income replacement payments;
[11] Ibid 61-4.
[12] Ibid 62.
[13] Ibid.
(e)On 20 March 2020, Ms Li and Mr Price transferred to Jobseeker Payment following the legislative repeal of Newstart Allowance;
(f)On 20 April 2020, a Centrelink file note stated that follow-up was required to obtain a copy of Mr Price’s income replacement policy, ‘including commencement date’.[14] Mr Price failed to provide a copy of this policy, and, on 29 June 2020, Centrelink made its own enquiries with his insurer.[15] The insurer advised that Mr Price received monthly payments of $3870 since 5 June 2019.[16] The following then occurred:
[14] Ibid 385 (20 April 2020), 411.
[15] Ibid 65-7.
[16] Ibid.
(i)On 23 July 2020, Centrelink cancelled Mr Price’s Jobseeker payment from the date his Newstart Allowance commenced.[17] This was because the payments he received from his insurer exceeded the relevant income test limit and meant his entitlement to Newstart was nil.[18] The overpayment for the period 29 December 2019 to 17 July 2020 was calculated as $10,829.51.
[17] Ibid 384.
[18] Ibid 278.
(ii)When Ms Li’s Centrelink account was updated with Mr Price’s income information, this reduced her Newstart / Jobseeker payments and resulted in a recoverable debt of $4329.38 for the period 5 June 2019 to 17 July 2020.
(g)On 2 February 2021, both Ms Li and Mr Price requested a review of Centrelink’s decision;[19]
(h)On 7 April 2021 and 3 May 2021, Mr Price provided some correspondence from his insurer, setting out details of payments received from 5 June 2019;[20]
(i)On 12 May 2021, an Authorised Review Officer of Centrelink affirmed the original decision in Mr Price’s case.[21] On 27 June 2022, Mr Price sought review in the Tribunal,[22] but on 28 September 2022, AAT1 affirmed the reviewable decisions.[23]
(j)On 13 May 2021, an Authorised Review Officer of Centrelink varied the original debt decision in Ms Li’s case based on the additional information received about Mr Price’s income.[24] The effect of this decision was to increase Ms Li’s debt to $5193.06 for the period 19 December 2019 until 4 March 2021.[25] On 28 June 2022, Ms Li sought review of this decision,[26] but on 28 September 2022, AAT1 affirmed the reviewable decisions.[27]
(k)Mr Price declared in a Statement of Financial Circumstances dated 31 August 2022 that he was then employed as a Customer Service Operator on $1172 per week.[28]
(l)On 24 April 2023, Ms Li and Mr Price asked the General Division of the Tribunal to review the AAT1 decisions.[29]
(m)On 5 September 2023, Centrelink sought further and better particulars from Mr Price’s insurer,[30] pursuant to s 196 of the Social Security (Administration) Act 1999 (Cth) (“Administration Act”).[31] This was subsequently provided.[32]
(n)On 12 September 2023, Centrelink issued a notice to Mr Price’s bank. The information provided by the bank confirmed what income protection payments were made by his insurer.[33] This information did not affect the quantum of Mr Price’s Centrelink debt ($10650.25) because the payments from his insurer exceeded the income test limit throughout the debt period, resulting in a nil entitlement. Ms Li’s debt was recalculated to $4562.28.[34] No repayment arrangements for either Ms Li’s or Mr Price’s debts are in place. In oral evidence Mr Price agreed that an amount of $1191.52 was garnished from his last tax return as part payment of the debt owed.
[19] Ibid 410, 498.
[20] Ibid 100-173.
[21] Ibid 70-81.
[22] Ibid 183.
[23] Ibid 9-17
[24] Ibid 82-5.
[25] Ibid.
[26] Ibid 189-195.
[27] Ibid 9-17.
[28] Ibid 94-5, 175-182, 211-215.
[29] Ibid 6.
[30] Ibid 530-532.
[31] Social Security (Administration) Act 1999 (Cth) (‘Administration Act’).
[32] Exhibit R1, 533-4.
[33] Ibid 535-643.
[34] Ibid 644.
ISSUES
The issues to be determined are whether:
(a)Mr Price and Ms Li were paid more than their correct entitlements and, if so;
(b)These overpayments constitute a debt to the Commonwealth and, if so;
(c)All or part of the debt may be written-off or waived.
RELEVANT LEGISLATION
The applicable law is contained in the Social Security Act 1991 (Cth) (“the Act”) and the Administration Act.[35]
[35] Social Security Act 1991 (Cth) (‘the Act’); Administration Act (n 31).
Newstart Allowance, which was replaced by Jobseeker Payment in 2020, is a means-tested benefit that varies depending on the income or other financial support a recipient receives.
Section 643 of the Act provides for the calculation of Newstart Allowance / Jobseeker Payment by using Benefit Rate Calculator B at the end of section 1068 of the Act. Module G of section 1068 of the Act provides a Method Statement for calculating the effect that a person’s ordinary income has on the maximum payment they are entitled to. Section 1068-G7A of the income test in Module G states that subject to certain exclusions, ‘ordinary income (except employment income) is to be taken into account in the fortnight in which it is first earned, derived or received’. Section 1068-G8 of the income test in Module G provides for ordinary income that is received at intervals longer than a fortnight.
Section 608(1) of the Act provides that a Jobseeker payment is not payable if the person’s payment rate would be nil. This is calculated with regard for a person’s ordinary income, which is defined at s 8(1) of the Act as income that is not maintenance income or an exempt lump sum.[36] This includes income from all sources for the period calculated without any reduction, other than a reduction under Division 1A.[37] The High Court of Australia has interpreted the term ‘income’ broadly.[38]
[36] Ibid s 8(1).
[37] Ibid s 1072, noting that Division 1A is not relevant in this application.
[38] Read v Commonwealth (1988) 167 CLR 57.
Recipients of benefits are legally obligated to report changes in their circumstances. Under section 68 of the Administration Act, the Secretary may issue a notice to social security recipients, requiring them to inform the Department of a specified event or change of circumstances, or upon becoming aware that a specified event or change of circumstances is likely to occur. Section 66A(2) of the Administration Act provides that they must do so ‘within 14 days after the day on which the event or change occurs…’. This is set out in letters Centrelink issues to recipients. Section 74 of the Administration Act provides that it is an offence to fail to comply with a notice given under section 68.
Section 100 of the Administration Act provides that a failure to report a change in circumstances within the requisite time, results in a social security payment becoming payable at the reduced rate on the day on which the change of circumstances occurred.
Section 1223(1) of the Act provides that if a person receives a payment they were not entitled to for any reason, the amount of the payment is a debt due to the Commonwealth, which is taken to have arisen when the person obtains the benefit of the payment.
Section 1236 of the Act provides for when a debt ‘may’ be written off, including when it is irrecoverable at law, or the debtor has no capacity to repay it, or the debtor’s whereabouts are unknown, or it is not cost-effective for the Commonwealth to recover the debt.
Section 1237A of the Act states that the Secretary ‘must’ waive the right to recover the proportion of a debt solely attributable to an administrative error by the Commonwealth if the debtor received the payments giving rise to the administrative error proportion in good faith. Waiver of the debt caused by administrative error is not permitted in circumstances when the debt was partly caused by other factors, such as error by the debtor.
Section 1237AAD of the Act provides that all or part of a debt may be waived where:
(a)the debt ‘did not result wholly or partly’ from a person ‘making a false statement or a false representation’ or failing to comply with a provision of the Act or Administration Act; and
(b)there are special circumstances (other than financial hardship alone) that make it desirable to waive the debt; and
(c)it is more appropriate to waive rather than write off the debt or part of the debt.
The term ‘special circumstances’ is not defined in the Act, but the Tribunal and courts have frequently considered this.[39] The specific circumstances of each case determine if it would be unjust, unreasonable, or inappropriate for the debt to be recovered. Decision-makers consider whether an exception should be made and the usual rule should not apply.
[39] Angelakos v Secretary, Department of Employment and Workplace Relations (2007) 100 ALD 9, 17 [33]; Dranichnikov v Centrelink (2003) 75 ALD 134, 148 [65]-[66].
EVIDENCE
The following documents were taken into evidence:
(a)Documents lodged by the Respondent numbering 647 pages;[40] and
(b)Emails from Mr Price dated 17 July 2023 and 27 August 2023.[41]
[40] Exhibit R1.
[41] Exhibit A1.
Oral testimony of Applicants
Mr Price’s evidence centred on the contention that unnamed Centrelink staff, including during a meeting on 21 January 2020, told him that income protection payments received from his insurer were not considered income and ‘didn’t need to be reported’. He agreed during the hearing, however, there is no written corroboration of this and stated that he relies solely on a ‘he said, she said scenario’. When put to Mr Price it seemed implausible that Centrelink staff would tell him income protection payments were not relevant to assessing his benefits, he disagreed. Mr Price said any errors or omissions in written forms he submitted were unintentional or resulted from confusion about what was required. He contends that he only made ‘a couple of errors’ and believes Centrelink should have reminded him to lodge information and documents he failed to provide. Other aspects of Mr Price’s evidence are summarised as follows:
(a)He is currently employed and owns a residential property and vacant block of land with Ms Li;
(b)Mr Price accepted he was on notice about his obligation to report changes in his and Ms Li’s income after receiving Centrelink notices. He agreed that he understood the type of information required to be reported within the permissible periods;
(c)Mr Price acknowledged that the claim in his Newstart application about never claiming or receiving compensation, insurance, and/or damages due to personal injury, accident, or illness, was incorrect.[42] He does not dispute that he received income protection benefits from a personal injury claim, nor the accuracy of a schedule of payments produced by the Respondent for the period 2 August 2019 to 6 May 2021. He agreed that this schedule was based on information provided by his insurer and bank.[43] Mr Price agreed that his reference to $3850 at question 17 of the MOD C form he submitted was less than the $4646.87 payment received from his insurer on 4 February 2020, which he attributed to mistakenly believing he only had to report payments that were received on a ‘regular monthly basis’;
(d)Mr Price accepted that he was notified of the first income support payment from his insurer ($381.88) on 2 August 2019, which was approximately five months prior to lodging his Newstart application, but which he did not disclose in his application. He agreed that Centrelink records on 21 and 28 January 2020 did not refer to his income protection payments, but claimed this is because Centrelink staff omitted to record what he told them.[44] The Applicant agreed the first time his insurer payments were referred to in a document was on 14 February 2020 in his MOD C form;[45]
(e)Mr Price agreed that he failed to complete the ‘About YOUR PARTNER’ section of the MOD C form or to provide a copy of his income protection policy as required by question 15 on that form.[46]
(f)Mr Price said he suffered a skin condition at the time his claim was being processed and referred to two medical certificates.[47] This is the only information provided about this condition, which Mr Price said in oral testimony is treated with a topical lotion that can be ‘obtained anywhere’.
(g)When asked about a statement of financial circumstances he previously completed,[48] Mr Price said costs had since risen for things like his mortgage, insurance payments, council rates, and other costs. He currently works and receives approximately $1300 weekly after tax.
[42] Exhibit R1, 38.
[43] Respondent’s Statement of Facts, Issues, and Contentions dated 16 January 2024 (“RSFIC”), 6 [3.22].
[44] Exhibit R1, 385-6.
[45] Ibid 61-4.
[46] Ibid 61-2.
[47] Ibid 386 (21 January 2020).
[48] Ibid 217.
In oral testimony, Ms Li said she received a pension from China, which ended after she obtained Australian citizenship in 2019. She is aware that Newstart / Jobkeeper payments are affected by Mr Price’s income. When asked by Ms Donaghy if she was aware that Mr Price received income protection benefits from his insurer in August 2019, Ms Li responded: ‘Sometimes he told me and sometimes he didn’t. I didn’t pay close attention to his things’. Ms Li said she was aware in February 2020 that Mr Price was receiving income protection benefits, and that it was her responsibility to accurately report changes to Centrelink about her and Mr Price’s circumstances. When asked why she didn’t do so, Mr Li said ‘all things are managed by [her] husband’ and she thought he would report whatever was necessary. She trusts Mr Price completely and ‘never thought [she] needed to do anything [her]self’. Ms Li agreed that she received notices from Centrelink setting out her reporting obligations and there was nothing preventing her from complying. When asked why she relied on Mr Price to report changes in her circumstances when she did not authorise anyone to act on her behalf in her Newstart Allowance application, Ms Li said she nevertheless deferred to Mr Price on such matters and ‘didn’t involve [her]self much’.
DID A DEBT ARISE?
At the start of the relevant debt period (29 December 2019) the rate of Newstart Allowance for a member of a couple pursuant to Module G, reduced by 50c for every $1.00 of income between $104.00 and $254.00 per fortnight, and by 60c for every $1.00 of income above $254.00, before reaching a cut-off amount of $983.34.[49] The income test thresholds changed throughout the debt period as detailed in The Guide to Australian Government Payments.[50] Although Jobseeker Allowance replaced Newstart Allowance on 20 March 2020, the same payment calculation methodology was applied. The difference was the introduction of Coronavirus Supplement at the rate of $550 fortnightly.
[49] RSFIC (n 43) 5, 11 [4.18].
[50] Ibid 655.

There is no dispute that Ms Li and Mr Price were a couple at the time they applied for and received Centrelink benefits but elected in their applications not to authorise nominees or allow third parties to make enquiries on their behalf. They were therefore individually liable for notifying Centrelink of changes in their circumstances.
There are multiple records in evidence summarising discussions between Mr Price and Centrelink officers. There is no basis to conclude, however, that Mr Price was subjected to ‘aggressive behaviour’ from Centrelink staff, or that staff ‘will alter facts’, or ‘lie as they don’t want adverse strikes against their names’,[51] or that he was advised by unnamed Centrelink staff on multiple occasions that his income protection payments were not assessable income and did not need to be reported. The Tribunal prefers the totality of the contemporaneous Centrelink records to Mr Price’s assertions and finds there is no acceptable reason he did not meet his reporting obligations. The Tribunal also rejects Mr Price’s submission that Centrelink should have reminded him about incomplete aspects on the forms he submitted. The onus is squarely on Mr Price and Ms Li as recipients of taxpayer-funded benefits to notify relevant changes in their circumstances. This includes Mr Price’s income protection payments. The Tribunal is unpersuaded by Ms Li’s evidence about relying on Mr Price to fulfill her reporting requirements to Centrelink, given that she did not authorise anyone to act as her nominee or make enquiries on her behalf. There is no persuasive reason for her not to have reported Mr Price’s income protection payments so that her entitlement to benefits could be accurately assessed.
[51] Exhibit A1, email dated 17 July 2023.
Mr Price’s advice to Centrelink on 14 February 2020 was incomplete regarding his ordinary income during the debt period.[52] He did not fully comply with his reporting obligations under ss 66A and 68(2) of the Administration Act. This includes because even after notifying Centrelink about income protection payments, he did not provide complete information about the payments received, when they were made, and a copy of the policy under which they were made. This resulted in him receiving benefits at the wrong rate. Pursuant to the income test in Module G of s 1068 of the Act, Mr Price was overpaid $10829.51 during the period 29 December 2019 to 17 July 2020. Mr Price also failed to complete the section of the MOD C form relating to Ms Li, and Ms Li failed to advise Centrelink about Mr Price’s income replacement payments, causing her to be overpaid $4562.28 for the period 29 December 2019 to 4 March 2021.
[52] Exhibit R1, 61-4.
In accordance with section 71 of the Family Assistance Administration Act,[53] the Tribunal is satisfied the overpaid amounts are debts due to the Commonwealth in accordance with section 1223 of the Social Security Act.[54]
[53] A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) s 71 (‘Family Assistance Administration Act’).
[54] The Act (n 35) s 1223.
Should the debts be recovered or written off?
The Tribunal is not satisfied there is any discretion to apply write off circumstances to the debts incurred. The debts are recoverable at law, the Applicants have the capacity to repay them, and there is no evidence recovery would cause severe financial hardship or is not cost-effective. The Applicants have some savings and superannuation, equity in their family home, and ownership of a block of land interstate. There are no discernible grounds to write off these debts.
Are there grounds to waive the debts due to sole administrative error?
For debts to be waived under section 1237A of the Act, they must have been caused solely by administrative error.[55] There is no persuasive basis to find that Mr Price was ever informed by Centrelink officials that the income replacement payments he received were not income and did not need to be declared. The Tribunal found this evidence implausible given the broad definition applied to income when determining eligibility for benefits. Moreover, Centrelink sent both Ms Li and Mr Price multiple written notices setting out their reporting obligations. Both Ms Li and Mr Price failed to comply with these obligations and were individually responsible for doing so. There was no obligation on the Respondent to make specific enquiries or to remind Mr Price about his failure to provide all the relevant information in forms he submitted.
[55] Sekhon v Secretary, Department of Family and Community Services (2003) 132 FCR 126, 135 [35].
Mr Price received the first of his income protection payments on 2 August 2019, which was approximately five months before he and Ms Li lodged their Newstart applications. It was this and subsequent failures to fully declare relevant income that resulted in the debts accrued. Only after Centrelink made its own enquiries with the insurer and Mr Price’s bank, could the precise calculation of the couple’s Newstart / Jobseeker entitlements be concluded. The Respondent acted upon information from the Applicants and there is no evidence the debts are solely attributable to administrative error by the Commonwealth. Accordingly, the debt cannot be written off or waived pursuant to section 1237A of the Act.
Waiver of debts for special circumstances
The Applicants’ circumstances are not sufficiently different or unusual or exceptional to enliven special circumstances. They have considerable assets, including realty. Mr Price works and earns approximately $1300 per week after tax. The skin condition Mr Price referred to does not enliven special circumstances.
DECISION
The reviewable decisions are affirmed.

I certify that the preceding 29 (twenty-nine) paragraphs are a true copy of the reasons for the decision herein of Senior Member A. Nikolic AM CSC

...........................[sgd].........................................
Associate
Dated: 21 March 2024

Date of hearing: 18 March 2024

Applicants: By telephone, self-represented

Advocate for the Respondent:

Solicitors for the Respondent:

By telephone, Ms Naoimh Donaghy

HWL Ebsworth