Reynolds and Secretary, Department of Employment and Workplace Relations
[2007] AATA 1479
•28 June 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 1479
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2006/221
GENERAL ADMINISTRATIVE DIVISION ) Re KYM REYNOLDS Applicant
And
SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS
Respondent
DECISION
Tribunal Mr SC Fisher, Member Date28 June 2007
PlaceBrisbane
DecisionThe Tribunal decides that the decision under review should be set aside and the portion of the parenting payment (partnered) debt of $8,153.13 attributable to the period 5 April 2004 to 3 May 2005 is to be waived on the basis of sole administrative error within section 1237A of the Social Security Act 1991.
..................[Sgd]............................
Member
CATCHWORDS
SOCIAL SECURITY – parenting payment (partnered) – partner’s income not reported immediately to Centrelink – whether overpayment was a sole administrative error – whether debt can be waived – whether special circumstances exist
Social Security (Administration) Act 1999 (Cth) Part 4, Division 5
Social Security Act 1991 (Cth) ss 1064, 1223, 1237A, 1237AAD
Administrative Appeals Tribunal Act 1975 (Cth) ss 37, 43
A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) s 101Federal Court Rules Order 52, r 15
Social Security v Murphy [1998] FCA 809
Ajka Pty Ltd v Australian Fisheries Management Authority (2003) 74 ALD 21
Bantick and Secretary, Department of Family and Community Services [2003] AATA 472
Bramwell v Repatriation Commission (1998) 51 ALD 56
Collins v Minister for Immigration and Ethnic Affairs (1981) 36 ALR 598
Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 50 ALD 186
Haggerty v Secretary, Department of Education, Training and Youth Affairs [2000] FCA 1278
Sekhon v Secretary, Department of Family and Community Services (2003) 132 FCR 126
Secretary, Department of Social Security v Hales (1998) 82 FCR 154Secretary, Department of Employment & Workplace Relations v Homewood (2006) 91 ALD 103
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Beadle v Director-General of Social Security (1985) 60 ALR 225
Green and Secretary, Department of Social Security (1990) 21 ALD 772
Re Ivovic and Director-General of Social Services (1981) 3 ALN N95
Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690
Trimboli v Secretary, Department of Social Security (1989) 86 ALR 64
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Dranichnikov v Centrelink (2003) 75 ALD 134
Ryde v Secretary, Department of Family and Community Services [2005] FCA 866Haidar v Secretary, Department of Social Security (1998) 52 ALD 255
Kertland v Secretary, Department of Family and Community Services (1999) 95 FCR 64Secretary, Department of Family and Community Services and Danielsen-Jensen (2004) 86 ALD 790
Secretary, Department of Family and Community Services and SRKKKK (2005) 86 ALD 396
Ubachs v Secretary of the Department of Family and Community Services [2004] FCA 310
Jazazievska v Secretary, Department of Family and Community Services (2000) 65 ALD 424
Secretary, Department of Employment and Workplace Relations and Carabott (2006) 89 ALD 726
McAliney and Secretary, Department of Family and Community Services (2005) 83 ALD 316
Strang and Secretary, Department of Employment and Workplace Relations [2006] AATA 51REASONS FOR DECISION
28 June 2007 Mr SC Fisher, Member Introduction and background
1. Ms Kym Reynolds ("the Applicant") has been in receipt of parenting payment (partnered) paid to her by the Secretary, Department of Employment and Workplace Relations (who will be referred to as "Centrelink" interchangeably with the "Respondent" in these Reasons for Decision).
2. In outline form, the background to this appeal is as follows:
A.The Applicant’s partner commenced a cadetship on 4 March 2004. The Applicant did not report the cadetship income to Centrelink at that time.
B.On 3 April 2004, the Applicant returned a Study Details form (S1, folio 1) disclosing her partner's income from his cadetship. Centrelink did not process the information from this Study Details form because it was no longer required for Centrelink's purposes.
C.Also on 3 April 2004, the Applicant's partner disclosed income from employment as a taxi driver in an Income and Investments form but did not affirmatively indicate income from any other sources.
D.On 5 April 2004, the Applicant advised Centrelink by telephone that her partner had received income from his cadetship. The Centrelink officer to whom the Applicant spoke did not code the computer system to record this disclosure as relating to the future. This meant that the Applicant had to continue to report income on a fortnightly basis.
E.On various dates between 20 April 2004 and 1 June 2004, the Applicant advised Centrelink of nil income.
F.On 10 May 2005, the Applicant advised Centrelink that her partner had been receiving income from his cadetship on a continuing basis.
G.During the period 25 February 2004 to 3 May 2005 the Applicant was paid parenting payment (partnered) of $10,485.31 but was entitled only to $2,332.18. The difference of $8,153.13 represents an overpayment of parenting payment (partnered) which Centrelink now seeks to recover.
H.Centrelink raised a debt against the Applicant in the amount of $8,153.13 on 2 September 2005.
I.The Authorised Review Officer affirmed the debt recovery decision on 28 November 2005.
J.On 3 March 2006, the Social Security Appeals Tribunal affirmed Centrelink’s decision below.
K.On 3 April 2006, the Applicant appealed to this Tribunal.
Jurisdiction
3. In a procedural sense, the Tribunal has jurisdiction in this appeal by virtue of Part 4, Division 5 of the Social Security (Administration) Act 1999 (“the Administration Act”). In a substantive sense, the merits of this appeal are governed by the Social Security Act 1991 (“the Act”).
The Decision under Review
4. The decision under review is a decision made by the Social Security Appeals Tribunal on 3 March 2006 that Centrelink was entitled to raise and recover a parenting payment (partnered) debt in relation to the Applicant in the amount of $8,153.13 for the period 25 February 2004 to 3 May 2005.
The Role of the Tribunal
5. The role of the Tribunal is to review the merits of the decision before it: section 43 of the Administrative Appeals Tribunal Act 1975 and Secretary, Department of Social Security v Murphy [1998] FCA 809. The Tribunal is guided by the norm that it should reach the “correct and preferable decision on the basis of the material before it”: Ajka Pty Ltd v Australian Fisheries Management Authority (2003) 74 ALD 21 at 31. “The Tribunal is required to stand in the shoes of the original decision-maker and consider all evidence anew, bearing in mind statutory provisions and any significant legal precedent”: Bantick and Secretary, Department of Family and Community Services [2003] AATA 472 at [23]. The Tribunal proceeds de novo: Bramwell v Repatriation Commission (1998) 51 ALD 56 at 60 per Weinberg J. The Tribunal must base its decision upon the material that is logically probative of the existence of facts that emerge from the evidence before it: Collins v Minister for Immigration and Ethnic Affairs(1981) 36 ALR 598 at 601.
The Material Before the Tribunal
6. The following documentary evidence was before the Tribunal:
Exhibit 1 Documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (documents T1 – T81).
Exhibit 2Supplementary Documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (documents S1 – S9).
Exhibit 3Witness Statement of Ross Vincent Charles Watson dated 23 October 2006.
Exhibit 4Centrelink instructions document no 106.03100 (Assessing and coding Module I -- Income and investments).
Exhibit 5Centrelink instructions document no 106.03200 (Assessing and coding Module ST -- Study details).
Exhibit 6Payment summary for Mr Watson from Centrelink Development Employment Project (CDEP).
Exhibit 7Letter from Centrelink to the Applicant dated 28 January 2004.
Exhibit 8Letter from Centrelink to the Applicant dated 3 February 2004.
Exhibit 9Letter from Centrelink to the Applicant dated 9 March 2004.
Exhibit 10Letter from Centrelink to the Applicant dated 1 June 2004.
Exhibit 11Letter from Centrelink to the Applicant dated 1 July 2004.
7. The Applicant was represented by Ms R Wilkinson from Legal Aid Queensland. Written submissions were made on behalf of the Applicant.
8. The Respondent lodged documents T1 – T81 and S1 – S9 under section 37 of the Administrative Appeals Tribunal Act 1975.These documents were taken into evidence and the Tribunal ascribed “Exhibit 1” and "Exhibit 2" respectively to these documents for the purposes of these Reasons for Decision.
9. The Respondent was represented by Mr Matthew Black, a departmental advocate. The Respondent’s advocate provided a Statement of Facts and Contentions to the Tribunal.
10. The Tribunal carefully considered all of the documentary and oral evidence before it.
Evidence
11. The Applicant gave evidence on her own behalf, and so did her partner, Mr Ross Watson. The Respondent called evidence from two Centrelink officers.
Evidence: The Applicant
12. Ms Reynolds' evidence was to the following effect:
A.Ms Reynolds said that she had tried to comply with her Centrelink obligations and that she was surprised by the debt.
B.Ms Reynolds said that when she reported her partner's CDEP income to Centrelink, she told them this programme ran for three years and that accordingly she was told that that there was no need for her to report his income from CDEP (because it is a continuing payment) but that she had to report his income from taxi driving.
C.Ms Reynolds said that as far as she was concerned, Centrelink had all the right information to properly process her payments and to calculate them correctly.
D.Ms Reynolds said that the times she reported nil income to Centrelink was because her partner had not had any money from taxi driving for the relevant period.
E.Ms Reynolds said that she relied on a conversation her husband had had with some colleagues at work where he was told (and he in turn told her and she believed) that because of the number of people in the household at the time, the amount of their Centrelink payments was not too high.
F.When it came to letters from Centrelink: Ms Reynolds said that she read them and actioned them but thought that Centrelink was giving her the correct amounts given what she told Centrelink about her financial affairs, her partner’s financial affairs and the information they had on their records.
G.Ms Reynolds said that she was confused by the Centrelink letter of 1 June 2004 which recorded nil earnings.
13. The Tribunal accepts that Ms Reynolds was a witness of truth. There were no issues of credit concerning her evidence. The Respondent did not challenge her credibility in cross-examination.
Evidence for the Applicant: Mr Watson
14. Mr Watson (the partner of the Applicant) gave evidence, and his evidence was to the following effect:
A.Mr Watson adopted as true and correct his written statement (Exhibit 3) and framed his evidence according to the document.
B.Mr Watson said that he was aware of the need to keep Centrelink informed of his income. Mr Watson said he told his partner what his income was, and then she informed Centrelink of this. Mr Watson said he also completed and returned whatever form Centrelink sent him to complete for income calculation purposes.
C.Mr Watson said he recalled receiving the Module ST and Module I forms from his partner and completing them. Mr Watson said that those forms were bundled together and looked as if they were all connected together. Mr Watson said that he answered "no" to a question “do you receive any income from other sources?" (question 25 on Module I) because he had already filled in the details of his other sources of income earlier in the form.
D.Mr Watson said that if he got any information wrong in the forms, he thought Centrelink would pick this up and correct it as they processed the forms.
Evidence from the Respondent
15. The Respondent called oral evidence from a Centrelink officer, Ms Alison Wormald. Ms Wormald's evidence was to the following effect:
A.Ms Wormald provided a written statement dated 22 September 2006, which although not admitted into evidence, was considered by the Tribunal.
B.Ms Wormald said that she was one of two authors of a document (Exhibit 1, T 27, folio 79). Ms Wormald said that she telephoned the Applicant on 8 April 2004, where she recorded earnings from the partner of the Applicant in order to code PPP correctly.
C.Ms Wormald said that the income of $600 from the cadetship was coded as "IOP", meaning "income for one period", and refers to stimulus-based payments requiring continual reporting by the customer. Ms Wormald said that her practice was to require customers to report fluctuating income on an “IOP" basis to ensure that customers have the responsibility of ongoing reporting rather than leaving the computer system to assume that it had accurately recorded income.
D.In cross-examination, Ms Wormald said she could not remember precisely her particular activities and actions on the day she telephoned the Applicant on 5 April 2004. Ms Wormald said that on that particular day, she was involved in callback activities, which involved perhaps 10 – 15 phone calls in response to particular enquiries made by other Centrelink officers or customers. Ms Wormald said she could not say whether she enquired about the total income of the Applicant's partner. Ms Wormald conceded that the electronic record may not be complete, and that usually there was not sufficient time to enter a full record of a particular conversation. Ms Wormald said that she would not advise someone in the position of the Applicant to report casual income spasmodically.
16. The Respondent called oral evidence from another Centrelink officer, Ms Michelle O'Brien. Ms O'Brien provided a written statement (which formed part of Exhibit 2). Ms O'Brien's evidence was to the following effect:
A.Ms O'Brien said that if a person's income had not changed, the income would be coded as “2WE”.
B.Ms O'Brien said that if income was disclosed, it would be recorded in the computer system.
C.Ms O'Brien said that any Modules provided by customers would normally be actioned by someone inside Centrelink. Ms O'Brien said that customer service officers should check the figures given in the Modules and connect or match information provided to other Centrelink records. Ms O'Brien said that if a particular Module provided by a customer is not relevant, then it would not be actioned.
Issues
17. The issues in this case are two-fold:
A.Whether an admitted overpayment of parenting payment (partnered) of $8,153.13 spanning the period 25 February 2004 to 3 May 2005 should be waived on the basis of "sole administrative error" under section 1237A of the Social Security Act 1991.
B.Whether the right of the Commonwealth to recover the overpayment should be waived on the basis of "special circumstances" under section 1237AAD of the Social Security Act 1991.
18. The Applicant accepted that there was a debt from an overpayment and that it had been calculated properly.
Applicant’s Submissions
19. The submissions of the Applicant were as follows (gleaned from their oral and written submissions):
A.The Applicant submitted that sole administrative error was the cause of the debts for the period from 5 April 2004 to 3 May 2005. Mr Watson and the Applicant had declared the payments and income received between them and it was Centrelink which had failed to properly process things.
B.The Applicant submitted that she was entitled to assume that Centrelink would read her file and the file of her partner in order to determine both qualification and payability when it came to parenting payment (partnered).
C.The Applicant submitted that instruction 106.03100 calls for further investigation, which was not done.
D.The Applicant submitted that the evidence of the Applicant indicated a continuing payment from the Cadetship income of her partner rather than a one-off payment. Centrelink should have coded or recorded this information accordingly. The Applicant urged the Tribunal to accept her evidence to that effect.
E.The Applicant complained that Centrelink's letters of 1 June 2004 and 1 July 2004 were badly written, confusing, inconsistent, and did not alert the Applicant to the fact that Centrelink was using incorrect income details for her partner.
F.The Applicant cited a number of decisions providing examples of sole administrative error which were said to the support the case of the Applicant.
G.The Applicant argued that she had the benefit of the "good faith" receipt within cases such as Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 50 ALD 186 and Haggerty v Secretary, Department of Education, Training and Youth Affairs [2000] FCA 1278.
H.The Applicant argued that there should be a special circumstances waiver within section 1237AAD.
I.The Applicant contended that neither she nor her partner had knowingly made a false statement or a false representation to Centrelink in disclosing income details.
J.The Applicant cited the usual authorities concerning the meaning of special circumstances. The Applicant referred to Sekhon v Secretary, Department of Family and Community Services (2003) 132 FCR 126 in support of the proposition that administrative error on the part of the Commonwealth could amount to part of the "special circumstances" matrix, and urged this upon the Tribunal.
K.The Applicant said that the failure on the part of the Respondent to follow its own procedures was indicative of administrative error and formed part of "special circumstances".
L.The Applicant said that there had been errors or maladministration by Centrelink in failing to action and properly record declarations of income made, in providing the Applicant with incorrect advice (whether she was required to report her partner's CDEP income on a regular basis or whether a one-off reporting of this income was sufficient), the misleading and ambiguous letters sent by Centrelink to the Applicant concerning the level of her partner's income and her poor health and financial circumstances all justified special circumstances waiver.
Respondent’s Submissions
20. The submissions of the Respondent were these (made orally and in a Statement of Facts and Contentions):
A. The only real contest in the case was whether the debt should be recovered.
B. In relation to the administrative error waiver point, the Respondent argued that because the Study Details form was not really required by Centrelink, there was no error in not acting on the disclosure of Cadetship income on the part of the partner of the Applicant of $300 per week, which disclosure took place on 3 April 2004.
C. The Respondent argued that as the Study Details form was not processed until 7 and 8 April 2004, in the meantime the Applicant had already telephoned Centrelink, declared her partner's income, and had been told to continue reporting income. The Respondent argued that it would be reasonable to infer that the Centrelink officer who processed the Study Details form did so after reviewing the electronic record of the earlier phone conversation, noting the advice given to the Applicant to report her partner's income fortnightly and so therefore there was no need to process the Study Details form any further.
D. The Respondent argued that there was no sole administrative error within the Sekhon formulation (Sekhon v Secretary, Department of Family and Community Services(2003) 132 FCR 126 at [35]). The Respondent argued that telephone contacts and other contacts on 3 April 2004, 5 April 2004, 20 April 2004 and 6 May 2004 were all occasions where the Applicant reported nil income. On 1 June 2004, Centrelink had written to the Applicant advising her that nil income was recorded on her account and that she was to advise Centrelink if that was incorrect. Accordingly, there was no sole administrative error. Therefore, section 1237A did not avail the Applicant.
E. The Respondent argued that there was no good faith receipt because the Applicant was aware her payments were too high.
F. The circumstances of the Applicant were not unusual, uncommon or exceptional as to justify special circumstances waiver under section 1237AAD. The Applicant was not in severe financial hardship as to warrant her circumstances being classified as special in the relevant sense.
G. The debt should be recovered and the decisions below affirmed.
Discussion of the Evidence
21. The Tribunal noted there was a dispute about some of the primary facts which have taken place in this case.
22. The Tribunal accepted the Applicant as a truthful witness.
23. The Applicant was told by a Centrelink officer on 5 April 2004 that she was not required to report cadetship income or any CDEP income as these were ongoing. The Centrelink electronic record of this conversation is incomplete, and the Tribunal prefers the account of that conversation given by the Applicant.
Findings of Fact
24. Based upon the evidence before it, the Tribunal makes the following findings of fact:
A.The Applicant was told by a Centrelink officer on 5 April 2004 that she was not required to report her partner's cadetship income or any CDEP income as these were ongoing.
B.The Applicant disclosed her partner's income from his cadetship and told Centrelink it ran for three years.
C.Centrelink failed to process the applicant's partner's income from his cadetship.
D.The Applicant’s partner received nil income from taxi driving activities between 20 April 2004 – 1 June 2004.
E.On 29 June 2004, the Applicant’s partner reported income from taxi driving.
F.On 1 July 2004, Centrelink sent the Applicant a letter informing her she was no longer required to report to get paid, but that changes to her own circumstances and that of her partner were required to be reported within 14 days.
The Legislation
25. Section 1064 of the Act contains the rate calculator used to calculate parenting payment (partnered).
26. Section 1237A provides for waiver of debts that arise from administrative error, and section 1237AAD provides for waiver of debts on the basis of special circumstances.
27. Section 1237A reads:
‘1237A(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).
1237A(1A) Subsection (1) only applies if:
(a) the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or
(b) if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;
whichever is the later.
28. Section 1237AAD reads:
“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.”
Tribunal’s Reasons
29. The relevant legislation is contained in the Social Security Act 1991 ("the Act"), the material portions of which have been referred to above.
30. A starting premise, according to the Federal Court in Secretary, Department of Social Security v Hales (1998) 82 FCR 154, is that if there is an overpayment of income support payments, taxpayers are entitled to expect that in the ordinary course those sort of payments will be recovered, and that is, of course, what the respondent did in this case, but recovery is not automatic. Whilst it is not automatic, certainly there are exceptions to it, and the main exception concerning income support payments has to do with waiver.
31. There was no contest in this case that the Applicant had been overpaid parenting payment (partnered) and that there was a debt within section 1223 of the Act.
32. The first issue in this case concerns waiver on the basis of sole administrative error within section 1237A. The competing contentions have been noted above.
33. In Sekhon v Secretary, Department of Family and Community Services [2003] 132 FCR 126 at [14], Heerey J said “Section 1237A requires waiver where a particular circumstance exists, namely, error. The field of operation of the section is valid, but error-created, debt where the payments which would otherwise be recoverable have been received by the debtor in good faith”.
34. Sekhon v Secretary, Department of Family and Community Services[2003] 132 FCR 126 at [35] explained the operation of the test of causation embedded within section 1237A in these terms:
“The ordinary or usual interpretation of the phrase ‘attributable solely to’ is that it refers to the single or sole cause of the relevant act or event. The word ‘attributable’ means ‘capable of being attributed’. It involves an objective assessment of causation. The words ‘a debt attributable solely to an administrative error’ can be paraphrased as meaning that the only cause that objectively can be ascribed to the relevant debt is an administrative error. An example of this ordinary use of the equivalent phrase ‘solely attributable to’ can be seen, for example, in Jahazi v Minister for Immigration and Ethnic Affairs (1995) 61 FCR 293 at 299-300 where the Court said:
‘…whether a particular causal connection between persecution and membership of a group attracts Convention protection will be resolved not merely by the logic of causality but as a matter of evaluation which has regard to the policy of the Convention. While it is not necessary that the fear of persecution be solely attributable to membership of a relevant social group, a decision-maker can have regard to the extent to which membership of the relevant group is a factor in the risk of persecution’.” (Emphasis added).
35. The Applicant argued that the entire debt period was infected by sole administrative error within section 1237A. The Respondent disputed this, arguing that it had no duty to process the study details form lodged on behalf of the Applicant. The Respondent contended further that by the time the Centrelink officer processed the study details form on or about 7 or 8 April 2004, there was no need for Centrelink to process this form because just beforehand (on or about 5 April 2004), the Applicant had telephoned Centrelink to report her partner’s income. In the opinion of the Tribunal, this sequencing of events points to rather than away from administrative error. There is no basis for the inference urged by the Respondent upon the Tribunal, namely that the Centrelink officer who processed the study details form would have viewed any entries relating to the 5 April 2004 contact. In any case, the processing of the relevant documents took place after, not before, the information was provided and so the chain of causation embedded within section 1237A is not satisfied.
36. Between the Modules ST and I which were lodged with the Respondent, Centrelink had all of the necessary information with which to determine both qualification and payability when it came to the Applicant's parenting payment (partnered). It was Centrelink which failed to properly process the information it was given.
37. The Respondent argued that the Applicant could not succeed on good faith receipt within section 1237A, pointing to the circumstance where the Applicant had some knowledge that her level of payments were too high.
38. The evidence of the Applicant on this point was that she accepted an explanation given to her by her partner that because of the number of children she had, this justified the level of payment she was receiving. This position was maintained in cross-examination. Having regard to the totality of the evidence, including the letter advising changes in reporting requirements in July 2004, the Tribunal is not satisfied that the Applicant did not receive, and continued to receive, her level of parenting payment (partnered) in good faith throughout the debt period. The Tribunal notes it was the suspicion of the partner of the Applicant, not the Applicant personally, which led him to make enquiries at his workplace whether his level of payments were too high or not. In and of itself, this suspicion cannot be imputed to the Applicant personally. The circumstances of the Applicant do not fall within an absence of good faith as described by the Federal Court in Haggerty v Secretary, Department of Education, Training and Youth Affairs [2000] FCA 1278 at [16].
39. Accordingly, the Tribunal is satisfied that the Applicant was overpaid parenting payment (partnered) on the basis of sole administrative error on the part of Centrelink. In the opinion of the Tribunal, it is not the entire amount of the debt that should be waived because the Tribunal was of the opinion that the Applicant only reported her partner's income accurately from 5 April 2004 and not earlier back to the beginning of the debt period on 25 February 2004. It was from 5 April 2004 that the Applicant more accurately complied with her reporting requirements as she understood them. The Tribunal accepted the evidence of the Applicant that she found some of the Centrelink letters confusing when it came to stating the income levels they had recorded for her.
40. The second issue in this appeal concerns the waiver of the parenting payment (partnered) debt raised by the Respondent against the Applicant on the basis of the special circumstances waiver within section 1237AAD (the text of which has been reproduced earlier in these Reasons for Decision). In view of the decision on the sole administrative error, it is not strictly necessary for the Tribunal to consider this matter, but it will do so in the event it is wrong on that point.
41. There are three elements within section 1237AAD, which is a discretionary provision, and as the Federal Court said in Secretary, Department of Social Security v Hales (1998) 82 FCR 154 “That discretion is only enlivened when the Secretary is satisfied that the three conditions specified in paragraphs (a), (b) and (c) of the section are met.”
42. Whether any particular set of circumstances attracts the epithet "special" is a question of fact (see Secretary, Department of Employment and Workplace Relations v Homewood (2006) 91 ALD 103 at 110). "Special circumstances" is used within income support law at various points in which to cushion or temper the exercise of a discretion relating to a power or liability in order to signify or demarcate a particular threshold of circumstances applicable to income support recipients where the adjudication of a decision must take place. "Special circumstances" is also deployed in debt waiver provisions such as section 1237AAD of the Act and section 101 of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (compare Order 52 r 15(2) of the Federal Court Rules which uses the cognate expression “special reasons”).
43. In Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3 it was said that "...’special circumstance’ is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional." In the appeal [Beadle v Director-General of Social Security (1985) 60 ALR 225 at 228], it was said that "...special circumstances must include events which would render [a happening or eventuality]... unfair or inappropriate... We do not think it is possible to lay down precise limits or precise rules... The phrase ‘special circumstances’, although lacking precision, is sufficiently understood in our view not to require judicial gloss".
44. In Green and Secretary, Department of Social Security (1990) 21 ALD 772, this Tribunal collected a series of factors that it thought provided guidance concerning the exercise of the discretion conditioned upon the predicate of "special circumstances" in what is now Section 1184K of the Act. The Tribunal said:
“In Re Ivovic and Director-General of Social Services (1981) 3 ALN N95 the Tribunal identified a number of principles which could be applied in deciding whether special circumstances existed to warrant the exercise of the discretion contained in s 156 of the Act. In that decision, which concerned the liability of the Applicant to repay an amount of sickness benefit paid to him, the Tribunal commented at N97.
·the use of the word "special" is "intended to allow the decision-maker the fullest opportunity to consider the particular circumstances of each case";
·"hardship is a relevant consideration" but regard must be had to the way in which the hardship arose;
·there must exist "factors which justify the making of an exception in whole or in part to the principle of liability which the Act otherwise establishes";
·the decision-maker must have regard to whether, by exercising the discretion in a particular case he/she will be "achieving or frustrating ends or objects which are comfortable with the scope and purpose of the Social Security Act"; and
·"the decision maker must be prepared to respond to special circumstances of any particular case by reason of which strict enforcement of the liability created by the section would be unjust, unreasonable or otherwise inappropriate."
45. The principles set out in Ivovic were approved by the Administrative Appeals Tribunal in Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690 which has been followed generally by the Tribunal.
46. The Federal Court of Australia said in Trimboli v Secretary, Department of Social Security(1989) 86 ALR 64 at 73:
“[The] discretion which is extremely broad and which is not to be confined, save in accordance with usual principles, namely, that it is to be exercised bona fide and for the purposes for which the discretion is conferred, such purposes being determined by reference to the policy and purpose of the Social Security Act: cf Giris Pty Ltd v FCT (1969) 119 CLR 365 at 384.”
47. Later in Groth v Secretary, Department of Social Security (1995) 40 ALD 541 it was stated at 545:
"...[Special circumstances] would require something to distinguish... [the] case from others, to take it out of the usual or ordinary case ... It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary".
48. In Dranichnikov v Centrelink (2003) 75 ALD 134, the Federal Court held at 148 that for a finding of special circumstances to be made (or for “special reasons” to exist):
"...what is required will be circumstances which distinguish the case in consideration from the usual case. There will be a requirement that the circumstances are such that takes the case out of the ordinary..."
49. In Dranichnikov v Centrelink (2003) 75 ALD 134 at 148, Hill J (Kiefel & Hely JJ concurring) said the following concerning the unusual, uncommon or exceptional gloss:
“The Full Court in Beadle comprising Bowen CJ, Fisher and Lockhart JJ, however, was of the view that it was not possible to lay down precise rules as to what constituted special circumstances under the then s 102(1)(a) of the Social Security Act 1947 (Cth). Their Honours point out that the question whether there were special circumstances was one for the decision-maker (in that case the Director-General) bearing in mind the purpose for which the power was given. The reference to the first instance decision from which the words “unusual, uncommon or exceptional” come was not actually affirmed by the Full Court.”
50. A similar observation was made by Branson J in Ryde v Secretary, Department of Family and Community Services [2005] FCA 866 at [25]. The Dranichnikov approach seems to represent a retreat from the position Hill J took in Haidar v Secretary, Department of Social Security (1998) 52 ALD 255 (see also Kertland v Secretary, Department of Family and Community Services (1999) 95 FCR 64).
51. The explanation of the “unusual, uncommon or exceptional” trilogy made by the Full Court of the Federal Court in Dranichnikov v Centrelink does not appear to have affected or limited the use of this particular trilogy by this Tribunal (see for example, Secretary, Department of Family and Community Services and Danielsen-Jensen (2004) 86 ALD 790 and Secretary, Department of Family and Community Services and SRKKKK (2005) 86 ALD 396) and by the Federal Court (see Ubachs v Secretary of the Department of Family and Community Services [2004] FCA 310 and Jazazievska v Secretary, Department of Family and Community Services (2000) 65 ALD 424). The Groth formula (which has also enjoyed wide citation in income support law: see Secretary, Department of Employment and Workplace Relations and Carabott (2006) 89 ALD 726; McAliney and Secretary, Department of Family and Community Services (2005) 83 ALD 316 and Strang and Secretary, Department of Employment and Workplace Relations [2006] AATA 51), with respect, should also be seen as an attempt to paraphrase "special circumstances". This Tribunal is of the view that these paraphrases cannot supplant the statutory language, while at the same time recognising that these paraphrases elucidate the meaning of the statutory language.
52. The clear thrust of some of the authorities discussed above (see in particular Dranichnikov v Centrelink (2003) 75 ALD 134 and Ryde v Secretary, Department of Family and Community Services) is that "special circumstances" should not be interpreted according to synonyms (and in particular not confined by these). The Tribunal considers that the clear and ordinary meaning of the words "special circumstances" is the meaning that should be assigned to them. The Tribunal also reasons that it is important not to approach "special circumstances" against an a priori set of established factual circumstances or recurring factual patterns which have been recognised in the authorities as supporting or generating special circumstances, or which in fact exclude special circumstances (compare Dranichnikov v Centrelink (2003) 75 ALD 134 at 148 and Green and Secretary, Department of Social Security (1990) 21 ALD 772). Accordingly, for any adjudicator to state or conclude that special circumstances precludes the exercise of a power and discretion under relevant provisions of the Act simply because the circumstances of an income support recipient are commonplace, is to misconceive and misapply the provision.
53. The Tribunal took into account the following circumstances and factors as disclosed by the evidence before the Tribunal:
A.The Applicant and her partner are in poor health.
B.The Applicant struggles financially.
C.The Applicant was on the receiving end of some maladministration on the part of Centrelink.
54. Having regard to these matters, and the policy that special circumstances debt waiver should be reserved for the truly needy people in desperate financial circumstances, or those people whose circumstances are outside of the ordinary run of cases, the Tribunal considers that the circumstances of the Applicant are not so special as to justify waiver under section 1237AAD of the Act.
55. Accordingly, were this necessary, the Tribunal would not be minded to apply special circumstances waiver for the benefit of the Applicant.
Tribunal’s Conclusion
56. Based upon the material before it, and for these Reasons, the Tribunal concludes that the correct or preferable decision is that the decision under review should be set aside and the portion of the debt of $8,153.13 which accrued on and after 5 April 2004 up to and including 3 May 2005 should be waived on the basis of sole administrative error within section 1237A of the Social Security Act 1991.
Tribunal’s Order
57. The Tribunal decides that the decision under review should be set aside and the portion of the parenting payment (partnered) debt of $8,153.13 attributable to the period 5 April 2004 to 3 May 2005 is to be waived on the basis of sole administrative error within section 1237A of the Social Security Act 1991.
I certify that the 57 preceding paragraphs are a true copy of the reasons for the decision herein of Member SC Fisher
Signed: …………………………………………………………
Legal Research OfficerDate of Hearing 22 August 2006 and 26 October 2006
Date of Decision 28 June 2007
For the Applicant Ms R Wilkinson, Legal Aid Queensland
For the Respondent Mr M Black, Departmental Advocate
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