Scates and Secretary, Department of Social Services (Social services second review) - [2018] AATA 3461

Scates and Secretary, Department of Social Services (Social services second review) [2018] AATA 3461 (14 September 2018)
Division:GENERAL DIVISION
File Number: 2017/6375
Re:Ralph Scates
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Member D K Grigg
Date:14 September 2018
Place:Brisbane

The decision under review is affirmed.
.............................[sgd].......................................
Member D K Grigg
CATCHWORDS
SOCIAL SECURITY – age pension – overpayment - whether solely attributable to administrative error – consideration of special circumstances and whether they exist – decision under review affirmed
LEGISLATION
Guide to Social Security Law
Social Security Act 1991
CASES
Beadle and Director-General of Social Security (1984) 6 ALD 1
Dranichnikov v Centrelink [2003] FCAFC 133
Secretary, Department of Family & Community Services v Sekhon [2003] FCA 76
Secretary, Department of Social Security v Hales [1997] FCA 1565; (1998) 82 FCR 154
Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190
REASONS FOR DECISION
Member D K Grigg
14 September 2018

Mr Scates applied for the age pension (“AP”) on 22 April 2009.[1] Prior to this, on 1 July 2008, Mr Scates and his wife purchased the following income streams from the Scates’ Superannuation Fund:
(a)$136,110.15 for Mr Scates; and
(b)$665,029 for Mrs McKinnon-Scates.
[1] Exhibit 1, T Documents, T4, pages 75 – 93, Age pension claim dated 22 April 2009.
In his AP application and Income and Assets Form Mr Scates declared that he:[2]
(a)had 50% ownership of household contents and personal effects valued at $5,000;
(b)had 50% ownership of two cars worth $29,000;
(c)had 50% share of a family trust with an account balance of $2288; and
(d)had 0% share of a term deposit balance of $160,000;
(e)had money invested in a superannuation fund which was not paying a pension; and
(f)was not receiving income from an income stream.
[2] Exhibit 1, T Documents, T5, pages 94 – 109, Income and assets form completed 22 April 2009.
In addition to his claim form, Mr Scates also provided an asset position summary prepared by his accountants. According to his accountants:[3]
(a)the Scates family trust held assets of $160,000 in the way of term deposit and $9084 dollars owing by Mr Scates and Mrs Patricia McKinnon-Scates;
(b)the funds for the $160,000 term deposit were loaned to the Scates Family Trust by Adam McKinnon as per a Financial Facility Agreement and were required to be repaid to him at a future date;
(c)the term deposit funds were not the property of Mr Scates or Mrs McKinnon-Scates and should not be attributed to their personal asset position;
(d)the Scates family trust did not owe any money to Mr Scates or McKinnon-Scates personally;
(e)the estimated value of Mr Scates member balance in the superannuation fund was approximately $90,000 taking into account earnings and pensions paid.
[3] Exhibit 1, T Documents, T6, pages 110 – 133, Asset position summary by MBA partnership proprietary limited
dated 1 May 2009.
Centrelink then requested Mr Scates provide information relating to the Scates Family Trust.[4] As a result of that request, Mr Scates also provided the Department of Human Services (“Centrelink”) with the Scates group financial statements for the year ended 30 June 2009 and his individual tax return for the year ended 2009.[5]
[4] Exhibit 1, T Documents, T38, page 507, Letter from Centrelink to Mr Scates dated 28 April 2009.
[5] Exhibit 1, T Documents, T7, pages 134 – 173, The Scates group financial statements and Mr Scates’ individual
tax return for the year ended 30 June 2009.
Following receipt of the information, the Applicant was granted AP on 12 May 2009, which was backdated to 22 April 2009.
These documents were then assessed by a Complex Assessment Officer (“CAO”) who reported that Mr Scates received a distribution of $7,853 in the financial year ended 30 June 2009 from the Scates Family Trust and that there was no further action required.[6] A CAO reviewed Mr Scates position again in December 2009 and noted as follows:[7]
(a)the Scates Family Trust had ceased operating on 30 November 2009; and
(b)the loans had been written off and the income amount was updated to $0.
[6] Exhibit 1, T Documents, T8, pages 174 – 175, Complex assessment officer's report dated 7 October 2009.
[7] Exhibit 1, T Documents, T9, pages 176 – 177, Complex assessment officer's report dated 8 December 2009.
On 20 December 2010, Mr Scates contacted Centrelink and advised that the loan to Mr McKinnon was not a gift but an irrecoverable debt. A Centrelink officer advised Mrs McKinnon-Scates that the loan was treated as a gift because the loan had been forgiven.[8]
[8] Exhibit 1, T Documents T37, page 459, Centrelink record dated 20 December 2010. .
Pursuant to a loan agreement dated 11 November 2011, Mrs McKinnon-Scates stated that she loaned $250,000 to Adam McKinnon at 6.1% per annum with interest payments to be paid monthly in the sum of $1,270 on the last day of each calendar month and that the loan is to be repaid in full upon the sale of a property in Toorak, Victoria, or on demand.[9]
[9] Exhibit 1, T Documents, T 11, page 189, Loan agreement between Mr MacKinnon and Mrs MacKinnon Scates
dated 11 November 2011.
On 8 May 2013 Mrs McKinnon-Scates provided Centrelink with an income and assets form pursuant to which she declared:[10]
(a)that she and her partner did not currently receive any income from work;
(b)she and her partner shared ownership of motor vehicles valued at $40,000 and personal effects valued at $5,000;
(c)she and her partner each had a 50% share of $12,139 in a bank account;
(d)that she had loaned Mr McKinnon $250,000, the total of which was still outstanding.
[10] Exhibit 1, T Documents, T 13, pages 191 – 206, Income and assets form completed by Mrs MacKinnon Scates
dated 8 May 2013.
Between 15 May 2013 and 18 July 2013 Mr Scates and Mrs McKinnon-Scates completed income stream product forms advising Centrelink that they were (and had been) receiving income streams from their superannuation trust fund.[11]
[11] Exhibit 1, T Documents, T13-T26, pages 191-333, Income stream information.
In November 2016 Centrelink recalculated the amount of age pension that Mr Scates had received versus what he had been entitled to and determined that he had been overpaid $1,848.96.[12] As a result of this reconciliation, Centrelink sent Mr Scates an account payable notice on 30 November 2016 advising him that he had been overpaid for the period 1 June 2013 to 23 July 2013 because the amount of $250,000 gifted to Mr McKinnon had not been taken into account in determining his rate of AP. As a result he owed $1,718.39.[13]
[12] Exhibit 1, T Documents, T 27, pages 334 – 339, Centrelink debt calculator dated 30 November 2016.
[13] Exhibit 1, T Documents, T 28, pages 340 – 341, Centrelink notice dated 30 November 2016.
Mr Scates requested that the decision to raise the debt be reviewed by an Authorised Review Officer.[14]
[14] Exhibit 1, T Documents, T 29, page 342, Letter from Centrelink to Mr Scates dated 17 February 2017.
On 3 April 2017 Centrelink calculated the amount of AP that Mr Scates had received between 22 April 2009 and 19 August 2014 and determined that he had been overpaid a total of $54,059.22 during that period.[15]
[15] Exhibit 1, T Documents, T 30, pages 343 – 359, Centrelink debt calculator dated 3 April 2017.
As a result of Centrelink’s decision to raise the Debt, Mr Scates sought a review by an Authorised Review Officer (“ARO”). The ARO determined on 4 April 2017 that:[16]
(e)between 22 April 2009 and 19 August 2014 Mr Scates had been overpaid $54,059.22; and
(f)the amount of $3,271.55 attributable to the period of 17 May 2013 to 19 August 2014 would be waived on the basis of sole administrative error because Centrelink delayed updating Mr Scates income and asset information.
[16] Exhibit 1, T Documents, T 32, pages 362 – 368, Authorised Review Officer’s Decision and Notes dated 4 April
2017.
The current outstanding debt balance owing is $50,377.67 (“Debt”).
Centrelink contends that Mr Scates and Mrs McKinnon-Scates had not advised Centrelink of their income streams prior to 17 May 2013 and as a result they had not been taken into account in the calculation of Mr Scates’ AP.[17] Mr Scates says that he had declared his partner’s income, however the ARO found that the income actually earned by his partner had been more than Mr Scates had declared.[18]
[17] Exhibit 2, Respondent’s Statement of Facts, Issues and Contentions dated 24 November 2017, para 13.
[18] Exhibit 1, T Documents, T11, page 143, Authorised Review Officer’s Decision and Notes dated 18 January 2017.
Since 25 March 2009, and specifically, during the Debt Period, Mr Scates received numerous letters from Centrelink indicating the amount of income and earnings which were being used to calculate his rate of AP and reminding him that he was under an obligation to inform Centrelink within 14 days if his partner earns any income.[19]
[19] Exhibit 1, T Documents, T38, pages 501-574, Letters from Centrelink to Mr Scates between 25 March 2009 and 7
August 2014.
Claim History
Mr Scates lodged an application for review with the Social Services and Child Support Division (“SSCSD”) of this Tribunal on 1 June 2017.[20] The SSCSD rejected Mr Scates’ claim and affirmed the ARO’s decision on 22 September 2017.[21]
[20] Exhibit 1, T Documents, T33, pages 369-370, Request for statement dated 1 June 2017.
[21] Exhibit 1, T Documents, T2, pages 3-9, SSCSD’s Decision and Reasons for Decision dated 22 September 2017.
Mr Scates has sought a review of the SSCSD’s decision by the General Division of this Tribunal.[22]
[22] Exhibit 1, T Documents, T1, pages 1-2, Application for Second Review of a Decision dated 24 October 2017.
ISSUES FOR DETERMINATION
The Tribunal has to decide whether:
(a)Mr Scates has been overpaid his Aged Pension during the Debt Period; and, if yes,
(b)the Debt is recoverable; and
(c)the Debt should be written off for a period or waived.

WAS MR SCATES OVERPAID AP PAYMENTS?

The rates at which people are paid AP is determined using the Pension Rate Calculator A at the end of section 1064 of the Social Security Act 1991 (Cth) (‘the Act’).[23] The maximum basic rate payable varies depending upon a person’s family situation and upon the income they and their partner receive.
[23] Section 117, Act.
If a person is not entitled to the social security benefit they have obtained, 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: section 1223(1) of the Act.
It is not in dispute that the superannuation income streams are an asset that should have been taken into account in calculating Mr Scates’ rate of AP.[24]
[24] Pursuant to sections 9, 11 and 1118 of the Act.
The Tribunal finds therefore that Mr Scates owes the Debt to the Commonwealth.

IS THE DEBT RECOVERABLE?

Even if a debt is owed, the Secretary may write off a debt in certain circumstances set out in section 1236 of the Act which provides:
1236Secretary 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)   ...; or
(d)   it is not cost effective for the Commonwealth to take action to recover the debt.
The Secretary must also 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: section 1237A of the Act.
Further, the Secretary may exercise its discretion to waive the right to recover all or part of the debt if satisfied that:
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.
SHOULD THE DEBT BE WRITTEN OFF? (S 1236)

Is the debt irrecoverable at law?

Section 1236(1B) sets out when a debt is taken to be irrecoverable at law:
(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.
At present Mr Scates is currently repaying the Debt by way of $10 per fortnight.[25]
[25] Exhibit 2, Secretary’s Statement of Facts, Issues and Contentions dated 11 May 2018, para 35.
None of the circumstances set out in section 1236 (1B) of the Act exist in this case and therefore the Tribunal finds that the debt is not irrecoverable at law.
Because Mr Scates was not entitled to the total AP benefit he received during the Debt Period, Mr Scates was overpaid AP payments and the excess amount is a debt due to the Commonwealth which arose when he obtained the benefit of the payment: section 1223(1) of the Act.

Does Mr Scates have capacity to repay the debt?

Section 1236(1C)(a) of the Act provides that if a debt is recoverable by means of deductions from the debtor’s social security payment 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”.
Severe financial hardship needs to involve severe or extreme financial suffering and a person’s entire financial position would need to be materially less than the current rate of their pension.[26]
[26] Re Lumsden and Secretary, Department of Social Security [1986] AATA 228; Stubbs and Secretary, Department
of Family and Community Services [2003] AATA 729; L and Department of Social Security [1995] AATA 159; Secretary, Department of Family and Community Services and Birgden [2003] AATA 67.
Subsequent to the hearing Mr Scates provided, with the Tribunal’s leave, a Financial Information Form and an estimate of his current financial position.
At present Mr Scates is not receiving any AP and relies on his superannuation income stream and franking credit refunds for his living expenses. The information provided by Mr Scates indicates that for the following 12 months he will have a surplus of approximately $5,252 after expenses (which includes his repayments of the Centrelink Debt).[27]
[27] Estimate of Receipts and Expenses for the following 12 months and Financial Information Form dated 15 August 2018.
Based on this information there is no evidence to suggest that Mr Scates suffers from severe financial hardship.

Is it cost-effective for the Commonwealth to recover the debt?

There is no indication from the Secretary that it is not cost-effective for it to recover the debt.

Conclusion

There is no basis for the debt to be written off under section 1236 of the Act.

DID MR SCATES RECEIVE THE OVERPAYMENT IN GOOD FAITH AND WAS THE DEBT, OR A PROPORTION OF THE DEBT, ATTRIBUTABLE SOLELY TO AN ADMINISTRATIVE ERROR? (S 1237A)
Was the debt attributable solely to an administrative error?

If administrative error was the sole cause for the debt arising, the Secretary must waive the right to recover the debt. The debt “must be "attributable solely" to administrative error. It is not enough that, in the absence of administrative error, the debt would not have arisen. Administrative error must be the sole cause, not merely one of multiple causes”: Secretary, Department of Family & Community Services v Sekhon [2003] FCA 76, per Wilcox J (at [41]) and on appeal to the Full Federal Court Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190.
The Secretary accepts there was sole administrative error from 17 May 2013 to 19 August 2014 and that the excess payments of $3,271.55 received in this period were received in good faith. Therefore, this amount has been waived by the Secretary pursuant to s1237A of the Act.[28]
[28] Exhibit 2, Secretary’s Statement of Facts, Issues and Contentions dated 11 May 2018, para 37.
Mr Scates submits (errors in original):[29]
[29] Exhibit 3, Applicant’s Statement of Facts, Issues and Contentions dated 18 April 2018.
I applied for the pension 22 April 2009. Centrelink required further information from my Superannuation accountants, which was supplied (to Wendy ?) by e mail on 1 May 2009. 9 days after it was requested.
Th information provided was the balance of my superannuation, the earnings and pensions paid out of the fund. (copy enclosed) This information would appear to have not been compared with my original application. If it had it would have been apparent that I had erroneously crossed two boxes I should not have and we would not be here today. I look upon this as a sole Centrelink error and responsibility, Otherwise what is the point of asking for information and not reading it once it's provided.
According to Centrelink, they sent various income stream forms for 2009 - 2012 which I did not receive. It was not until 13 June 2013 that I was asked to fill these forms out again or my pension would cease. The forms were immediately completed once I became aware of them and returned promptly. Looking through the files received from the Tribunal which consist of Volumes 1 and 2 I could not find any reference/letters. Why was it left to 13 June 2013 to ask for these missing years. Is this solely a Centrelink error and acceptable?
Every financial year I took a copy of my Superannuation Financial Returns into the Centrelink office at Tweed Heads. It is with interest that l note that not one of these Financial Returns appears in the documentation provided to me (Volumes 1 and 2).
Whilst it appears my ticking of the two incorrect boxes is being magnified whilst within 9 days information correcting my mistake was provided - Centrelink is absolved of all responsibility for due diligence. What is their responsibility towards me?
More recently what finally brought this matter to a head was a letter requesting payment of an overpayment of $1,718.39. which came out of the blue on 30th November 2016. The reason given was a loan of $250,000 from my wife's Superannuation account. After many phone calls to Centrelink requesting clarification and never being called back, I sought the assistance of the Ombudsman. Following this l did receive a call from Centrelink and l asked how this figure had been arrived at as it either had to be income or asset related. .
To this day, I have never been told how this amount was calculated. What they did send me was a computer printout showing what I had been paid compared to what I should have been paid. Copy attached.
Between 2009 - 2012 there would have been changes to the rate of pension. How did Centrelink calculate my new pension rate if I had not provided my updated/current income and assets from 2009 - 2012. Is this another example of Centrelink letting me down?
In Volume 2 - page 447 dated 6 August 2013 I had a phone call with Centrelink where it was suggested I had been overpaid and they were looking into the matter. I didn't hear another thing back on the matter. Why would that be? or is this another acceptable error which I have to wear but could have decreased this debt significantly.
Volume 2 - page 361 relates to the question of whether the debt was due to Centrelink error and the answer was 'YES CLERICAL'. For your perusal is a copy of a Full Federal Court Judgement re sole administration which was awarded against Centrelink and has similarities to what I'm currently experiencing.
I have received Centrelink payments in good faith accepting their calculations regarding assets and income are correct. At no time does Centrelink show a breakdown of their calculation regarding my assets and income.
From May 2009 - June 2013 I could not see any pension payment advice which would show assets and income and pension to be paid, in either Volumes 1 or 2. When my wife became eligible to receive a pension in July 2013, there are notifications showing assets/income plus pension payable. Looking a these figures they don't appear to be correct. One of these notifications dated 17 June 2014 shows assets at $1,794,945.00. and combined income of $44,954.32. We have NEVER had assets to that value. Could this be another Centrelink error? Even though this has nothing to do with my case it highlights what we have been subjected to and we believe 9 years of this turmoil is enough in our lives at this stage

Mr Scates admits that he made an error in his AP claim form but contends that Centrelink should have inferred from the information he provided in April 2009 that he was receiving an income stream and made further inquiries. In particular, Mr Scates refers to the letter from his accountants which was provided to Centrelink which specifically says that “the estimated balance of Mr Scates’ member balance in the superannuation fund is approximately $90,000 “taking into account earnings and pensions paid” (emphasis added).
The Tribunal can understand why Mr Scates believes that this should have lead to Centrelink making further inquiries. However, it is not Centrelink’s obligation to make inquiries and determine on its own whether Mr Scates and his wife were in receipt of income streams. Notices sent to Mr Scates, for example, the notice dated 7 September 2009, informed Mr Scates the basis on which his AP was calculated and reminded him that he must advise Centrelink if his income or assets changed.[30] If the information in those notices was incorrect, it was Mr Scates’ obligation to notify Centrelink.
[30] Exhibit 1, T38, page 519, Centrelink notice dated 7 September 2009.
Centrelink says it was not informed of the superannuation income stream until May 2013. Mr Scates says he provided the trust account information to Centrelink every year which would have indicated that he was receiving an income stream. There is no record of Centrelink receiving this information every year. However, even if it had, it was still Mr Scates obligation to check the notices of payment to ensure that the information relied upon by Centrelink was accurate.
There is no doubt that Mr Scates believed he had provided all the relevant information to Centrelink and that he was operating under the incorrect assumption that Centrelink would calculate his AP correctly.
There is no contention that Mr Scates received the excess payments in bad faith. It was clear at the hearing that Mr Scates had never intended this to occur and that the Debt has caused great concern and stress for Mr Scates and his wife.
As early as May 2009, Centrelink wrote to Mr Scates and informed him of the income and asset details it had on record. In that letter Centrelink set out that information and told Mr Scates to notify Centrelink within 14 days if any of it was incorrect. Unfortunately this did not occur.
The Debt arose due to Mr Scates’ failure to notify Centrelink that his AP was being calculated incorrectly. The debt owed by Mr Scates was not ‘attributable solely to an administrative error made by the Commonwealth’ for the purposes of section 1237A(1) of the Act.[31]
[31] See Wecker v Secretary, Department of Education Science and Training[2008] FCAFC 108, at [102].
Even if Mr Scates was not aware of a need to notify Centrelink, “Centrelink is not required to advise claimants about their legal rights to any particular social security payment or the rate of payment”.[32]
[32] See Brian Murphy and Secretary, Department of Families, Housing, Community Services and
Indigenous Affairs [2010] AATA 115, at [17]; Ivor Biddlecombe and Secretary, Department of Families,
Housing, Community Services and Indigenous Affairs [2010] AATA 451; Barnard and Secretary, Department of Social Services [2016] AATA 436, at [47]; Scott v Secretary, Department of Social Security [1999] FCA 1774, and on appeal Scott and Another v Secretary, Department of Social Security [2000] FCA 1241
The Debt cannot be waived under section 1237A(1) of the Act.

SHOULD THE DEBT BE WAIVED UNDER SECTION 1237AAD?

There are a few elements to be satisfied under section 1237AAD of the Act before a debt may be waived. First, the debt must not have arisen from the debtor, that is, Mr Scates must not have knowingly made a false statement or a false representation or knowingly failed or omitted to comply with a provision of the Act or the Administration Act. Second, there must be “special circumstances” (other than financial hardship alone) that make it desirable to waive. Third, it must be more appropriate to waive than to write off the debt or part of the debt.
The Act does not define what constitutes “special circumstances”.
However, decisions of the Federal Court make it clear that “special” denotes something different from the usual or ordinary.[33]
[33] Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541, at 545 per
Kiefel J, Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267; [2012] FCA 639, at [51], Boscolo v Secretary, Dept of Social Security [1999] FCA 106; (1999) 90 FCR 531, at [18]; Barker J in Kazmierczak v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] FCA 1084, at [37].
French J (as he then was) said in in Secretary, Department of Social Security v Hales[1997] FCA 1565; (1998) 82 FCR 154, at 162:
The concept of special circumstances is broad. A constellation of factors, including financial circumstances, may fall within it. The express exclusion of financial hardship alone as a special circumstance is an indicator that it would otherwise be included. This gives some measure of the range of circumstances which will qualify as special. But as a matter of grammar and ordinary logic, the exclusion of financial hardship alone as a special circumstance does not mandate its inclusion in the range of matters constituting such circumstances for the purpose of enlivening the Secretary's discretion. ... The evident purpose of s 1237AAD is to enable a flexible response to the wide range of situations which could give rise to hardship or unfairness in the event of a rigid application of a requirement for recovery of debt. It is inappropriate to constrain that flexibility by imposing a narrow or artificial construction upon the words. It may be that there will be few cases in which the Secretary will be satisfied that there are special circumstances in the absence of financial hardship. It may be that there are few cases in which having found special circumstances to exist, the Secretary would exercise the discretion to waive in the absence of financial hardship. But to anticipate the limits of the categories of possible cases by imposing on the language of the section a fetter upon its application which is not mandated by its words, is to erode its useful purpose.
The Administrative Appeals Tribunal has also considered the phrase and held that the interpretation in Beadle and Director-General of Social Security (1984) 6 ALD 1, at [12] (i.e. that the circumstances must be unusual, uncommon or exceptional), applies to the Act.[34]
[34] See Hunnibell and Secretary, Department and Community Services [2004] AATA 992, at [19]; Papps and Secretary, Department of Family and Community Services [2005] AATA 660, at [37]
The Full Federal Court explained in Dranichnikov v Centrelink [2003] FCAFC 133 that whether circumstances are special depends on how the error (or debt) came about; that is, what gave rise to the overpayment. Hill J, with Kiefel and Hely JJ concurring, provided that “Whether those circumstances were or were not special will obviously be a matter for the decision maker when the factual circumstances have been ascertained”.[35]
[35] Dranichnikov v Centrelink [2003] FCAFC 133, at [67]. See also [2003] FCAFC 133, at [79]
At the hearing, Mr Scates contended that the amount of the Debt has caused him and his wife considerable stress. This is understandable, but not uncommon. Mr Scates also mentioned his concern about whether his family would need to shoulder the Debt in the event of his passing before it had been paid off. This is not something that the Tribunal is able to answer. Ms Forsyth informed the Tribunal that the Debt may be waived at that stage but she was unable to confirm. The Tribunal again can understand that worrying about leaving financial burdens on family members would be stressful but again would not be uncommon for other social security recipients who find themselves in Mr Scates’ position.
Mr Scates also raised the issue of his wife’s mental health and the impact the Debt was having on her. After the hearing Mr Scates provided some medical certificates which confirm Mrs McKinnon-Scates condition and her long history of depression. However, Mrs McKinnon-Scates’ mental health was not caused by the Debt having arisen.
The Tribunal finds that no special circumstances exist within the meaning of section 1237AAD to warrant the exercise of the discretion in section 1237AAD to waive the debt.

DECISION

Mr Scates’s appeal fails. The decision under review is affirmed.

I certify that the preceding 60 (sixty) paragraphs are a true copy of the reasons for the decision herein of Member D K Grigg

.............................[sgd]......................................
Associate
Dated: 14 September 2018

Date of hearing:
8 August 2018

Date reserved: 30 August 2018

Applicant:
In person

Advocate for the Respondent: Ms Jasmine Forsyth, Senior Government Lawyer

Respondent: Department of Human Services

Date of hearing:	8 August 2018
Date reserved:	30 August 2018
Applicant:	In person
Advocate for the Respondent:	Ms Jasmine Forsyth, Senior Government Lawyer
Respondent:	Department of Human Services