Re Ward and Secretary, Department of Family and Community Services
[2000] AATA 212
•18 February 2000
CATCHWORDS – SOCIAL SECURITY – overpayment of family allowance – debt raised – all notices complied with – applicant provided estimate – combined income greater than 110% of estimate – whether debt solely due to an administrative error – whether debt should be waived due to special circumstances – decision affirmed.
Social Security Act 1991 – ss 22, 87, 860, 872, 873, 875, 876, 879, 880, 881, 881A, 885, 886, 891, 1069, 1237A, 1237AAD,
Student and Youth Assistance Act 1973 – ss 289
Beadle v Director-General of Social Security (1985) 60 ALR 225; (1985)
Bruneau and Secretary, Department of Family and Community Services [1999] AATA 48
Re Christensen and Secretary, Department of Social Security – (unreported, AAT 10277, 4 June, 1995
Gerhardt and Department Employment, Education and Training (unreported, AAT 10941, 17 May 1996)
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Lohner and Secretary, Department of Social Security (1995) 85 SSR 1241
Secretary, DEETYA v Prince (1997) 26 AAR 385; (1997) 152 ALR 127; (1997) 50 ALD 186
DECISION AND REASONS FOR DECISION [2000] AATA 212
ADMINISTRATIVE APPEALS TRIBUNAL )
) Q1999/1349
GENERAL ADMINISTRATIVE DIVISION )
Re DIANNE WARD
Applicant
AndSECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
DECISION
Tribunal Miss S A Forgie (Deputy President)
Date 18 February, 2000
Place Brisbane
Decision The Tribunal affirms the decision of the Social Security
Appeals Tribunal dated 18 October, 1999.
S A FORGIE
Deputy President
REASONS FOR DECISION
On 15 December, 1999, the applicant, Mrs Dianne Margaret Ward, applied for review of a decision of the Social Security Appeals Tribunal ("SSAT") dated 18 October, 1999. In its decision, the SSAT had affirmed a decision of a delegate of the respondent, the Secretary of the Department of Family and Community Services ("Secretary") to raise and recover an overpayment of family allowance (previously known as family payment) in respect of the period 3 July, 1997 to 19 November, 1998. The Secretary raised a debt in the amount of $5,480.15.
At the hearing, Mrs Ward represented herself and also presented written submissions made on her behalf by a solicitor, Mr Mitchell. The Secretary was represented by Mr Kanowski who is an advocate with Centrelink. The documents lodged pursuant to s. 37 of the Administrative Appeals Tribunal Act 1975 ("T documents") were admitted in evidence. An oral decision was given at the hearing affirming the decision under review. Mr Mitchell has requested written reasons.
THE ISSUE
The issue in this case was whether the debt owed by Mrs Ward must be waived pursuant to ss. 1237A or 1237AAD of the Social Security Act 1991 ("the Act"). Section 1237A raises two ancillary issues: whether the debt was solely due to an administrative error made by the Commonwealth and whether Mrs Ward received the payments in good faith. Section 1237AAD requires a consideration of whether special circumstances make it desirable to waive the debt.
BACKGROUND
There was no dispute between the parties as to much of the chronology of events in this case. In view of that and on the basis of the material in the T documents, I will set out the facts as I have found them.
Mrs Ward has two children: Nathan and Aaron. On 6 June, 1997, an officer of the then Department of Social Security ("Department") wrote to Mrs Ward advising her that she would be paid $198.70 as a family payment for both Nathan and Aaron and that she would be paid each fortnight from 19 June, 1997 (T documents, pages 45-47). Her family payment had been calculated on the basis of the combined rate of income of her and her partner, Mr Scott McLeod, of $17,606.00. He went on to advise her when she should contact the Department. In particular, he advised her that, under ss. 872, 873 and 873(a) of the Act, she must contact it within 14 days if she or her husband started or recommenced work.
Mrs Ward's partner had commenced work in February, 1997. On 27 June, 1997, Mrs Ward completed an Income and Assets Return showing that the change had occurred, as it had, since 30 June, 1996 (T documents, page 52). Both she and Mr McLeod signed it. The return went on to ask Mrs Ward to give more details about her estimated taxable income, and that of her partner, for the financial year in which he had commenced work. As any change affecting Mrs Ward or Mr McLeod could have occurred in either the financial year 1996/97 or 1997/98, the return had two columns. One was headed 1996/97 and the other 1997/98. Instead of entering details of her estimate of their taxable income in the column headed 1996/97, Mrs Ward entered them incorrectly in that headed 1997/98. She estimated that Mr McLeod would receive $27,040.00 in 1997/98 and that she would receive income of $250.00 from investments and Mr McLeod would receive $300.00. She estimated that their total income for 1997/98 would be $27,590.00.
On 31 July, 1997, an officer of the Department wrote to Mrs Ward advising her that she would be paid $238.80 each fortnight for Nathan and Aaron commencing on 14 August, 1997. He advised her that her family payment was calculated on the basis that their combined income was $27,590.00 and that the amount of her family payment had been worked out using that combined income. Again she was advised that, under ss. 872, 873 and 873(a), she should contact the Department if she commenced work (T documents, pages 61-63).
An officer of the Department wrote again to Mrs Ward on 1 August, 1997. He advised her that she would be paid $208.10 each fortnight for Nathan and Aaron and that her rate was based on the last amount of maintenance she had received through the Child Support Agency. If that amount were to change, the letter continued, her rate of family payment would change. The income which had been used to work out her family payment was again shown as $27,590.00. She was advised to notify the Department of certain changes in her circumstances as before. (T documents, pages 61-63).
A similar letter setting out the same information and advising her that her rate of payment was now $238.80 for Nathan and Aaron was sent to her on 3 September, 1997 (T documents, pages 64-66).
On 17 October, 1997, Mrs Ward completed an answer sheet as part of a review of her family payment. She was asked to advise the taxable income shown on her tax notice of assessment or on her tax return and that of Mr McLeod for the financial year 1996/97. She showed the figures of $4,083.00 for her and $18,918.00 for her (T documents, page 67).
On 28 November, 1997, Mrs Ward telephoned Centrelink, which now performed the functions of the Department with regard to the administration of family payments. She advised that she had commenced work at Franklins on 17 November, 1997. In the first two weeks, she had worked 20 hours in both weeks and expected to work 12 hours in the next. The hourly rate was $14.47. While the work was permanent, the hours she would work would be variable. (T documents, page 81)
On 14 December, 1997, an officer of Centrelink wrote to Mrs Ward and advised her that she would be paid $256.05 each fortnight for Nathan and Aaron from 1 January, 1998. The letter sent out similar information to that contained in the previous letters. (T documents, pages 82-84)
On 17 December, 1997, Mrs Ward returned a questionnaire sent to her by Centrelink. She set out details of her bank accounts and those of Mr McLeod as well as details of her employer and income. That information was required, the covering letter told her, to help Centrelink make the right decision about her Parenting Allowance. (T documents, pages 85-87)
An officer of Centrelink wrote to Mrs Ward on 14 April, 1998 and advised her that her family allowance (previously called family payment) would be $197.65 each fortnight for Nathan and Aaron from 14 April, 1998. That amount had been calculated on the basis that she and her partner received a combined annual income of $27,590.00. Mrs Ward was advised that her Family Allowance had "gone up" because Aaron had turned 13. In terms similar to those he had used in previous letters, the officer also advised her when she should contact Centrelink about any change in her circumstances. (T documents, pages 88-90)
On 6 October, 1998, an officer of Centrelink wrote to Mrs Ward and advised her that she would no longer be paid Family Allowance for Nathan as he had left home. She was advised that the rate would be $140.55 each fortnight and that her combined income of $27,590.00 had been used to work the rate out. The letter included information about when she should contact Centrelink. (T documents, pages 91-93)
Mrs Ward completed an answer sheet in connection with a review of her Family Allowance. She did so on 20 October, 1998 and indicated that both she and Mr McLeod were wage or salary earners. In her own case, she worked for 16 hours each week. At question 4, she was asked to show their taxable income for 1997/98 as it was shown on their notice of assessments or tax returns. Mrs Ward showed $4,698.00 for herself and $30,453.00 for Mr McLeod (T documents, page 94).
Centrelink wrote to her on 16 November, 1998 when it had received this information. As her yearly income was now $35,151.00 and greater than it had been in the previous year, it told her, she would be paid less Family Allowance. That decision had been made under s. 879 of the Act. (T documents, pages 109-111)
On 15 March, 1999, a delegate of the Secretary recalculated Mrs Ward's entitlement to family payment or Family Allowance and determined that she had been overpaid the sum of $5,480.15 for the period 3 July, 1997 to 19 November, 1998. (T documents, pages 118-124)
LEGISLATIVE FRAMEWORK
I will set out the provisions as they relate to family allowance although there are no changes of substance from those applying to a family payment. A person's qualification for a family allowance is set out in subdivision A of Division 2 of Part 2.17 of the Act. Subject to those criteria regarding income, there has been no question in this case that Mrs Ward has been qualified for a family allowance. The rate of family allowance is determined by using the family allowance Rate Calculator at the end of s. 1069. Once the rate has been determined, it is the rate struck for the year unless certain events occur (s. 860). Those events include the recipient's revising an estimate of his or her taxable income or a person's underestimating his or her taxable income (s. 860(d) and 9(e)).
A determination that family allowance is payable to a person continues in effect until it ceases to be payable under either ss. 875 or 876 (relating to complying, or failing to comply, with notification requirements under s. 872) or a further determination in relation to the payment has been made under ss. 880, 881 or 881A (relating to cancellation or suspension) and taken effect.
Module A, which is found at the end of s. 1069, sets out the method of calculating the rate of family allowance payable to a person. An essential step in that calculation is to work out the person's appropriate tax year. Subject to certain qualifications which I will come to shortly, the appropriate tax year for a family payment payday is the base tax year for that payday (point 1069-H13). The base tax year for a family payment payday is:
"... the tax year that ended on 30 June in the calendar year that came immediately before the calendar year in which the payday occurs.
Example:A family payment payday occurs on 25 January 1995 - this day occurs in the calendar year 1 January 1995 to 31 December 1995 - the calendar year that came immediately before this one is the calendar year 1 January 1994 to 31 December 1994- the base tax year is the tax year that ended on 30 June 1994 (i.e. the year of income that commenced on 1 July 1993)." (point 1069-H14)
A change to what is a person's appropriate tax year may occur in various circumstances. One such circumstance occurs if:
"(a) a notifiable event occurs in relation to a person; and
(b)the person's income for the tax year in which the notifiable event occurs exceeds:
(i)110% of the person's income for the base tax year; and
(ii)110% of the person's income free area;
the appropriate tax year, for the purposes of applying this Module to the person for the remainder of the family allowance period, is the tax year in which the notifiable event occurs." (point 1069-H18)
The "family allowance period", in relation to a person who is receiving family allowance means:
"a)in relation to the year in which the person first receives family allowance – the period that starts on the day on which the person starts to receive family allowance and ends on the next 31 December, or
(b)in relation to any other year – the period that starts on 1 January in that year and ends on 31 December in that year." (s. 6(1)).
A "notifiable event" is defined in point 1069-H6 in the following terms:
"An event is a notifiable event for the purposes of the application of this Module in respect of a person if a notice given to the person under subsection 872(1) states that the event is a notifiable event for the purposes of this Module."
A notifiable event may occur but not have effect under point 1069-H18 to make the year in which the event occurs ("the event tax year") the appropriate tax year. If such an event occurs and if
"(c) the person's income for the tax year that follows the event tax year is likely to exceed:
(i)110% of the person's income for the base tax year; and
(ii)110% of the person's income free area;
the appropriate tax year, for the purposes of applying this Module to the person for:
(d)the part of the family allowance payment period in which the event occurs that comes after the end of the event tax year; and
(e)the next family allowance period after the one referred to in paragraph (d);
is the year that follows the event tax year." (point 1069-H19)
A recipient of family allowance may ask that the appropriate tax year be changed. That is provided for in point 1069-H21:
"If:
(a)family allowance:
(i)is not payable to a person because of this Module; or
(ii)is payable to a person at a reduced rate because of this Module; and
(b)the person gives the Secretary an estimate of the person's income for a tax year; and
(c)the person requests the Secretary to make a determination under this point; and
(d)the person agrees that the person's rate of family allowance for that tax year is to be recalculated if the person's actual income for that year exceeds 110% of the amount estimated by the person:
the Secretary must determine that the appropriate tax year, for the purposes of applying this Module to the person for a family allowance payday on or after the day on which the request is made, is the tax year in which
the request is made."
Point 1069-H22 provides that a "... request under point 1069-H21 must be made in writing in accordance with a form approved by the Secretary."
Point 1069-H15 relates to the appropriate tax year where a person is entitled to be paid family allowance for consecutive years. It too is dependent upon that person's making a request under point 1069-H22.
A person's income is relevant in determining the amount of family allowance payable to him or her. Point 1069-H2 provides that a person's family payment income for a particular tax year is the sum of four income components: taxable income; adjusted fringe benefits value; target foreign income; and net rental property loss for that year. If a person is a member of a couple, the person's income for a tax year includes that of his or her partner (point 1069-H3). A person's taxable income for a tax year is his or her assessed taxable income for that year, or if he or she does not have such an assessment, his or her accepted estimate of taxable income for that year (point 1069-H8). A person's accepted estimate of taxable income for a tax year is the amount estimated by the person in a notice given to the Secretary. The Secretary must only accept the notice if satisfied it is reasonable (points 1069-H10-12).
Two other provisions, ss. 885 and 886, are relevant in this case. They provide for the recalculation of family payment if, in one instance, taxable income is underestimated by 10% or more or, in the other, a person fails to notify the Department of a notifiable event and the person's taxable income exceeds 110% of his or her taxable income for his or her base tax year and his or her income free area at the time.
Section 885(1) provides:
"If:
(a)in working out the rate of family allowance payable to a person, regard is had to the person's income for a tax year; and
(b)the income to which regard was had consisted of an amount estimated by the person, and
(c)the person's income for that tax year is more than 110% of the amount of the income on which the determination of the rate of family allowance was based:
the person's rate of family payment is to be recalculated on the basis of that income."
For the purposes of s. 885, a person's income for a particular tax year is the sum of his or her taxable income and certain other specified income (s. 885(2)).
Section 891 is relevant in considering the date of effect of a determination made where a person has underestimated his or her income. It provides:
"If:
(a)the Secretary makes a determination of a person's rate of family allowance; and
(b)in making the determination, the Secretary had regard to the person's income for a tax year; and
(c)the income to which regard was had included an amount or amounts estimated by the person; and
(d)the person's income for the tax year is more than 110% of the amount of the income on which the determination referred to in paragraph (a) was based; and
(e)the Secretary makes a determination varying the person's rate of family payment, or cancelling the person's family payment, to give effect to the recalculation required by section 885;
the later determination takes effect on the day on which the earlier determination took effect."
Under s. 872(1), the Secretary may require a recipient of family payment to inform the Department if:
"(a) a specified event or change of circumstances occurs; or
(b)the recipient becomes aware that a specified event or change of circumstances is likely to occur."
An event or change of circumstances is not to be specified in a notice given under s. 872(1) unless the occurrence of the event or the change in circumstances might affect the payment of the family allowance (s. 872(2)). Section 872(3) sets out the formal requirements which must be met by the notice. Those requirements are that, subject to s. 872(3A), the notice:
"(a) must be in writing; and
(b)may be given personally or by post; and
(c)must specify how the recipient is to give the information to the Department; and
(d)must specify the period within which the recipient is to give the information to the Department; and
(e)must specify that the notice is a recipient notification notice given under this Act."
Section 872(3A) provides that a notice is not invalid merely because it fails to comply with ss. 872(3)(c) or (e). In most instances and for the purposes of this case, the period specified under s. 872(3)(d) must end at least 14 days after the day on which the event or change of circumstances occurs or the day on which the recipient becomes aware that the event or the change of circumstances is likely to occur (s. 872(4)).
CONSIDERATION
In this case, I am satisfied that each of the letters sent to Mrs Ward by the delegate of the Secretary was a notice within the meaning of s. 872. Each letter specified circumstances or events of which Mrs Ward had to advise the Department or Centrelink. Each was in writing sent by post to her and each advised her how she was to advise of those events or circumstances and the time within which she must do so. Finally, each specified that it was a notice under s. 872.
In the family allowance period commencing on 1January, 1997, Mrs Ward's appropriate tax year was her base tax year (point 1069-H13). Her base tax year was the financial year 1995/96 as it was the tax year that ended on 30 June in the calendar year that came immediately before 1997 (point 1069-H14). In the financial year 1995/96, Mrs Ward had received an income of $17,606.00 (T documents, page 57).
In the notice sent to her on 31 July, 1997 under s. 872, Mrs Ward was told to tell the Department or Centrelink if she or her partner started work, recommenced work, changed jobs or became self employed in the 1996/97 or 1997/98 financial years. This was a notifiable event as it had been specified as such in a notice sent pursuant to s. 872 (point 1069-H6). Mrs Ward complied fully with the notice and advised the Department that Mr McLean had commenced work in February, 1997.
Her compliance with the notice meant that the Department had to look to point 1069-H18. She came within paragraph (a) of that point as a notifiable event had occurred. The next issue was whether her income for the tax year in which the notifiable event occurred exceeded 110% of her income for the base tax year. Her income for the base tax year had been $17,606.00. A figure of 110% of that equalled $19,366.67. As her income for 1996/97, which was the tax year in which the notifiable event had occurred, was $23,001, it exceeded the 110% of the income for her base tax. In order for point 1069-H18 to apply, however, the income for 1996/97 need also to have exceeded 110% of $23,974.00 which was her income free area. As the sum of $23,001.00 did not, it followed that there was no change to Mrs Ward's appropriate tax year because of the notifiable event and it remained as 1995/96.
That, though, was not an end of the matter. Regard still had to be had to point 1069-H19 which came into operation where, as here, a notifiable event had occurred and where point 1069-H18 had not made the year in which the event occurred the appropriate tax year. Point 1069-H18 had not made 1996/97, the event tax year, her appropriate tax year. The tax year that followed the event tax year was 1997/98. Mrs Ward's estimate of her income had been $27,590.00 for 1997/98 (T documents, page 53). Even though I accept that she incorrectly wrote this figure in the 1997/98 box rather than the 1996/97 box, it was reasonable for the delegate to take that figure into account as the likely income. Even if he or she had noticed that it had been placed in the incorrect box when Mr McLean had started work in February, 1997, it would not be unreasonable to assume that a figure intended for 1996/97 would be the same in 1997/98. An income of $27,590.00 would have exceeded 110% of the income of $17,606.00, which she received in the base tax year. It also exceeded 110% of $23,974.00 (i.e. $26,371.40), which was her income free area. In these circumstances, the effect of point 1069-H19 was that the appropriate tax year for the period beginning on 1 July, 1997 and for that family payment period beginning 1 January, 1998 was the tax year 1997/98.
The Department, and later Centrelink, calculated Mrs Ward's entitlement to family allowance on the basis of her estimate of income for the 1997/98 tax year i.e. $27,590.00 for the periods following 1 July, 1997 and for the family payment period beginning on 1 January, 1998.
On 17 November, 1997, another notifiable event occurred. That was the day on which Mrs Ward started work at Franklins. Again, she did as she was required to do pursuant to the notices which had been sent to her pursuant to s. 872 of the Act. The occurrence of the notifiable event required a re-examination of point 1069-H18. Although Mrs Ward's appropriate tax year had been altered on the occurrence of the previous notifiable event in February, 1997, her base tax year had not been affected by that occurrence. It remained, as defined in point 1069-H14, the financial year 1995/96. That meant that consideration had to be given to whether Mrs Ward's income for the tax year in which the notifiable event occurred (i.e. 1997/98) exceeded 110% of her income for her base tax year (1995/96) or of her income free area (i.e. $23,974.00).
At the time she began work at Franklins in November, 1997, Mrs Ward's taxable income for 1997/98 had not been assessed as the tax year had many months to run. She had estimated her taxable income and, pursuant to points 1069-H2, H8 and H10-12, her estimate was to be taken as her income for the tax year 1997/98. As that estimate had been $27,590.00, it exceeded 110% of the income of $17,606.00, which she received in the base tax year of 1995/96. It also exceeded 110% of $23,974.00, which was her income free area. The sum of $26,371.40 represents 110% of $23,974.00. In these circumstances, the effect of point 1069-H18 was that the appropriate tax year for the remainder of the family payment period following 17 November, 1997 was again the tax year 1997/98. Centrelink calculated Mrs Ward's entitlement to family allowance on the basis of her estimate of $27,590.00.
The combined taxable income of Mrs Ward and Mr McLean for the financial year 1997/98 was $35,151.00 i.e. $4,698.00 for Mrs Ward and $30,453.00 for Mr McLean (T documents, page 94). As Mrs Ward's family allowance had been calculated having regard to an estimated, and not an assessed, amount of taxable income for 1997/98, s. 885 must be considered. It must be considered in relation to the period from 3 July, 1997 until 19 November, 1997 for, as I have found, the 1997/98 tax year was the appropriate tax year for the two family allowance periods spanning that period. The amount estimated by Mrs Ward had been $27,590.00 but her assessed combined income was $35,151.00. This was greater than 110% of $27,590.00 (i.e. $30,349.00). Consequently, her rate of family payment had to be re-calculated using her actual income of $35,151.00 rather than $27,590.00 which she had estimated and which had previously been adopted.
Pursuant to s. 891, the re-calculation took effect from the date of the first family allowance based on the previous estimate of $27,590.00 i.e. 1 July, 1997. The re-calculation led to the determination that Mrs Ward had been overpaid an amount of $5,480.15.
Although Mrs Ward had been told in each of the letters she received between 31 July, 1997 and 6 October, 1998, that her family payment had been calculated on the basis of a combined income of $27,590.00, she had not been advised that she should submit a revised estimate of her income for that period. She was not given any such advice at any time between 3 July, 1997 and 19 November, 1998. It was not until after she had submitted her response to the review of her family payment that Centrelink varied the income upon which her family payment was calculated. Even then, the review form did not ask for an estimate of her 1997/98 taxable income as she had not experienced any changes that she had not told Centrelink about (T documents, pages 76-77, questions 7 and 8).
Mr Mitchell submitted that the debt should be waived pursuant to either s. 1237A(1) or s. 1237AAD of the Act. Taking first s. 1237A(1) of the Act, it provides that:
"…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."
In this case, I am satisfied that Mrs Ward received the payments in good faith as that expression was interpreted by the Federal Court in Secretary, DEETYA v Prince (1997) 26 AAR 385 at 387-388 (Finn J). She had complied with all of her obligations to notify the Department or Centrelink of her changing circumstances. Her payments fluctuated for the reasons set out in the correspondence to which I have referred. She would not have had any reason to think, and did not think, that she was being paid more than that to which she was entitled.
In an unreported decision of Gerhardt and Department Employment, Education and Training (Unreported, AAT 10941, 17 May 1996), I considered the meaning of "solely" as it formerly appeared in s. 289(1) of the Student and Youth Assistance Act 1973. That sub-section was in terms similar to s. 1237A(1) of the Act and a submission had been made that the word "solely" did not mean that the error had been made exclusively by the Commonwealth. After reviewing the authorities, I concluded that the word "solely" meant "exclusively", "only" or "to the exclusion of all else". There is no substantive difference between s. 289(1) of the Student and Youth Assistance Act 1973 and s. 1237A(1) of the Act. Consequently, I have taken the same view in relation to s. 1237A(1).
This means that the Secretary's duty to waive does not extend to those debts which are attributable to errors or other factors which are independent of the Commonwealth's administrative error. It makes no difference that those other errors or factors are minor. If those other errors or factors follow as a result of the Commonwealth's administrative error (i.e. they are incidental to the Commonwealth's error), then it may be that the debt is attributable solely to the Commonwealth's administrative error.
Mr Mitchell submitted that there are three occasions on which the Commonwealth erred. Each arose because, he submitted, Centrelink failed to respond to Mrs Ward's notification of her change in income. He submitted that, but for its failure to reassess her family allowance, the overpayment would not have occurred. Each of these errors was concerned with her commencing work at Franklins. In the first, Centrelink had not reassessed her family allowance after she had notified it of her employment on 28 November, 1997. The second occurred when it failed to reassess her family allowance after she had provided Centrelink with the information it had requested in relation to her parenting allowance. Mr Mitchell submitted that the parenting allowance and family allowance are closely aligned and that any additional notification would have been superfluous. The third error occurred when Centrelink failed to reassess Mrs Ward's family allowance after it had received notification by Franklins on 9 February, 1998. Furthermore, Centrelink did not send an income and assets form (SC 162) after Mrs Ward had advised it of her weekly income in relation to the parenting allowance or after Franklins had given an advice as to her earnings on 9 February, 1998.
Mr Mitchell supported his submission by reference to extracts from Centrelink's Guide to the Administration of the Social Security Act 1991("Guide"). He relied on extracts from the sections 6.2.4.40, 6.2.4.50, 6.2.4.60, 1.1.N.120 and 1.1.C.110 relating respectively to Family Allowance Reassessments General Provisions, Change in Income and Additional and Revised Estimates and to notifiable (and assumed notifiable) events and changes in circumstances in relation to, among other matters, family allowance.
As Mr Mitchell submitted, the extracts from the Guide do provide that Centrelink is required to reassess a person's family allowance upon being notified of a notifiable event. It did not do so when, as I have found, Mrs Ward complied with her obligations to notify them of such events.
I also agree with Mr Mitchell's submission that previous decisions of the Tribunal have concluded that failure by the Department or Centrelink to act on information is an administrative error. The cases to which he referred are Lohner and Secretary, Department of Social Security (1994) 85 SSR 1241, Re Christensen and Secretary, Department of Social Security (unreported AAT 10277, 4 June, 1995) and Bruneau and Secretary, Department of Family and Community Services [1999] AATA 48.
The issue in each of those cases and in this is not whether Centrelink has made an administrative error but whether the debt is attributable to that administrative error and, if it is, whether it is solely attributable. The question of whether there is an administrative error and whether the debt is solely attributable to that error are two different things. Had Centrelink reassessed Mrs Ward's family allowance when she properly notified it of the notifiable events, it would have concluded that her income for the 1997/98 tax year was the relevant income to use. This was, in fact, the income which it did take into account because it was permitted to rely upon an estimate of that income. That estimate had been given by Mrs Ward. While I accept that she had intended to show her income of $27,590.00 as her estimated income for 1996/97, the fact remains that she gave it for the 1997/98 tax year. For the reasons I have given earlier, it was reasonable for the Department or Centrelink to accept her estimate of her income for the 1997/98 tax year. It follows that the overpayment did not occur because the Department or Centrelink did not reassess Mrs Ward's family payment. So long as it used her estimate of income for the 1997/98 tax year and while the notifiable events occurred and her circumstances changed as they did, the overpayment was going to be made to her.
The only way in which the amount of the overpayment could have been reduced would have been if Mrs Ward had submitted a fresh estimate of her taxable income for 1997/98. She did not do so and she did not do so because she was not aware that she needed to do so. Centrelink's Guide does not contain any reference to its being required to seek a revised estimate in the circumstances in which Mrs Ward was placed. It would have been a preferable course of action if it had sought a revised estimate but, when it already had an estimate for that period, it cannot be said that it was making an administrative error when it did not.
It follows that the debt did not arise solely because of an administrative error by the Commonwealth but was contributed to by Mrs Ward's estimate of her income for the 1997/98 tax year. In view of that, the power to waive under s. 237A(1) cannot be exercised.
Mr Mitchell relied also on the power to waive found in s. 1237AAD. That provides:
"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 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."
The case to which regard is usually had in considering the meaning of the words "special circumstances" is that of Beadle v Director-General of Social Security (1985) 60 ALR 225 (Bowen CJ, Fisher and Lockhart JJ). As Kiefel J said in Groth v Secretary, Department of Social Security (1995) 40 ALD 541:
"The phrase 'special circumstances', it has been said, although imprecise is sufficiently understood not to require judicial gloss: Beadle's case (at ALR 229; ALD 674), and for the present purposes it is sufficient to observe that it would require something to distinguish Mr Groth's case from others, to take it out of the usual or ordinary case. " (page 545)
Sad as it is to say, there is nothing to take Mrs Ward's circumstances outside the usual or ordinary case. Mrs Ward is but one on the many people who, having done all that is required of them in relation to notifying Centrelink of their changes of circumstance, find themselves owing significant debts to the Commonwealth. When so many find themselves in that situation, it would seem time to question the scheme. Unfortunately, the fact that so many do, means that Mrs Ward's circumstances are not out of the usual or ordinary case. There are no grounds for finding that there are special circumstances and I am unable to exercise the powers of waiver given by s. 1237AAD of the Act.
For these reasons, I affirmed the decision of the Social Security Appeals Tribunal dated 18 October, 1999.
I certify that the fifty eight preceding paragraphs are a true copy of the reasons for the decision herein of Miss S A Forgie (Deputy President)
Signed: .......................................
M Martinez AssociateDate of Hearing 18 February, 2000
Date of Decision 18 February, 2000
Applicant In person
Advocate for Respondent Mr P Kanowski
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