Ryan and Secretary, Department of Social Services (Social services second review)

[2021] AATA 4403

Ryan and Secretary, Department of Social Services (Social services second review) [2021] AATA 4403 (29 November 2021)

Division:General Division  

File Number:          2020/4908

Re:Adam Ryan

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Senior Member B. Pola

Date:29 November 2021

Place:Brisbane

Pursuant to section 43(1)(c)(i) of the Administrative Appeals Tribunal Act 1975 (Cth), the Tribunal sets aside the decision of the Social Services and Child Support Division of the Tribunal, dated 7 February 2020, and substitutes it with a decision that the Applicant has a legally recoverable debt of $25,007.01 arising from the overpayment of parenting payments during the period of 3 March 2017 to 10 April 2019.

................[SGD].............................

Senior Member B. Pola

Catchwords

SOCIAL SECURITY – overpaid  parenting payments – debt  incurred – misreported fortnightly income as nil or negligible  –  partial or full recovery of  debt  –  debt write-off  –sole administrative error  –  no special circumstances  –  decision affirmed.

Legislation

Administrative Appeals Tribunal Act 1975 (Cth)
Social Security Act 1991 (Cth)

Social Security (Administration) Act 1999 (Cth)

Cases

Beadle and Director-General of Social Security (1984) AATA 176
Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435
Davy and Secretary Department of Employment and Workplace Relations [2007] AATA 1114
Feneley and Secretary, Department of Family and Community Services [2003] AATA 496
GGGD and Secretary, Department of Social Services [2020] AATA 802
Secretary, Department of Social Security v Hales (1998) FCA 2019
Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190

Prygodicz and Commonwealth of Australia (No 2) [2021] FCA 634

Secondary Materials

A guide to Australian Government payments (Department of Social Services)

REASONS FOR DECISION

Senior Member B. Pola
29 November 2021

BACKGROUND

1. The Applicant, Mr Adam Ryan, has been in receipt of a parenting payment (partnered rate). The Tribunal observes that more than 20 letters were sent to the Applicant by the Agency over the period of February 2017 to April 2019 informing the Applicant (amongst other things) of his obligations with respect to declaring any additional income he may be in receipt of which may impact his entitlement to his partnered rate of parenting payment[1]. The Tribunal observes that, when income had been declared by the Applicant, the amount declared was either nil or negligible, as detailed in the latter reasons of this decision.

   [1]     Exhibit R1, Section 37 T Documents, T12, pages 213 to 285.

2. On 7 May 2019, the Agency wrote to the Applicant’s employer seeking information about the Applicant with respect to their employment and income (amongst other items), for the period of 8 February 2017 to 5 April 2019[2].

   [2]     Ibid, pages 286 to 291.

3. On 12 June 2019, the Agency wrote to the Applicant stating it had reassessed the Applicant’s entitlement to Parenting Payment and that he had been paid more than he was entitled to receive. As a result of this, for the period of 3 March 2017 to 10 April 2019, a debt was raised in the amount of $26,842.74[3].

   [3]     Ibid, pages 292 to 294.

4. On 1 November 2019, an Authorised Review Officer (herein referred to as an ‘ARO’) internally reviewed the original decision of the Agency, and found that the decision was correct, with respect to the overpayment of parenting payment to the Applicant resulting in a debt of $26,842.74 for the period of 3 March 2017 to 10 April 2019[4].

   [4]     Ibid, T6, pages 61 to 67.

5. On 13 December 2019, the Applicant applied to Social Services and Child Support Division (herein referred to as ‘SSCSD’) of the Administrative Appeals Tribunal (herein referred as ‘Tribunal’)[5]. On 7 February 2020, the SSCSD of the Tribunal affirmed the decision with respect to the overpayment of parenting payment to the Applicant resulting in a debt of $26,842.74 for the period of 3 March 2017 to 10 April 2019[6].

   [5]     Ibid, T7, pages 68 and 69.

   [6]     Ibid, T2, pages 6 to 10.

6. On 13 August 2020, the Applicant applied for a second review of the decision with the General Division of the Tribunal[7].

   [7]     Ibid, T1, pages 1 to 5.

7. The Tribunal notes that the hearing was originally scheduled to commence on  5 August 2021, however the Respondent requested further time to take final steps in recalculating the debts raised against the Applicant. Both parties consented to an extension of time and the Tribunal granted this request, setting the hearing down for 20 October 2021.

8. During the course of the first day of the hearing, on 5 August 2021, the Tribunal asked the Respondent to clarify the genesis of the manner in which the Applicant’s debt had been raised, and to address this in written submissions prior to the hearing re-commencing on    20 October 2021. The Tribunal’s query originated from an examination of letters sent to the Applicant on 10 September 2018, which stated, “…We are writing to make sure that you are receiving the correct rate of payment/s. We do this by matching our data internally and with information received from a number of government agencies and third parties…”[8].

   [8]     Ibid, T12, pages 258 to 259.

9. The Respondent, in written submissions to the Tribunal, confirmed that prior to raising the debt, the Agency took steps to obtain verified income information and received Employment Declaration forms from the Applicant and his partner’s employers on 5 and 12 June 2019, respectively[9]. The Respondent confirmed that it was the information contained in these forms which was then used to recalculate the Applicant’s entitlement to parenting payment, and from this, a debt was then raised against the Applicant on the basis that the income of the Applicant and his partner had not been correctly taken into account when calculating his rate of parenting payment. The Respondent confirmed that the debt raised against the Applicant was not raised until the Agency had obtained verified payslip information from the Applicant and his partner’s employers, and that, “…the debt does not rely on the averaging of ATO data…”[10]. The Tribunal is satisfied that the Respondent’s submissions address concerns held with respect to the genesis of debts raised against the Applicant, in light of the recent judgment of Prygodicz and Commonwealth of Australia (No 2)[11].

   [9]     Exhibit R3, Respondent Supplementary Submissions, pages 1 to 2, paragraphs 5 to 7.

   [10]    Ibid, paragraph 7.

   [11] [2021] FCA 634.

10. The Respondent’s further submissions, filed on 2 September 2021, requested an order from the Tribunal that the decision under review be set aside and in substitution a decision be made that the Applicant has a recoverable parenting payment debt of $25,007.01 for the period of 3 March 2017 to 10 April 2019 (after a further recalculation of the Applicant’s debts undertaken by the Respondent based on verified payslip information)[12].

    [12]    Exhibit R3, Respondent Supplementary Submission, page 2, paragraph 11; for clarification of dates, see Transcript (20 October 2021), page 6, lines 1 to 12.

    JURISDICTION

11. This is an application to review a decision of the SSCSD of the Tribunal, which affirmed a decision on 7 February 2020, to raise a parenting payment debt of $26,842.74 for the period of 3 March 2017 to 10 April 2019.

12. Section 179(1) of the Social Security (Administration) Act 1999 (herein referred to as the ‘Administration Act’), states:

    179 Application for AAT second review

    (1) Application may be made to the AAT for review (AAT second review) of a decision of the AAT on AAT first review made under subsection 43(1) of the AAT Act.

    (2) For the purposes of subsection (1), the decision of the AAT on AAT first review is taken to be:

    (a) if an AAT first review affirms a decision—that decision as affirmed; or

    (b) if an AAT first review varies a decision—that decision as varied; or

    (c) if an AAT first review sets a decision aside and substitutes a new decision—the new decision; or

    (d) if an AAT first review sets a decision aside and sends the matter back to the Secretary for reconsideration in accordance with any directions or recommendations of the AAT—the directions or recommendations of the AAT…

    [Bolding in original]

13. In accordance with section 179(1) of the Administration Act, the Tribunal has jurisdiction to hear the Applicant’s application of 13 August 2020.

    ISSUES

14. The issues for consideration by the Tribunal in this application are:

    (a)whether the Applicant was overpaid the parenting payment for the amount of $26,842.74, for the period of 3 March 2017 to 10 April 2019;

    (b)whether any overpayment of the parenting payment constitutes a debt to the Commonwealth; and if so

    (c)whether any debt owed to the Commonwealth is recoverable in part, or in full.

    RELEVANT LEGISLATIVE PROVISIONS

    Parenting Payment

15. Section 503(b) of the Social Security Act 1991 (here in referred to as ‘the Act’) sets out how to determine the partnered rate of a person’s parenting payment. It provides:

    503 How to work out a person’s parenting payment rate

    A person’s parenting payment rate is worked out using:

    …

    (b) if the person is a member of a couple—the Benefit PP (Partnered) Rate Calculator at the end of section 1068B (see Part 3.6A).

    [Bolding in original]

16. Module D – Income test in section 1068B-D1, of Part 3.6A of the Act, sets out the method for calculating the effect of a person’s ordinary income and the ordinary income of their partner on the person’s maximum payment rate. Note 3 of Module D sets out provisions with respect to the ordinary income test, in addition to business income, income from financial assets and other relevant provisions.

17. Of relevance to the present application, section 1072 of the Act provides:

    1072 General meaning of ordinary income

    A reference in this Act to a person’s ordinary income for a period is a reference to the person’s gross ordinary income from all sources for the period calculated without any reduction, other than a reduction under Division 1A.

    Note 1: For ordinary income see subsection 8(1). …

    [Bolding in original]

18. Relevantly, section 8(1) of the Act provides the following definition of income:

    … income, in relation to a person, means:

    (a) an income amount earned, derived or received by the person for the person’s own use or benefit; or

    (b) a periodical payment by way of gift or allowance; or

    (c) a periodical benefit by way of gift or allowance;

    but does not include an amount that is excluded under subsection (4), (5) or (8).

    Note 1: See also sections 1074 and 1075 (business income), Division 1B of Part 3.10 (income from financial assets (including income streams (short term) and certain income streams (long term)), Division 1C of Part 3.10 (income from income streams not covered by Division 1B of Part 3.10), section 1099F (exempt bond amount does not count as income) and section 1099K (refunded amount does not count as income).

    Note 2: Where a person or a person’s partner has disposed of income, the person’s income may be taken to include the amount which has been disposed of—see sections 1106-1112.

    Note 3: Income is equivalent to ordinary income plus maintenance income.

    [Bolding in original]

19. The effect of the relevant provisions in determining the entitlement to parenting payment (at a partnered rate) is summarised in the Agency’s Guide to Australian Government Payments. Relevantly, it provides a summary of the effect of the relevant income test and taper rates which were in place, as of 3 March 2017 (the commencement of the debt period for the Applicant), which the Tribunal has transposed[13]:

    [13]    A guide to Australian Government payments (servicesaustralia.gov.au); from 1 January to 19 March 2017. The taper rates are consistent with section 1068B-D30 and section 1068B-D31 of the Act. 

    Partnered parents

    Partner is not a pensioner

    ·For maximum payment, the recipient’s income must be no more than $104 per fortnight and the partner’s income must be no more than $938 per fortnight.

    ·Recipient’s income reduces the rate by 50 cents for each dollar between $104 and $254, and by 60 cents for each dollar above $254 per fortnight.

    ·Partner’s income up to $938 per fortnight has no effect. 

    ·Income over this amount reduces the rate by 60 cents for each extra dollar.

    ·A part payment may be available provided all of the following conditions are met:

    – recipient’s income must be less than $937.84 per fortnight, and

    – partner’s income must be less than $1,746.83 per fortnight, and

    – the combined income of the couple must be less than $1,875.84 per fortnight…

    [Bolding in original]

20. The cumulative effect of these relevant tests and taper rates in the above excerpt is that the Applicant’s gross fortnightly employment income and that of his partner must be taken into account when applying the ordinary income test, in order to determine the rate of partnered parenting payment the Applicant is entitled to.

    Debts

21. The following paragraphs outline relevant legislative provisions which apply to debts incurred resulting from a lack of qualification for a payment, or an overpayment. A debt pursuant to subsection 1223(1) of the Act is incurred when:

    1223 Debts arising from lack of qualification, overpayment etc.

    (1) Subject to this section, if:

    (a) a social security payment is made; and

    (b)a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;

    the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.

    Writing off a debt

22. Section 1236 of the Act provides that the Secretary may write off a debt:

    1236 Secretary may write off debt

    (1) Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.

    (1A) The Secretary may decide to write off a debt under subsection (1) if, and only 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.

    (1B)For the purposes of paragraph (1A)(a), a debt is taken to be irrecoverable at law if, and only if:

    (b) there is no proof of the debt capable of sustaining legal proceedings for its recovery; or

    (c) the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or

    (d) the debtor has died leaving no estate or insufficient funds in the debtor’s estate to repay the debt.

    (1C) For the purposes of paragraph (1A)(b), if a debt is recoverable by means of:

    (a)       deductions from the debtor’s social security payment; or

    (b) deductions under section 84 of the A New Tax System (Family Assistance) (Administration) Act 1999; or

    (c)       setting off under section 84A of that Act;

    the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship.

    (2)       A decision made under subsection (1) takes effect:

    (a) if no day is specified in the decision—on the day on which the decision is made; or

    (b) if a day is specified in the decision—on the day so specified (whether that day is before, after or on the day on which the decision is made).

    (3) Nothing in this section prevents anything being done at any time to recover a debt that has been written off under this section.

    Administrative error

23. Section 1237A of the Act provides that:

    (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).

    Special circumstances

24. Section 1237AAD of the Act provides that:

    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, the Administration 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.

    Relevant notice

25. Section 68(2) of the Administration Act, provides the following:

    The Secretary may give a person to whom this subsection applies a notice that requires the person to do any or all of the following:

    (a)inform the Department if:

    (i) a specified event or change of circumstances occurs; or

    (ii) the person becomes aware that a specified event or change of circumstances is likely to occur;

    (b) give the Department one or more statements about a matter that might affect the payment to the person of the social security payment;

    …

26. Section 100(1) of the Administration Act provides that:

    100 Automatic rate reduction—recipient not complying with subsection

    68(2) notice

    (1) Subject to subsection (2), if:

    (a) a person who is receiving a social security payment is given a notice under subsection 68(2); and

    (b) the notice requires the person to inform the Department of the occurrence of an event or change of circumstances within a specified period (the notification period); and

    (c) the event or change of circumstances occurs; and

    (d) the person does not inform the Department of the occurrence of the event or change of circumstances within the notification period in accordance with the notice; and

    (e) because of the occurrence of the event or change of circumstances, the rate of the social security payment is to be reduced;

    the social security payment becomes payable to the person at the reduced rate on the day on which the event or change of circumstances occurs.

    [Bolding in original]

27. Therefore, in circumstances where a person is in receipt of a social security payment and is given notice under section 68(2) of the Administration Act by the Agency, and there is a change in the person’s circumstances which the person does not inform the Agency about, the social security payment becomes payable to that person at the reduced rate on the day the change of circumstance occurs.

    CONSIDERATION

28. The application was heard in Brisbane on 20 October 2021, with both the Applicant (who was self-represented), and the Respondent (represented by Mr Chris Murphy from Services Australia) appearing by telephone. The Tribunal considered oral submissions made by the Applicant and Respondent, in addition to submitted written evidence, as outlined in the Exhibit Register (Annexure 1) of these reasons. 

    (a) Whether the Applicant was overpaid the parenting payment?

29. During the course of cross-examination, the Applicant conceded that he had been overpaid the parenting payment[14]. The Applicant does however contend that he had made attempts to appropriately declare his income and that there was an administrative error on the Agency’s behalf. The Tribunal will deal with these contentions of the Applicant in the later reasons of this decision.

    [14]    Transcript (20 October 2021), page 8, lines 1 to 3.

1. The Tribunal has before it the following evidence:

   (a)An Employment Declaration form from the Applicant’s employer confirming that the Applicant was employed on a full-time basis, with gross earnings of $1007.00 per week for 38 hours of work, from 15 September 2014[15].

   (b)An excerpt from a wages book from the Applicant’s employer for the period of  1 January 2017 to 30 June 2019, indicating the Applicant’s gross wage, tax paid and net wages paid each week[16].

   (c)Letters from the Agency sent to the Applicant confirm the Applicant’s entitlement to parenting payment was being calculated on nil, or negligible declared income for the Applicant and his partner[17].

   (d)It is observed that the Applicant’s wife also significantly underdeclared her income during the relevant debt period[18].

   [15]    Exhibit R1, Section 37 T Documents, T5, pages 53 to 57.

   [16]    Exhibit R3, Respondent’s Supplementary Submission – Attachment A, pages 1 to 9.

   [17]    Exhibit R1, Section 37 T Documents, T12, pages 211 to 281.

   [18]    Ibid, T9, pages 73 to 74; and Exhibit R3, Respondent’s Supplementary Submission – Attachment C, pages 31 to 34.

2. Although not accepted by the Applicant (and discussed in the later reasons of this decision), the Agency issued many notices to the Applicant, pursuant to section 68(2) of the Administration Act, notifying the Applicant that his parenting payment was being calculated on nil or negligible income[19]. Due to the Applicant failing to declare their income correctly to the Agency during the period of the debt (3 March 2017 to 10 April 2019), section 100(1) of the Administration Act is enlivened, and the parenting payment paid to the Applicant becomes payable to the Applicant at the reduced rate from the start of the debt period.

   [19]    Ibid, T12, pages 200 to 300.

3. The Tribunal is satisfied that during the period of 3 March 2017 to 10 April 2019, the Applicant was receiving a greater amount of parenting payment than he was otherwise entitled to, as the payment was calculated on income of the Applicant and his partner which was significantly less than their combined actual income.

4. Pursuant to Module D of section 1068B and having regard to the relevant provisions relating to the ordinary income test within the Act (as referred to by the Tribunal in earlier reasons of this decision), the Tribunal is satisfied the Applicant and his partner’s gross fortnightly income exceeded the relevant requirements. The Applicant was subsequently overpaid $25,007.01 in parenting payment during the period of 3 March 2017 to 10 April 2019.

   (b) Whether any overpayment of the parenting payment made to the Applicant constitutes a debt to the Commonwealth?

5. As the Tribunal has transposed in earlier reasons of this decision, pursuant to section 1223(1) of the Act, a person who receives a social security payment and obtains the benefit of the payment which they were not entitled to for any reason, subsequently owes the amount of that payment to the Commonwealth as a debt. 

6. In the present matter, the Tribunal has found that the Applicant received a greater amount of parenting payment than they were otherwise entitled to receive during the period of  3 March 2017 to 10 April 2019.

7. The Tribunal therefore finds that the $25,007.01 overpayment of the parenting payment received by the Applicant, during the period of 3 March 2017 to 10 April 2019, was calculated on the incorrect income of the Applicant and his partner, and constitutes a legally recoverable debt to the Commonwealth, pursuant to section 1223(1) of the Act.

   (c) Whether any debt owed to the Commonwealth is recoverable in part or in full?

8. In establishing whether the Applicant’s overpaid carer payment is recoverable in part or in full, the Tribunal refers to his Honour French J (as his Honour then was), in Secretary, Department of Social Security v Hales[20], who stated:

   …The taxpayer is entitled to expect that in the ordinary course money paid to people which they are not entitled to receive will be recovered, albeit in a way appropriate to the circumstances which led to the overpayment and the circumstances of the persons concerned. However, the confining of a recovery regime by rigid rules, particularly in this area of the law, is likely to be productive of unfair or harsh outcomes in some of the great variety of fact situations that can arise. There are provisions in the Act which recognise that reality. They relate to the writing off and the waiver of debts otherwise due to the Commonwealth...

   [20] (1998) FCA 2019 at [1].

9. As previously outlined in these reasons, there are circumstances where the recovery of outstanding debts to the Commonwealth can be either written off or waived. Relevant to the Applicant’s legally recoverable debt, the Respondent may write off or waive the Applicant’s debt if the requirements set out in sections 1236, 1237A, or 1237AAD of the Act are met.

   Write off debt (section 1236 of the Act)?

10. Section 1236 of the Act gives the Secretary power to write off the debt for a stated period, or otherwise if one or more criteria are met in section 1236(1A) of the Act (set out in earlier reasons of this Decision), that the Secretary may decide to write-off a debt in circumstances where the:

    (a)debt is irrecoverable at law; or

    (b)debtor has no capacity to repay the debt; or

    (c)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.

11. With respect to the evidence before it, the Tribunal is satisfied the debt is recoverable at law as there is no evidence to suggest the Applicant satisfies any of the criteria pursuant to section 1236(1B) of the Act.

12. Regarding the financial circumstances of the Applicant, during the course of the hearing the Applicant gave evidence that his financial situation had deteriorated since providing information to the Agency in February 2020[21]. However, the Applicant acknowledged that he and his partner had begun repaying their debts off by way of deduction from pension payments they were both in receipt of from the Agency. The Tribunal observes that it is open to the Applicant and his wife to negotiate the amount of repayment with the Agency as his financial circumstances change.

    [21]    Exhibit R1, T2, pages 11 to 20; Transcript (20 October 2021), pages 13 to 17.

13. Whist the term ‘severe financial hardship’ is not defined within the Act, it has been considered on numerous occasions by many decision makers. The Tribunal refers to the decision of Feneley and Secretary, Department of Family and Community Services[22], where the Tribunal stated:

    … Severe financial hardship is not defined in the Act. However, the meaning of the term, while not implying destitution goes beyond straightened financial circumstances and imports a need for the particular circumstances of a person to include suffering of a severe or extreme nature…

    [22] [2003] AATA 496 at [36].

14. Certainly, the Tribunal understands the financial circumstances of the Applicant require careful management, however the Tribunal is not satisfied based on the evidence of the Applicant that he is in severe financial hardship. The Tribunal is satisfied the Applicant meets the requirements of section 1236(1C) of the Act.

15. The Tribunal is satisfied that the debt is recoverable at law, the Applicant has the capacity to repay the debt, the whereabouts of the Applicant is known, and that there is no evidence to suggest it is not cost effective for the Commonwealth to take action to recover the debt. The Tribunal therefore finds that the Applicant’s debt to the Commonwealth cannot be written off pursuant to section 1236 of the Act.

Waiver of debt arising from Administrative error (section 1237A of the Act)?

1. Section 1237A of the Act provides that the Commonwealth 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.

2. The Tribunal refers to Sekhon v Secretary, Department of Family and Community Services[23], where the Full Federal Court observed:

   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.

   [Tribunal underline for emphasis]

   [23] [2003] FCAFC 190 at [35].

3. During the hearing, it was evident the Applicant’s main contention was that he had, on numerous occasions, sought to declare his income appropriately to the Agency, and the Agency had failed to correspond with him. The Applicant gave evidence that:

   (a)At one stage when he was on a set wage, the system would not allow him to update his earnings, but it would let his partner update hers. The Applicant claimed that he raised this with the Agency and was told that system calculates his entitlement off the set wage, and that they only time he had to get in contact with the Agency was when his pay had changed[24].

   (b)The Applicant claimed that his employer had been in contact with the Agency several times about the Applicant’s pay increases each year, and he wasn’t sure how this had not been updated[25].

   (c)The Applicant claimed that he was not receiving mail sent to his myGov account, as he had thought correspondence from the Department was being sent via Australia Post. He also stated that when he sought to access his myGov account by resetting his password, the correspondence in the account was wiped, and he had lost all his correspondence[26].

   [24]    Transcript (20 October 2021), page 7, lines 1 to 11.

   [25]    Ibid, lines 13 to 18.

   [26]    Ibid, page 10, lines 1 to 26.

4. The Tribunal has difficulties accepting the contentions of the Applicant as summarised above as the evidence before the Tribunal does not support them. There is evidence before the Tribunal in a file note from the Agency recording a phone call from the Applicant on        21 February 2018, where he had advised that he was currently undertaking casual work and was wanting to know if he was still eligible for parenting payment.

5. The Agency subsequently wrote to the Applicant on 28 February 2018 asking him to report his income. Further letters were sent to the Applicant on 14 March 2018, 27 March 2018, 11 April 2018, 24 April 2018, and 9 May 2018, respectively[27]. The Tribunal observes the Applicant had only declared $60 income on 28 February 2018, and $80 income on 28 March 2018[28]. The evidence before the Tribunal is that the declared income of the Applicant is significantly less than his actual earnings for these periods, where the payroll records indicate the Applicant received gross income of $874 per week between the period of 19 February 2018 to 28 March 2018[29].

   [27]    Exhibit R1, Section 37 T Documents, T11, page 178; T12, pages 233 to 236.

   [28]    Ibid, T9, page 73.

   [29]    Ibid, T12, page 235; Exhibit R3, Respondent’s Supplementary Submissions – Attachment A, page 4.

6. The evidence of the Agency clearly shows that between 3 March 2017 to 10 April 2019, the Applicant had declared his income on only seven occasions (two of which are mentioned in the above paragraph).

7. A further difficulty the Tribunal has with the Applicant’s contention is that as a recipient of parenting payment, he has an obligation to inform the Agency of changes in his circumstances, including changes to his income, and the income of his wife. This is a point the Applicant accepted during cross-examination[30]:

   Respondent:             … You do understand, don’t you, that it’s your obligation as the recipient of the payment, to keep the Department informed of your income, don’t you?  

   Applicant:                Yes.  Yes, I do, and we did.

   [30]    Transcript (20 October 2021), page 11, lines 5 to 8.

8. The Tribunal observes that on numerous occasions decision makers have not accepted a waiver of debt based on sole administrative error where a person has failed to comply with reporting requirements to the Agency after notices have been sent to them[31].

   [31]    See GGGD and Secretary, Department of Social Services [2020] AATA 802 at [79] to [81], citing, inter alia Stafford and Secretary, Agency of Social Services (Social Services second review) [2018] AATA 2746 at [78] (Member Edwardes).

9. The Tribunal is therefore of the view the Applicant’s debt of $25,007.01 to the Commonwealth for the period of 3 March 2017 to 10 April 2019 was not attributable solely to administrative error, and therefore recovery cannot be waived pursuant to s1237A of the Act.

   Waiver in special circumstances (section 1237AAD of the Act)?

10. As outlined in earlier reasons of this decision, section 1237AAD of the Act provides:

    1237AAD Waiver in special circumstances

    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, the  Administration 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.

11. The Tribunal refers to Beadle and Director-General of Social Security[32], where the Tribunal observed:

    An expression such as "special circumstances" is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.

    [Tribunal underline for emphasis]

    [32] (1984) AATA 176 at [12].

12. The Tribunal refers to Davy and Secretary Department of Employment and Workplace Relations[33], where the Tribunal stated that:

    …“special circumstances” are not merely directed to the person’s own circumstances. Rather, they are directed to those that are “special circumstances ... that make it desirable to waive”. That necessarily requires a consideration of the person’s individual circumstances but also a consideration of the general administration of the social security system. Waiver of the debt would mean that Mr Davy would have had the benefit of part of his DSP in circumstances in which he was not entitled to it. Certainly, he did not know that his father was giving him his own money but the fact that he was deceived by his father does not mean that it is desirable to waive the debt. He has had the benefit of the money and there is no injustice in requiring him to repay the money of which he has had the benefit but not the entitlement. His not knowing that his father had continued to receive the money does not take him outside the expectation that all social security recipients should repay money when they receive money but are not entitled to it. The system of administration of the SS Act does not visit any injustice for many if not all social security recipients but it did not lead to any injustice or unfairness on Mr Davy that is not visited, or potentially visited, upon all other recipients of social security payments under the Act. Therefore, I am not satisfied that there are special circumstances that make it desirable to waive the debt under s 1237AAD of the Act.

    [33] [2007] AATA 1114 at [80].

13. Section 1237AAD(a) of the Act requires the Secretary to waive the right to recover all or part of a debt if the Secretary is satisfied that the debt did not result wholly or partly from the Applicant knowingly making a false statement or representation, or knowingly failed to omit or comply with a provision of the Act or the Administration Act.

14. When applying the term “knowingly”, with reference to section 1237AAD(a) of the Act, the Tribunal refers to Callaghan and Secretary, Department of Social Security[34] (herein referred to as ‘Callaghan’), where the Tribunal observed:

    There is nothing in section 1237AAD which suggests that the word "knowingly" should be given any meaning other than that a person has actual knowledge, rather than constructive knowledge, that he or she is making a false statement or representation or that he or she is failing or omitting to comply with a provision of the Act. That actual knowledge is to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time and to events surrounding the false statement or the act or omission.

    [34] (1996) 45 ALD 435 at [48].

15. The Respondent has contended that it is open to the Tribunal to find that the Applicant had knowingly failed to comply with his notification obligations to the Agency under the Administration Act in circumstances where there is a large discrepancy between the income the Applicant has earned, and the income the Applicant declared to the Agency[35].

    [35]    Exhibit R2, Respondent’s Statement of Facts, Issues and Contentions, page 10, paragraph 54.

16. The Tribunal has detailed in the earlier reasons of this decision its reservations with respect to accepting the Applicant’s contentions regarding his attempts to update his income with the Agency, and the evidence which demonstrates that this did not occur. The Tribunal observes that in the decision of Callaghan, the Tribunal made a distinction between knowingly failing to declare income and fraudulently omitting income[36]. The Tribunal makes the same distinction in the present application with respect to the Applicant’s failure to declare his income to the Agency.

    [36] (1996) 45 ALD 435 at [50].

17. The Tribunal finds that the Applicant knowingly failed to comply with his obligations and because of this, the discretion to waive the debt or a portion thereof does not arise under section 1237AAD(a) of the Act.

18. As the Tribunal has found the Applicant knowingly failed to comply with his obligations to report his income in accordance with the relevant provisions in the Administration Act, the Tribunal need not consider the remaining elements of section 1237AAD of the Act, as to be successful, a person must meet section 1237AAD(a) of the Act (in addition to satisfying the remaining sections 1237AAD(b) and (c) of the Act). However, for completeness, the Tribunal does not consider the Applicant’s circumstances are sufficiently special or unusual to warrant the exercise of the discretion in section 1237AAD of the Act to waive the Applicant’s debt.

    Summary

19. The Tribunal concludes that the overpayment of parenting payment received by the Applicant during the period of 3 March 2017 to 10 April 2019 is a debt due to the Commonwealth by the Applicant and constitutes a legally recoverable debt pursuant to section 1223(1) of the Act. The Tribunal has found the Applicant’s debt to the Commonwealth must be recovered as a write-off on the basis of severe financial hardship, or waiver on the basis of administrative error, or special circumstances is not warranted.

    DECISION

20. Pursuant to section 43(1)(c)(i) of the Administrative Appeals Tribunal Act 1975 (Cth), the Tribunal sets aside the decision of the Social Services and Child Support Division of the Tribunal, dated 7 February 2020, and substitutes it with a decision that the Applicant has a legally recoverable debt of $25,007.01 arising from the overpayment of parenting payments during the period of 3 March 2017 to 10 April 2019.

    I certify that the preceding 64 (sixty-four) paragraphs are a true copy of the reasons for the decision herein of Senior Member B. Pola

    ………[SGD]….………………

    Associate

    Dated: 29 November 2021

    Date of Hearings:                   5 August and 20 October 2021

    Applicant:  Mr Adam Ryan (Self-represented)

    Solicitor for Respondent:       Mr Chris Murphy (Services Australia)

    Annexure 1 – Exhibit Register

EXHIBIT	DESCRIPTION OF EVIDENCE	PARTY	DATE OF DOCUMENT	DATE RECEIVED
R1	T Documents (pages 1 to 300)	R	17 December 2020	17 December 2020
R2	Respondent’s Statement of Facts, Issues and Contentions (pages 1 to 13) Attachment A – FISD screen	R	4 May 2021	10 May 2021
R3	Respondent Supplementary Submissions (pages 1 to 34)	R	2 September 2021	2 September 2021
R4	Contact File Notes (01/06/20 – 30/07/20)	R	11 September 2020	11 September 2020