RDBG and Secretary, Department of Social Services (Social services second review) - [2021] AATA 2943

RDBG and Secretary, Department of Social Services (Social services second review) [2021] AATA 2943 (10 August 2021)
Division:GENERAL DIVISION
File Number: 2020/4848
Re: RDBG
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

AndXVST
OTHER PARTY

DECISION
Tribunal:Member K. Parker
Date:10 August 2021
Place:Melbourne

The Tribunal affirms the Decision Under Review.
.........[SGD]..................
Member K. Parker
Catchwords
DEBT – debts raised in respect of alleged overpayments of family tax benefits over two discrete periods – whether debts properly raised – whether debts should be waived or written off – decision under review affirmed
Legislation
Administrative Appeals Tribunal Act 1975 (Cth)
A New Tax System (Family Assistance) Act 1999 (Cth)
A New Tax System (Family Assistance) (Administration) Act 1999 (Cth)
Cases
Re Dean and Department of Education Science and Training [2005] AATA 586
Re Hill and Secretary, Department of Family and Community Services [1999] AATA 909
Re Lumsden and Secretary Department of Social Security (1986) 10 ALN N225
Re Secretary, Department of Family and Community Services and Temesgea [2002] AATA 1290
Re Secretary, Department of Social Security and Winters [1997] AATA 594
Re Woodward and Department of Family and Community Services [2001] AATA 818
Secondary Materials
Family Assistance Guide (Guide) - Refer Using the Family Assistance Guide | Family Assistance Guide (dss.gov.au)
REASONS FOR DECISION
Member K. Parker
10 August 2021

The Applicant, RDBG, and XVST are the separated parents of a child born in early 2018 (the Child).
This application involves an issue about two debts raised by Department of Human Services, now Services Australia (Centrelink) against RDBG in respect of alleged overpayments of family tax benefits (FTB) to him under A New Tax System (Family Assistance) Act 1999 (Cth) (the Act), during two discrete periods. Those periods are:
(a)28 April 2019 to 8 June 2019 (Period 1); and
(b)16 August 2019 to 16 September 2019 (Period 2).
RDBG contends that those debts should not have been raised against him or that they should be waived or written off.
This Tribunal has also reviewed the decision made regarding the related question of whether RDBG was eligible to be paid FTB for Period 1 and/or Period 2. This application numbered 2020/4845 was linked and heard simultaneously by this Tribunal with application numbered 2020/4848, as they involved consideration of a common set of facts. The related decision in application numbered 2020/4845 was handed down on 10 August 2021 simultaneously with this Decision.
BACKGROUND
This Tribunal refers to and adopts as part of these Reasons for Decision, the facts outlined in the Reasons for Decisions issued by this Tribunal in application numbered 2020/4845 under the heading “Background”.
Debt arising from overpayment of FTB
On 19 September 2019, Centrelink notified RDBG that debts had been raised in his name resulting from overpayments of FTB (Original Debt Decisions).[1] Those debts comprised:
(c)$1,443.54, in respect of Period 1 (Period 1 Debt); and
(d)$1,087.55, in respect of Period 2 (Period 2 Debt).
[1] Refer T-Documents T19/123 & 125.
On 6 April 2020, an ARO decided to affirm the Original Debt Decisions (except for the debts relating to payment of rent assistance which was waived by the ARO).
On 21 April 2020, RDBG sought review of the ARO’s decision by the Social Services and Child Support Division of the Administrative Appeals Tribunal (AAT1).
On 27 July 2020, the AAT1 set aside the ARO’s decision and in substitution, decided:
(e)to waive, in full, under s 101 of the A New Tax System (Family Assistance) (Administration) Act 1999 (the Administration Act), the Period 1 Debt; and
(f)vary the Period 2 Debt by requiring that it be recalculated based on the new care percentage determination that RDBG had 50% care of the Child and XVST had 50% care of the Child during this period.
This Tribunal will refer to those decisions collectively as the Decision Under Review.
On 10 August 2020, RDBG sought review of the AAT1 decision by the General Division of the Administrative Appeals Tribunal (this Tribunal).
In the Secretary’s Statement of Facts, Issues and Contentions dated 15 March 2021 (Secretary’s SFIC), the Tribunal was informed that RDBG was receiving the following social security entitlements:
(a)$506.10 per fortnight of FTB; and
(b)$944.30 per fortnight of disability support pension.
ISSUES
For the reasons set out in the Reasons for Decision issued by this Tribunal in the related application numbered 2020/4845, the Tribunal is satisfied that the debts were properly raised against RDBG on account of him being overpaid FTB payments during Period 1 and Period 2.
The remaining issues for consideration by this Tribunal are whether it should waive recover of, or write off, any part or all of the debts in respect of Period 1 and/or Period 2.
LEGISLATIVE FRAMEWORK
Section 71 of the Administration Act stipulates that a debt to the Commonwealth will arise where a person is paid social security benefits to which they are not entitled, or they are paid more than the amount to which they are entitled to be paid.
A debt may be written off by the Secretary under s 95 of the Administration Act in the following circumstances:
95 Secretary may write off debt
…
Secretary may write off debt if debt irrecoverable or debt will not be repaid etc.
(2) The Secretary may decide to write off a debt under subsection (1) if:
(a) the debt is irrecoverable at law; or
(b) the debtor has no capacity to repay the debt; or
(c) the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d) it is not cost effective for the Commonwealth to take action to recover the debt.
If a proportion of a debt has arisen solely attributable to an administrative error made by the Commonwealth, s 97 of the Administration Act sets out the circumstances in which the Secretary must waive the right to recover that proportion of the debt.
Section 101 of the Administration Act also confers a discretion on the Secretary to waive the right of the Commonwealth to recover all or part of a debt if “special circumstances” exist.
The Family Assistance Guide (the Guide) issued by the Department provides policy guidance in relation to how to interpret and apply the provisions referred to in the above paragraph. The Tribunal has taken this policy guidance into account.
RDBG’S CONTENTIONS
RDBG lodged a statement of facts, issues and contentions dated 2 April 2021 (RDBG’s SFIC) in respect of this application and related application numbered 2020/4845 stating as follows:[2]
[2] Refer RDBG’s SFIC at [4],[5], [9], [10].
1Centrelink sent a letter to the applicant on 19 September 2019 stating FTB was cancelled without outlining reasons behind it.
2Subsequently, applicant appealed Centrelink's decision around 20^th or 23th(sic) or 24^th September 2019.
3Respondent's submission to the AAT general division on 15 March 2021 paragraph 10 stated that on 18 September 2019, respondent decided that the child was not in applicant's care from 28 April 2019 to 8 June 2019 and from 16 August 2019 to September 2019. Applicant is not clear how Centrelink came to conclusion about that part, because neither the applicant nor the mother of the child, [XVST] (the other party) notified Centrelink that the child was not under the applicant's care (no calls made between the specified period).
4Paragraph 5 of the respondent's submission stated, "On 28 April 2019, [RDBG] and [XVST] separated (T11). On 15 June 2019, they were divorced." To that quote it is important to mention both the applicant and the other party did not call Centrelink on 28 April of their separation and also did not call on 15 June 2019 about their divorce. Based upon this the AAT1 came to conclusion on 27 July 2019 that debt incurred from 28 April 2019 to 8 June 2019 should be waived completely and debt be varied that incurred from 16 August 2019 to 16 September 2019 related to 50% care percentage.
5Upon returning from Bangladesh on 2 July 2019, the following day on 3 July 2019, the applicant made a phone call to Centrelink notifying separation and divorce and after listening service adviser on the phone asked the applicant submit the relevant documents via My Gov which did not accept the applicant's uploaded documents for which applicant called again to Centrelink few times about it and to that the customer assistant then advised applicant bringing the separation documents to the nearest Centrelink office which the applicant did on 1 August 2019 therefore the applicant was not eligible for single payments from 28 April 2019 till 1 August 2019 and were receiving partnered payments till 1 August 2019 though the applicant requested single payment and the respondent's view in that regards that the applicant did not notify Centrelink prior to 1 August 2019 therefore applicant was not eligible for single payments and should be considered partnered for that period.
6On 16 August 2019, the other party returned to Australia with the child who was staying with the applicant upon his arrival. The applicant rang Services Australia the following day about the child and started receiving FTB benefit up until its cancellation dated 19 September 2019.
7Now the secretary is of the view that neither parties (the applicant and the other party) should have received FTB benefits from 28 April 2019 to 8 June 2019 and from 16 August 2019 to 16 September 2019 that makes this case even more complex (refer to the respondent's submission on 15 march 2021 to this tribunal).
8Prior to coming to this tribunal, the other party ([XVST]) in the compulsory conference stated [omitted because discussions in conferences are confidential].
9Now the question to this tribunal that if the secretary is of the view (which the applicant does not agree to it) that the child was not under the applicant's care in the specified period above and was under the care of the other party why then the Centrelink even refuse to pay FTB to the other party. Is it the law that prevent paying FTB to either parties or the arbitrary decision of the secretary or is it the malicious intent on the part of secretary?
10In percentage of care issue, since the child was born on 5 January 2018 and up until 28 April 2019 Centrelink was of the view that the applicant had 100% care despite the mother was involved caring for that child as well. How legislation was then applied to the applicant as a l00% carer of the child whilst the mother was also caring for that child during that period? So, the question is what changed the Centrelink's view of care percentage between the period of 28 April 2019 to 8 June 2019 and from 16 August 2019 to 16 September 2019 as neither party told Centrelink about their separation on 28 April2019 and their divorce on 15 June 2019 and if Centrelink believes that 28 April 2019 the applicant and the other party were separated why is it then they refused to pay single payments to the applicant till 1 August 2019 and considered the applicant as a couple and paying him couple rates? Is it cherry-picking legislation on part of the secretary to harm the applicant in any way shape or form?
11On the first week of October 2019, the other party advised Centrelink that the child was in the care of the applicant despite that advise Centrelink was not paying FTB benefits to the applicant and it was on February 2020 after numerous phone calls from the applicant it had decided to pay the applicant the back pay since October 2019. So, the question is, was the legislation prevented them or the malicious intent of the respondent not to pay the applicant despite the other party notified them? The applicant submits to this tribunal that it would explain the question arose above the behaviour of the respondent, was it malicious or legislation?
12The applicant contends that the FTB debt that arose from 28 April 2019 to 8 June 2019 and from 16 August 2019 to 16 September 2019 should completely be waived. And also, in relation to the percentage of care, the applicant submits to this tribunal that it will make a reasonable decision based upon weighing the evidences.
21.Applicant SFIC - 2 April 2021
CONSIDERATION
Were the debts properly raised against RDBG?
The effect of the Tribunal’s Decision and Reasons for Decision in application numbered 2020/4845 is that:
(a)during Period 1, RDBG was not eligible to receive FTB for any part of Period 1; and
(b)during Period 2, RDBG was eligible to receive FTB at the single rate based RDBG having 50% care of the Child.
Accordingly, any additional payments made to RDBG above and beyond his entitlement to FTB as set out in the paragraph constitutes an overpayment and must be repaid to the Commonwealth pursuant to s 71 of the Administration Act. On this basis, this Tribunal concludes that the Period 1 Debt and the Period 2 Debt were properly raised against RDBG.
The primary task of the Tribunal in this application is to decide whether to waive recovery of, or write off, any part or all of the Period 1 Debt or Period 2 Debt.
Discretion to write off either or both debts under s 95
The Tribunal will start by considering whether any of the circumstances prescribed in s 95 of the Administration Act apply in RDBG’s case. Firstly, RDBG has already repaid the Period 1 Debt and the Period 2 Debt. Even if he had not already repaid the debt, RDBG is in receipt of two, not insignificant, separate fortnightly social security benefits on an ongoing basis, namely, the FTB and the disability support pension. For those reasons, the Tribunal is unable to conclude that any of the circumstances set out in subsections 95(2)(a) to (d) of the Administration Act inclusive (reproduced in paragraph [16] above) apply to RDBG.
Accordingly, the Tribunal finds that the discretion under s 95 of the Administration Act is not enlivened in RDBG’s case, in respect of the Period 1 Debt or the Period 2 Debt. This means the Tribunal does not have a discretion in the circumstances of this case to write off the Period 1 Debt or the Period 2 Debt under s 95.
Waiver of all or part of either or both debts under s 97
Next, the Tribunal will consider whether s 97 of the Administration Act applies in RDBG’s case.
The Tribunal considered all the documents before it and was unable to identify any evidence to support a conclusion that either the Period 1 Debt or Period 2 Debt was solely “attributable to an administrative error made by the Commonwealth”.
The Period 1 Debt arose because Centrelink was unaware, during Period 1, that:
(a)RDBG had separated from XVST on 28 April 2018; and
(b)XVST and the Child had left the country on 28 April 2019 and had remained overseas until 16 August 2019.
By RDBG’s own evidence (see paragraph [20] above),[3] RDBG states that he notified Centrelink about his separation from XVST, and divorce, on 3 July 2019, being the day after he returned from Bangladesh. This prompted Centrelink staff to advise RDBG to complete a proforma “Mod S” form entitled “Separation Details” (Mod S Form). The description at the top of this form states: “This form lets us know that you have separated from your partner”.[4]
[3] Refer paragraph [5] of RDBG’s SFIC as reproduced in paragraph [20].
[4] Refer T-Documents T11/61.
The Tribunal notes that RDBG signed and dated the Mod S Form on 7 May 2019. The Tribunal concludes that RDBG erroneously backdated this form (at the base of the document where he was required to sign and date it), because by his own evidence he was only advised to complete a Mod S Form by Centrelink on 3 July 2019 (two months later), as evident from his conversations with Centrelink on 3 July 2019 according to his own evidence as outlined in RDBG’s SFIC. Perhaps RDBG mistakenly thought he needed to date the Mod S Form so that it aligned more closely with time of his separation from XVST.
By RDBG’s own evidence, as detailed in paragraph [20] above, RDBG stated that he had tried, unsuccessfully, to upload the form onto the MyGov website. Centrelink records show that he lodged the Mod S Form in person at the Footscray Centrelink office, but not until 1 August 2019. This is evident from the “date-stamp” appearing on the front of the Mod S Form submitted by RDBG.[5]
[5] Refer T-Documents T11/61.
Considering those circumstances, the Tribunal finds that the overpayment of FTB to RDBG during Period 1 did not occur because of an administrative error solely on the part of the Commonwealth. The overpayment occurred because RDBG failed to notify Centrelink on 28 April 2019, or at any time during Period 1, that he had separated from XSVT and that she and the Child had left the country on 28 April 2019.
The Tribunal is satisfied that RDBG was always under a legal obligation to update Centrelink about such change in circumstances, while he was in receipt of social security benefits and specifically, FTB under the Act. Further, the Secretary contends, in the Secretary’s SFIC, as follows:
The notices dated 20 September 2018 and 8 March 2019 at T26 (pp 217 - 222) alerted [RDBG] of his obligation to inform Centrelink of changes such as separation from a partner or ‘if a child for whom you are receiving FTB stops living with you…is planning to leave Australia (tell us as soon as you know), returns to Australia, becomes or stops being an Australian resident…’ [6]
[6] Refer Secretary’s SFIC at [36].
The Tribunal finds that the overpayment of FTB to RDBG during Period 1 did not arise solely due to an administrative error on the part of the Commonwealth and instead, that RDBG caused those overpayments to be made due to his failure to notify Centrelink of his change of circumstances in a timely manner.
Regarding Period 2, the overpayments of FTB to RDBG arose due to new care percentage determinations having been made and applied to the calculation of the rate of FTB that RDBG was eligible to receive. By the start of Period 2 being 16 August 2019, RDBG and XVST had divorced. Between 16 August 2019 and 12 September 2019, RDBG and XVST were living together with the Child, but not as members of a couple. From 12 September 2019 until the end of Period 2, being 16 September 2019, XVST had moved out of RDBG’s residence. RDBG remained living at the residence during this time with the Child. However, XVST would visit RDBG’s house during the day to continue to meet the immediate personal care needs of the Child. The Tribunal finds that the overpayment of FTB to RDBG during Period 2 was caused by the reassessment of the percentages for care for FTB purposes in respect of this period, and not due to any error caused by the Commonwealth or indeed, by RDBG.
Considering the matters set out in paragraph [28] to [36], the Tribunal concludes that s 97 of the Administration Act does not apply in RDBG’s circumstances in relation to the Period 1 Debt or the Period 2 Debt. Accordingly, the Tribunal does not waive the right of the Commonwealth to recover those debts, or any proportion of them, under s 97.
Discretion to waive all or part of either or both debts under s 101 – “special circumstances”
As highlighted by the Secretary, RDBG relied on a range of medical reports and financial information in support of his contention that “special circumstances” exist in his case and that the Tribunal should waive the Period 1 Debt and/or the Period 2 Debt under s 101 of the Administration Act.[7] RDBG presented medical evidence recording that he suffers from psychosis, paranoia, anxiety, depression, headaches, diabetes and that he is unable to work. The information referred to RDBG having received psychiatric treatment and psychological counselling sessions for these conditions.
[7] Refer Secretary’s SFIC at [59].

The Secretary drew the Tribunal’s attention to the following cases which might be considered comparable:[8]
Mental health conditions
60. In Woodward and Department of Family and Community Services [2001] AATA 818 the Tribunal found that the applicant who was suffering from emotional and psychological trauma at the time of overpayments of social security benefits had been impaired to the extent she was unable to manage her affairs. The Tribunal accepted that during the period the applicant was distraught and disorganised, she was severely depressed and distressed in her factual circumstances.
61. In Secretary, Department of Family and Community Services and Temesgea [2002] AATA 1290 the Tribunal found "special circumstances" to apply because of the "respondent’s prevailing state of mental and emotional distress at the time the debt was incurred" [reducing the respondent’s ability to understand his obligations and responsibilities under the Act].
62. In Hill and Secretary, Department of Family and Community Services [1999] AATA 909, at the relevant time, the applicant was being treated for "severe depression". The Tribunal accepted the medical opinion evidence that the applicant was "capable of rational decision making although his cognitive functioning is impaired by his medication and his depression and that "[the applicant] has trouble thinking rationally" and "exhibits confusion and difficulty with decision-making". In its conclusion that "special circumstances" applied, the Tribunal accepted that the applicant was "not capable of great feats of rational thought and has impaired cognitive functions"; and
63. In Secretary, Department of Social Security and Winters [1997] AATA 594, the Tribunal concluded that there were "special circumstances" operating in the life of the applicant at the time overpayments of social security were made. The Tribunal concluded that the impacts of her psychiatric state (depression, schizophrenia) on her actions to act impulsively, panic and depression, were "special".
[8] Refer Secretary’s SFIC at [60]-[63].
In spite of those cases, the Secretary contends that RDBG’s medical conditions, when considered alone, are not enough for a finding that “special circumstances” exist in his case.[9] In support of this contention, the Secretary referred to the Tribunal to paragraph [62] the decision in Re Dean and Department of Education Science and Training [2005] AATA 586 and stated that RDBG’s “state of health is not unusual, uncommon or exceptional”.[10]
[9] Refer Secretary’s SFIC at [65].
[10] Refer Secretary’s SFIC at [65].
The medical reports provided by RDBG’s treating doctor referred to his mental health conditions having been caused by the stress of immigration and detention in 2004 and 2005 and a marital break-up of 2006. The Secretary invited the Tribunal to consider that those events took place over 12 years ago. The Secretary acknowledged that his recent marital break down in 2019 would have also caused RDBG distress.[11]
[11] Refer Secretary’s SFIC at [66].
Section 101(b) of the Administration Act specifies that financial hardship alone, cannot amount to “special circumstances”.
Firstly, the Secretary highlighted to the Tribunal that RDBG had already repaid the debt. On that basis, the Secretary contends there can be no further financial hardship posed by an ongoing requirement to repay the debt, as this has already taken place.
Secondly, the Secretary referred to the decision in Re Lumsden and Secretary Department of Social Security (1986) 10 ALN N225 where it was considered that person’s entire financial position would need to be materially less than the current rate of pension to be considered “special circumstances”. As mentioned above, RDBG is currently in receipt of two different types of social security entitlements amounting to fortnightly payments of more than $1,000.
This Tribunal acknowledges that RDBG’s financial circumstances were, and still are, constrained as he was not, and still is not, employed due to his medical conditions. However, this Tribunal finds that RDBG’s financial circumstances, considered alone, are not unusual, uncommon, or exceptional or that they amount to “special circumstances”. [12]
[12] Refer Secretary’s SFIC at [67].
Period 1
Regarding Period 1, the Tribunal acknowledges that the Child was unwell and required hospitalisation in June or July 2019. The Tribunal accepts that this was likely to have caused significant distress to RDBG, especially in the context of his medical conditions, and provides a possible explanation for why RDBG belatedly notified Centrelink that he had separated from XVST. The departure of XVST and the Child on 28 April 2019 to an overseas location, without RDBG, was also likely to have caused significant distress to RDBG during Period 1.
Accordingly, the Tribunal considers that the following factors:
(a)the underlying serious mental health issues suffered by the RDBG;
(b)the marital breakdown and separation from XVST he experienced on 28 April 2019;
(c)departure of the XVST and the Child without him and the likely impact this would have had on RDBG’s mental state; and
(d)the hospitalisation of the Child in June or July 2019 while the Child was overseas;
considered together, amounted to “special circumstances” in respect of Period 1, because there were special circumstances to explain why RDBG belatedly gave notice to Centrelink of his separation and divorce and the fact that XVST and the Child had left the country. This enlivens the Tribunal’s discretion in relation to Period 1 and based on the factors referred to above in this paragraph, this Tribunal considers that it is appropriate to waive the right of the Commonwealth to recover the Period 1 Debt in its entirety.
Period 2
The Period 2 Debt arose after RDBG had given notice to Centrelink that he had separated (and divorced) XVST. The effect of the affirmation of the Decision Under Review in application numbered 2020/4845 is that the Period 2 Debt decision will be remitted for reconsideration and recalculated on the basis that RDBG has 50% care of the Child during Period 2. Even though the quantum of the debt will change through this remittal process, the Tribunal is required to consider whether there are “special circumstances” in respect of Period 2 Debt which enlivens the Tribunal’s discretion under s 101 to waive all or part of the recovery of this debt, once recalculated.
The Tribunal does not consider there to be sufficient evidence before it to establish “special circumstances” in relation to the Period 2 Debt. The debt applies because of a change in the assessment of percentages of care as between RDBG and XVST of the Child by the AAT1 (and as affirmed by this Tribunal as set out in the Reasons for Decision in application numbered 2020/4845). Those overpayments should be recovered from RDBG and the Tribunal does not consider that its discretion to waive any part or all of that debt has been enlivened under s 101 of the Administration Act.
CONCLUSION
The Tribunal affirms the Decision Under Review.

I certify that the preceding fifty (50) paragraphs are a true copy of the reasons for the decision herein of Member K. Parker

......[sgd]........
Associate
Dated: 10 August 2021

Date of hearing:

16 April 2021

Advocate for the Applicant:

Advocate for the Respondent:

Self-represented

Mr Christopher Henies

Solicitors for the Respondent: Australian Government Solicitor