Schuh; Secretary, Department of Social Services and (Social services second review)
[2022] AATA 53
•18 January 2022
Schuh; Secretary, Department of Social Services and (Social services second review) [2022] AATA 53 (18 January 2022)
Division:GENERAL DIVISION
File Number: 2020/5818
Re:Secretary, Department of Social Services
APPLICANT
AndMr Robert Schuh
RESPONDENT
DECISION
Tribunal:Senior Member B. Pola
Date: 18 January 2022
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 4 August 2020, and in substitution determines the Applicant has the following legally recoverable debts:
(a)FTB debt of $8,218.60 for the period of 1 July 2014 to 30 June 2015;
(b)FTB debt of $11,908.92 for the period of 1 July 2015 to 30 June 2016;
(c)FTB debt of $9,519.20 for the period of 1 July 2016 to 30 June 2017;
(d)FTB debt of $10,296.65 for the period of 1 July 2017 to 30 June 2018;
(e)FTB debt of $5,003.79 for the period of 1 July 2018 to 30 June 2019;
(f)CCB debt of $644.26 for the period of 1 July 2014 to 30 June 2015; and
(g)CCB debt of $208.79 for the period of 1 July 2015 to 30 June 2016.
...............[SGD]................
Senior Member B. Pola
Catchwords
SOCIAL SECURITY – overpayment of family tax benefit and child care benefit – overpayment debts due to Commonwealth – write-off of debts not appropriate – no waiver as debts not attributable solely to administrative error – no “special circumstances” warranting waiver of debts – decision under review set aside
Legislation
A New Tax System (Family Assistance) (Administration) Act 1999 (Cth)
Electronic Transactions Act 1999 (Cth)Public Governance, Performance and Accountability Act 2013 (Cth)
Cases
Atkinson and Secretary, Department of Social Services [2017] AATA 1963
Beadle and Director-General of Social Security (1984) 6 ALD 1
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, Agency of Social Services [2020] AATA 802
Kornmann and Secretary, Department of Social Services (Social services second review) [2021] AATA 1422
Salsone and Secretary, Department of Family and Community Services [2002] AATA 1117
Secretary, Department of Social Security v Hales (1998) FCA 219
Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190
Stafford and Secretary, Agency of Social Services (Social Services second review) [2018] AATA 2746Waqar and Secretary Department of Social Services (Social Services second review) [2020] AATA 1493
REASONS FOR DECISION
Senior Member B. Pola
18 January 2022
1. On 5 November 2013, the Respondent in this matter, Mr Robert Schuh, lodged a form (dated 1 November 2013) with the Department of Human Services (now known as Services Australia, and herein referred to as the ‘Agency’). This form notified the Agency that he had separated from his former wife on 2 April 2010, that he was divorced from 10 September 2012, and had begun living with a new partner in June 2013[1]. With respect to the care arrangements of the Respondent’s children, he stated that they spent alternate weekends with him and his now wife[2].
[1] Exhibit A1, Section 37 T Documents, T4, page 23.
[2] Ibid, page 31.
2. On 16 December 2013, the Respondent lodged a claim with the Agency for Family Tax Benefit (herein referred to as ‘FTB’), and Child Care Benefit (here in referred to as ‘CCB’). In this claim the Respondent stated his relationship status was divorced and provided two dates: a date of 9 September and 9 October 2012, respectively[3].
[3] Ibid, T5, page 34; T6, page 43.
3. On 16 April 2014, the Respondent lodged a claim with the Agency for FTB in which he identified his relationship status as divorced, as of 9 September 2012[4].
[4] Ibid, T7, page 49.
4. On 30 April 2014, the Respondent (and his fiancé at the time) lodged a form with the Agency stating they were partnered to each other and started living together from 12 June 2013[5].
[5] Ibid, T8, pages 57 to 58; T9, pages 59 to 60.
5. On 20 May 2014, the Respondent lodged a form with the Agency stating he was partnered and had commenced living with his then fiancé from 12 June 2012[6].
[6] Ibid, T10, page 63.
6. The Respondent was in receipt of FTB for the 2014-15 financial year through to the 2018-19 financial year. Additionally, the Respondent was in receipt of CCB for the 2014-15 and 2015-16 financial years, respectively.
7. On 13 December 2018, the Respondent was advised by the Agency that his entitlement to FTB was cancelled from 31 December 2018 on the basis that he no longer had any qualifying dependent children[7].
[7] Ibid, T27, pages 416 to 417.
8. The Tribunal observes that during the period of 10 July 2014 to 6 October 2018, more than 20 notices were sent to the Respondent (in accordance with section 158 of A New Tax System (Family Assistance) (Administration) Act 1999 (Cth)) (herein referred to as the ‘ANTS Administration Act’) from the Agency confirming the combined income used to calculate the Respondent’s entitlement to FTB and CCB, respectively[8].
[8] Ibid, pages 261 to 265; pages 278 to 282; pages 284 to 286; pages 298 to 300;pages 303 to 305;; pages 322 to 324; pages 335 to 340; pages 355 to 357; pages 359 to 361; pages 367 to 369, 376 to 381; pages 384 to 386; pages 393 to 395; pages 399 to 408; pages 411 to 413.
9. On 29 March 2020, the Respondent lodged a claim with the Agency for a Jobseeker Payment which stated that he was married on 14 September 2014[9].
[9] Exhibit A2, Applicant Statement of Facts, Issues and Contentions, page 4, paragraph 3.10.
10. Between 14 April 2020 and 24 June 2020, the Agency raised the following debts against the Respondent, calculated on the basis of his and his wife’s actual combined adjusted taxable income for each financial year, as advised by the Australian Taxation Office (herein referred to as the ‘ATO’):
Financial Year
Source of Debt
Debt raised
2014-15
FTB
$ 8,218.60[10]
2015-16
FTB
$11,908.92[11]
2016-17
FTB
$ 9,519.20[12]
2017-18
FTB
$10,296.65[13]
2018-19
FTB
$ 5,003.79[14]
2014-15
CCB
$ 769.38[15]
2015-16
CCB
$ 206.80[16]
2014-15
Child Care Rebate
$ 596.97[17]
2015-16
Child Care Rebate
$ 155.76[18]
[10] Exhibit A1, Section 37 T Documents, T27, page 476.
[11] Ibid, page 462.
[12] Ibid, page 444.
[13] Ibid, page 447.
[14] Ibid, page 441.
[15] Ibid, page 459.
[16] Ibid, page 470.
[17] Ibid, page 466.
[18] Ibid, page 453.
11. The Respondent requested that the debts raised against him be reviewed, and on 8 July 2020, an Authorised Review Officer (herein referred to as ‘ARO’) affirmed the decisions under review, and:
(a)varied the Respondent’s debt for the 2014-15 CCB to $644.26; and
(b)found the Respondent did not have a Child Care Rebate debt in 2014-15 and 2015-16[19].
[19] Ibid, T28, page 481.
12. The Respondent subsequently applied to the Social Services and Child Support Division (herein referred to as ‘SSCSD’) of the Administrative Appeals Tribunal (herein referred to as ‘Tribunal’) for review of the ARO’s decision. On 4 August 2020, the SSCSD of the Tribunal varied the decisions under review so that recovery was waived by 50% of the balance of the debts, pursuant to section 101 of the ANTS Administration Act[20].
[20] Ibid, T2, pages 4 to 11.
13. On 10 September 2020, the Secretary of the Department of Social Services (the Applicant in this matter) applied to the General Division of the Tribunal for review of the SSCSD decision of 4 August 2020[21].
[21] Ibid, T1, pages 1 to 3.
14. Additional evidence has been filed from the Respondent in this matter, which is detailed in the Exhibit Register, found in Annexure 1 of these reasons.
ISSUES
15. The issues for consideration by this Tribunal are:
(a)Whether the Respondent was overpaid his entitlement to FTB for the 2014-15 financial year, through to and including the 2018-19 financial year, and whether the Respondent was overpaid his entitlement to CCB for the 2014-15 and 2015-16 financial year; and if so:
(i)Whether the FTB debts and CCB debts, as identified for the above financial years, are recoverable; and if so:
(a)Whether the FTB debts and CCB debts should be written off; or
(b)Whether the FTB debts and CCB debts should be waived due to administration error; or
(c)Whether “special circumstances” exist such that the FTB debts and CCB debts should be waived?
RELEVANT LEGISLATIVE PROVISIONS
Family Tax Benefit and Child Care Benefit
16. Part 4, Division 1, section 58 of the ANTS Administration Act prescribes that the rate of FTB is calculated in accordance with the rate calculator found in Schedule 1.
17. FTB is paid in two parts – Part A and Part B. With respect to the Part A payment, Division 2C, Part 5, Schedule 1 of the ANTS Administration Act details the effect of a person and their partners yearly adjusted taxable income on the maximum rate of FTB Part A payment. With respect to the calculation of FTB Part B, Part 4, Schedule 1 of the ANTS Administration Act details the effect of a person and their partners yearly adjusted taxable income on the maximum rate of payment.
18. With respect to CCB, Part 4, Subdivision 4, of the ANTS Administration Act (as it was during the relevant periods of CCB debts), sets out the calculation of a person’s rate of CCB using the rate calculator in Schedule 2. Part 4 of this Schedule details the effect of a person and their partners yearly adjusted taxable income on the person’s rate of CCB payment.
19. Sections 16 and 20 of the ANTS Administration Act enable the Agency to use an estimate of a person's adjusted taxable income to determine their annual FTB entitlement.
20. Section 105 of the ANTS Administration Act enables the Secretary to review a person's rate of entitlement where there is, “sufficient reason”.
Debts
21. Section 71(2) of the ANTS Administration Act provides that if the amount paid to a person by way of assistance is greater than the amount of assistance that should have been paid to that person in accordance with the relevant laws, then the difference between the amount the person received and the correct amount they were entitled to is a debt due to the Commonwealth.
Debt recovery
22. The ANTS Administration Act prescribes that debts may be: (1) written off by the Secretary, pursuant to section 95; (2) waived due to sole administrative error, pursuant to section 97; or (3) waived as a result of special circumstances, pursuant to section 101.
Written off by Secretary
23. Section 95 of the ANTS Administration Act provides:
95 Secretary may write off debt
(1) The Secretary may, on behalf of the Commonwealth, decide to write off a debt for a stated period or otherwise, but only if subsection (2), (4A) or (4B) applies.
Secretary may write off debt if debt irrecoverable or debt will not be repaid etc.
(2) The Secretary may decide to write off a debt under subsection (1) if:
(a) the debt is irrecoverable at law; or
(b) the debtor has no capacity to repay the debt; or
…
(d) it is not cost effective for the Commonwealth to take action to
recover the debt.
(3) For the purposes of paragraph (2)(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
…
(4) For the purposes of paragraph (2)(b), if a debt is recoverable by means of:
(a) deductions under section 84; or
(aa) deductions under section 1231 of the Social Security Act 1991; or
(b) setting off under section 84A family assistance; or
(c) application of an income tax refund under section 87; or
(d) setting off under section 87A against a payment referred to in paragraph 82(2)(a);
the person is taken to have a capacity to repay the debt unless recovery by those means would cause the person severe financial hardship.
Sole administrative error
24. Section 97 of the ANTS Administration Act provides:
97 Waiver of debt arising from error
(1)The Secretary must waive the right to recover the proportion (the administrative error proportion) of a debt that is attributable solely to an administrative error made by the Commonwealth if subsection (2) or (3) applies to that proportion of the debt.
(2)The Secretary must waive the administrative error proportion of a debt if:
(a)the debtor received in good faith the payment or payments that gave rise to the administrative error proportion of the debt; and
(b)the person would suffer severe financial hardship if it were not waived.
(3)The Secretary must waive the administrative error proportion of a debt if:
(a)the payment or payments were made in respect of the debtor’s eligibility for family assistance for a period or event (the eligibility period or event) that occurs in an income year; and
(b)the debt is raised after the end of:
(i) the debtor’s next income year after the one in which the eligibility period or event occurs; or
(ii)the period of 13 weeks starting on the day on which the payment that gave rise to the debt was made;
whichever ends last; and
(c)the debtor received in good faith the payment or payments that gave rise to the administrative error proportion of the debt.
(4)For the purposes of this section, the administrative error proportion of the debt may be 100% of the debt.
Special circumstances
25. Section 101 of the ANTS Administration Act provides:
101 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 the family assistance law; 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
26. Sections 25 and 158 of the ANTS Administration Act require FTB and CCB recipients, respectively, to notify the Agency of changes in circumstances that may affect their eligibility to receive those payments, including changes in combined income.
CONSIDERATION
27. The application was heard in Brisbane on 11 October 2021, with all parties appearing via telephone. The Applicant was represented by Ms Gillian Gherke of Sparke Helmore, and the Respondent was self-represented, with his wife (Mrs Schuh) present to assist him. The Tribunal considered oral submissions made by both the Applicant and the Respondent, along with submitted evidence outlined in the Exhibit Register (refer to Annexure 1).
28. At the conclusion of the hearing, it was evident that the Tribunal required further detail with respect to the evidence before it, and as such, deemed it appropriate for both parties to file written closing submissions. The Tribunal directed that: the Applicant file written closing submissions by 1 November 2021; the Respondent file written closing submissions by 22 November 2021 and the Applicant file a reply (if any) by 13 December 2021. All closing submissions are detailed in the Exhibit Register, in Annexure 1 of these reasons.
Whether the Respondent was overpaid FTB and CCB?
29. The Tribunal observes that the relevant FTB and CCB debts raised against the Applicant were based on information provided by the Australian Taxation Office to the Applicant through the Respondent[22]. The Tribunal observes that Clause 2, Schedule 3 of the ANTS Administration Act, which sets out the income components of an individual’s adjusted taxable income for a particular year, includes the individual’s taxable income for that year. This means an annual reconciliation process occurs whereby the Australian Taxation Office provides the Agency with the individual’s actual adjusted taxable income in order for this to be used to reconcile the individual’s entitlement to FTB and CCB.
[22] Exhibit A4, Applicant Closing Submissions, page 3, paragraph 4.6 to 4.9.
30. The Tribunal refers to the decision of Waqar and Secretary Department of Social Services (Social Services second review)[23], where the Tribunal details this requirement and the use of the Applicant’s information from the Australian Taxation Office when raising such debts[24]:
… A report of combined income for FTB purposes is not a report of combined income for PPP purposes for four significant reasons. The first is that the means test for FTB is applied to the recipient’s income over a year whereas the means test for PPP is applied to the recipient’s income over a specific Centrelink pay fortnight. There may be significant differences between these fortnightly entitlements for PPP and the entitlement of the recipient to FTB based on income averaged over the year. The second is that FTB is paid against an estimate of the recipient’s combined income made either by the department or nominated by the recipient of the payment. At the end of the financial year the Australian Taxation Office provides the department with the recipient’s actual adjusted taxable income and this is used to reconcile the year’s FTB payments. This may result in either a top-up payment or a debt, depending on whether the estimated income was above or below the actual income. Many recipients of FTB provide a low estimate of their combined income to ensure that they receive a payment not a debt at the end of the year when their payments are reconciled. Thirdly, what is included in the income calculation differs. Fourthly, FTB and PPP are paid under different legislation and administered separately. For these reasons an update of information for FTB purposes does not satisfy the income notification obligations for PPP purposes…
[23] [2020] AATA 1493 at [37].
[24] The Tribunal notes that “PPP” in this decision refers to, “parenting payment partnered”.
31. The Tribunal refers to the submissions of the Applicant with respect to the reconciliation process which occurs for an individual’s FTB and CCB received during the financial year[25]:
The reconciliation process involves comparing a person’s FTB and CCB received during the relevant financial year based on their estimated adjusted taxable income, with their actual entitlement based on their actual adjusted taxable income. A person’s actual adjusted taxable income is usually verified by the ATO and Centrelink when a person and/or their partner lodges their income tax return. Once a person and/or their partner lodges an income tax return, the ATO will send this income information to Centrelink. It is only if a person and/or their partner does not lodge an income tax return with the ATO that a person then has to confirm their actual adjusted taxable income with Centrelink. In this case, the Agency has confirmed that the Respondent and his wife’s actual income from the ATO has been used to calculate the debts…
[25] Exhibit A4, Applicant Closing Submissions, page 4, paragraph 4.11.
32. The evidence before the Tribunal indicates that the Agency failed to action the Respondent’s numerous attempts to declare his relationship status, with evidence before the Tribunal indicating attempts made by the Respondent, a point readily conceded by the Applicant[26]:
… The Secretary accepts that there has been administrative error in that the Respondent advised the Agency that he was partnered on 5 November 2013, 30 April 2014 and 20 May 2014, and the Agency failed to take this into account when calculating his rate of FTB and CCB…
[26] Exhibit A2, Applicant Statement of Facts, Issues and Contentions, page 5, paragraph 4.20.
33. The Tribunal observes the Respondent further sought to notify the Agency on 16 April 2014 (a fourth attempt). As a result of the Applicant’s failures to appropriately account for the relationship of the Respondent and his now wife, the adjusted taxable income of the Respondent’s wife was not taken into account when estimating the Respondent’s entitlement to FTB and CCB. In turn, this contributed to the Applicant being overpaid his entitlement to FTB and CCB. This will be further explored by the Tribunal in the later reasons of this decision.
34. In the Respondent’s opening submissions, he stated, “… I’m willing to pay something but I don’t see how I’m wholly 100 per cent responsible. I never received the mail, email, anything…”[27]. In summary, the Respondent’s main contentions relate to: (1) the failure of the Applicant to account for the declaration of his relationship on numerous occasions; and (2) that he did not receive the notices from the Agency advising him of the combined income used to calculate his entitlement to FTB and CCB. The Tribunal will address these contentions of the Respondent with respect to relevant waiver and write-off considerations in the later reasons of this decision.
[27] Transcript (11 October 2021), page 9, lines 1 to 6.
35. The evidence before the Tribunal clearly indicates that for the relevant FTB and CCB debt years, the Applicant’s combined actual adjusted taxable income was greater than the income used to calculate his entitlement to FTB and CCB, which the Tribunal details in the following table:
2014-15 2015-16 2016-17 2017-18 2018-19 Total Respondent’s adjusted taxable income from Australian Taxation Office $35,101.00[28] $46,207.00[29] $30,990.00[30] $45,335.00[31] $42,758.00[32] $200,391.00 Respondent’s wife adjusted taxable income from Australian Taxation Office $51,064.47[33] $57,160.76[34] $66,009.76[35] $72,807.00[36] $75,915.00[37] $322,956.99 Combined actual adjustable taxable income $86,165.47 $103,367.76 $96,999.76 $118,142.00 $118,673.00 $523,347.99 Entitlement to FTB[38] $12,116.50 $2,866.84 $762.85 - - $15,746.19 Amount of FTB received[39] $20,335.10 $14,775.76 $10,282.05 $10,296.65 $5,003.79 $60,693.35 FTB overpayment $8,218.60[40] $11,908.92[41] $9,519.20[42] $10,296.65[43] $5,003.79[44] $44,947.16 Entitlement to CCB[45] $945.75 $212.29 - - - $1,158.04 Amount of CCB received[46] $1,590.01 $421.08 - - - $2,011.09 CCB overpayment $644.26[47] $208.79[48] - - - $853.05 [28] Exhibit A4, Applicant Closing Submissions – Attachment B, page 1.
[29] Ibid, page 1.
[30] Ibid, page 2.
[31] Ibid.
[32] Ibid, page 3.
[33] Ibid, page 1.
[34] Ibid.
[35] Ibid, page 2.
[36] Ibid.
[37] Ibid, page 3.
[38] Exhibit R1, Section 37 T Documents, T21, pages 485 to 486.
[39] Ibid.
[40] Ibid, T14, page 139.
[41] Ibid, page 136.
[42] Ibid, page 148.
[43] Ibid, page 145.
[44] Ibid, page 151.
[45] Ibid, T21, pages 485 to 486.
[46] Ibid.
[47] Ibid, T14, page 142.
[48] Ibid, page 154.
36. The Tribunal is satisfied the Respondent was receiving a greater amount of FTB and CCB than he was otherwise entitled to, as the combined annual income of the Respondent and his wife was significantly less than their combined actual income during the relevant financial years. The Tribunal is satisfied the Respondent was overpaid the following amounts of FTB and CCB in the following financial years:
(a) Overpayment of FTB in 2014-15 of $8,218.60;
(b) Overpayment of FTB in 2015-16 of $11,908.92;
(c) Overpayment of FTB in 2016-17 of $9,519.20;
(d) Overpayment of FTB in 2017-18 of $10,296.65;
(e) Overpayment of FTB in 2018-19 of $5,003.79;
(f) Overpayment of CCB in 2014-15 of $644.26; and
(g) Overpayment of CCB in 2015-16 of $208.79.
Whether the overpayment of FTB and CCB constitutes a debt to the Commonwealth?
37. As outlined in earlier reasons, section 71(2) of the ANTS Administration Act provides that if an amount paid to a person by way of assistance is greater than the amount of assistance that should have been paid to that person in accordance with the relevant laws, then the difference between the amount the person received and the correct amount they were entitled to is a debt due to the Commonwealth.
38. In the present matter, the Tribunal has found the Respondent received a greater amount of FTB and CCB than they were otherwise entitled to receive during each of the relevant debt years. The Tribunal therefore finds the overpayment of FTB and CCB to the Respondent, based on the incorrect combined adjusted taxable income of the Respondent and his wife, constitutes a legally recoverable debt pursuant to section 71(2) of the ANTS Administration Act, for the following amounts:
(a)FTB debt in 2014-15 of $8,218.60;
(b)FTB debt in 2015-16 of $11,908.92;
(c)FTB debt in 2016-17 of $9,519.20;
(d)FTB debt in 2017-18 of $10,296.65;
(e)FTB debt in 2018-19 of $5,003.79;
(f)CCB debt in 2014-15 of $644.26; and
(g)CCB debt in 2015-16 of $208.79.
Whether any debt owed to the Commonwealth is recoverable in part or in full?
39. In earlier reasons, the Tribunal outlined relevant legislative provisions with respect to whether debts, pursuant to the ANTS Administration Act, may be: (1) written off by the Secretary, pursuant to section 95; (2) waived due to sole administrative error, pursuant to section 97; or (3) waived as a result of special circumstances, pursuant to section 101.
40. With respect to these considerations, the Tribunal refers to relevant authority in Secretary, Department of Social Security v Hales[49], where His Honour French J (as his Honour then was) 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...
[49] (1998) FCA 219 at [1].
Whether the Secretary may write-off of the debt in part or full?
41. In earlier reasons the Tribunal outlined relevant provisions with respect to whether or not the Secretary may, on behalf of the Commonwealth, decide to write-off a debt for a stated period or otherwise, with respect to section 95 of the ANTS Administration Act. This provision provides 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.
42. With respect to the evidence before the Tribunal, the Tribunal is satisfied the debt is recoverable at law as there is no evidence to suggest the Respondent satisfies any of the criteria, pursuant to section 95(3) of the ANTS Administration Act.
43. With respect to whether the Respondent has the capacity to repay the debt, in closing submissions to the Tribunal, he provided updated financial information which indicates that whilst his modest personal finances require careful management[50], the Tribunal is not satisfied based on the evidence that he is in severe financial hardship. The Tribunal refers to the decision of Feneley and Secretary, Department of Family and Community Services[51], with respect to this consideration, 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…
[50] Exhibit R3, Respondent Written Submissions.
[51] [2003] AATA 496 at [36].
44. The Tribunal is satisfied the Respondent meets the requirements of section 95(4) of the ANTS Administration Act, and notes that it is open to the Respondent and his wife to negotiate the amount of repayment with the Agency as their financial circumstances change. The Tribunal is satisfied the Respondent has the capacity to repay the debt, and that recovery by means available to the Respondent would not impose severe financial hardship. Further, with respect to the remaining considerations within section 95 of the ANTS Administration Act, the Tribunal is satisfied the Respondent’s whereabouts are known and he is contactable. The Tribunal is also satisfied that it is cost effective for the Commonwealth to take action to recover the debt.
45. Consequently, the Tribunal finds that the Applicant’s debt to the Commonwealth cannot be written off pursuant to section 95 of the ANTS Administration Act.
Whether the debt can be waived in part or full because of sole administrative error?
46. As outlined in earlier reasons, section 97 of the ANTS Administration Act provides that the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error. In applying this provision to the present matter, the Tribunal refers to the relevant authority in Sekhon v Secretary, Department of Family and Community Services[52], 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]
[52] [2003] FCAFC 190 at [35].
47. In earlier reasons, the Tribunal observed the Applicant’s concession with respect to the Agency’s failure to take into account the Respondent’s numerous attempts to disclose that he was partnered, for the purposes of receiving FTB and CCB. The Tribunal views the failure of the Agency to take this information into account as an administrative error, however for the purposes of section 97(1) of the ANTS Administration Act, this administrative error is not the sole reason for the Applicant’s FTB and CCB debts.
48. The Tribunal has before it numerous notices from the Applicant to the Respondent, notifying him of the income used to calculate his entitlement during the relevant debt periods for FTB and CCB[53]. The Tribunal observes these notices advised the Respondent (amongst other things) to inform the Agency of any changes to his or his wife’s income.
[53] Exhibit A1, Section 37 T Documents, T27, pages 261 to 265; pages 278 to 282; pages 284 to 286; pages 298 to 300; pages 303 to 305; pages 322 to 324; pages 335 to 340; pages 355 to 357; pages 359 to 361; pages 367 to 369, 376 to 381; pages 384 to 386; pages 393 to 395; pages 399 to 408; pages 411 to 413.
49. However, during the course of the hearing, the Respondent contended to the Tribunal that he did not receive these notices from the Agency which advised him of the income that had been used in order to calculate his entitlement to FTB and CCB, as he did not have access to them online through his myGov account[54].
[54] Transcript (11 October), page 10, lines 33 to 44.
50. With respect to the Respondent’s contention above, the Applicant has provided detailed information with respect to the Applicant’s claims regarding his inability to access his myGov records. Evidence before the Tribunal indicates the Respondent accessed his myGov records soon after each notice had been sent to him, with the Applicant providing a date of the correspondence, and the date and time the correspondence was accessed by the Respondent[55].
[55] Exhibit A1, Section 37 T Documents, T31, pages 494 to 495.
51. The Respondent further contended in submissions to the Tribunal that he did not consent to his correspondence being sent electronically through his myGov inbox[56]. With respect to this, the Tribunal is satisfied that the terms of use regarding the establishment of a myGov account contained an agreement regarding the delivery of mail, which the Respondent accepted when establishing his myGov account.
[56] Exhibit R3, Respondent Written Submissions, pages 1 to 2.
52. As an aside, the Tribunal observes that section 14A(1) of the Electronic Transactions Act 1999 (Cth), stipulates that recipients of electronic communication are deemed to have received notices when the communication is capable of being retrieved by the addressee at an electronic address designated by the addressee.
53. The Tribunal is of the view the Respondent’s contentions with respect to receipt of correspondence through his myGov account are significantly diminished when corroborative evidence before the Tribunal confirms the Respondent accessed his records soon after correspondence had been sent to him via his myGov account[57]. The Tribunal affords the Respondent’s contentions in this regard little weight, and refers to similar findings in Kornmann and Secretary, Department of Social Services (Social services second review)[58], where the Tribunal held:
… I consider that it is a reasonable summary of the facts to say that Mr Kornmann was an infrequent user of electronic services and communications. It is also unfortunate to observe that the underpayment of carer payment appears to have resulted from the unnecessary carry forward of out-of-date information about Mr Kornmann’s income.
At the same time, it is necessary to acknowledge that Mr Kornmann engaged with the government online, and that this had certain legal and administrative consequences. I am not in a position to challenge the facts as to the acceptance of terms and conditions that had the effect of making Mr Kornmann’s engagement with the agency almost exclusively digital.
The effect of his actions, and the law as I have summarised it above, is that Mr Kornmann must be understood to have consented to receiving communications electronically. Mr Kornmann did not identify the error contained in the calculation of his carer payment because of his failure to read electronic communications.
I note that the different elements of s 9 of the ET Act are cumulative and that s 9(1)(a) requires that it must be reasonable to expect that the information in question would be readily accessible. Specific submissions were not made on this point, but I accept from the totality of the evidence that this requirement is met in this case. I say this because Mr Kornmann established a myGov account and engaged at times with Centrelink online, for example when updating income information…
[57] Exhibit A1, Section 37 T Documents, T31, pages 494 to 495.
[58] [2021] AATA 1422 at [16] to [19].
54. Further, the Tribunal observes that on numerous occasions decision makers have not accepted a waiver of debt on the basis of sole administrative error where a person has failed to comply with reporting requirements to the Agency when notices have been sent to them[59].
[59] See GGGD and Secretary, Agency of Social Services [2020] AATA 802 at [79] to [81]; Stafford and Secretary, Agency of Social Services (Social Services second review) [2018] AATA 2746 at [78].
55. In consideration of the reasons outlined above, the Tribunal is not satisfied the Respondent’s FTB and CCB debts can be waived on the basis of sole administrative error, pursuant to section 97(1) of the ANTS Administration Act, in circumstances where the Respondent had an obligation to notify the Applicant of changes in his and his wife’s circumstances; most critically, their correct adjusted taxable income during the relevant FTB and CCB debt periods.
56. As the Tribunal has found that sole administrative error has not been established, pursuant to section 97(1) of the ANTS Administration Act, there is no need to consider the remaining considerations, as these are contingent upon a finding of sole administrative error.
57. For completeness, the Tribunal observes that in circumstances where sole administrative error had been established, the Tribunal repeats its earlier findings with respect to whether repayment of the debts would cause the Respondent severe financial hardship. The Tribunal reiterates earlier findings that recovery of the relevant debts, in the Tribunal’s view, would not impose severe financial hardship.
Whether the debt can be waived in part or full due to special circumstances?
58. As outlined in earlier reasons, section 101 of the ANTS Administration Act provides that the Secretary may waive the right to recover all or part of a debt, if the Secretary is satisfied:
(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 the family assistance law; 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.
59. Section 101(a) of the ANTS Administration 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 having knowingly failed to omit or comply with a provision of the relevant legislation.
60. With respect to applying section 101(a) of the ANTS Administration Act, and the use of the term “knowingly” in the circumstances of this application, the Tribunal refers to Callaghan and Secretary, Department of Social Security[60] (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.
[60] (1996) 45 ALD 435 at [48].
61. In the present application, the Tribunal has made detailed findings with respect to the Respondent’s access to notices from the Agency, regarding the income used (both that of the Respondent and his wife) to calculate his entitlement to FTB and CCB, and the obligation on the Respondent to update the Agency to changes in income either for himself and/or his wife.
62. The Tribunal finds that the Respondent 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 101(a) of the ANTS Administration Act.
63. The Tribunal observes that in the decision of Callaghan, the Tribunal made a distinction between knowingly failing to declare income and fraudulently omitting income stating that, “… knowingly omitting them is something different from fraudulently omitting them and I draw the distinction in this case…”[61]. The Tribunal makes the same distinction in the present application with respect to the Respondent’s failure to declare his and his wife’s income to the Agency.
[61] (1996) 45 ALD 435 at [50].
64. Although the Tribunal has found the Respondent did not satisfy section 101(a)(i) of the ANTS Administration Act, for completeness (given issues raised with respect to concessions by the Applicant regarding the Applicant’s attempts to inform the Agency of his relationship status) the Tribunal will go on to consider whether special circumstances made it desirable to waive the Respondent’s debts.
65. With respect to the consideration of “special circumstances”, the Tribunal observes this term is not defined in the relevant legislation, however the Tribunal refers to relevant authorities to ascertain its meaning. In Beadle and Director-General of Social Security[62], 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]
[62] (1984) 6 ALD 1 at [12].
66. The Tribunal also refers to Davy and Secretary Department of Employment and Workplace Relations[63], where the Tribunal observed:
…“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.
[Tribunal underline for emphasis]
[63] [2007] AATA 1114 at [80].
67. The Tribunal has considered the concessions of the Applicant with respect to the Agency’s failure to correctly action the Respondent’s numerous attempts to appropriately declare his relationship status to the Agency (on 5 November 2013, 30 April 2014 and 20 May 2014) and the administrative error resulting from this (which the Applicant conceded contributed to the miscalculation of the Respondent’s rate of FTB and CCB). The Tribunal refers[64]:
… The Secretary acknowledges that there is an element of administrative error in that the Respondent advised the Agency that he was partnered on 5 November 2013, 30 April 2014 and 20 May 2014, and the Agency failed to take this into account when calculating his rate of FTB and CCB…
[64] Exhibit A2, Applicant Statement of Facts, Issues and Contentions, page 16, paragraph 4.61.
68. Upon careful consideration of the requirements of section 101 of the ANTS Administration Act, the Tribunal is not satisfied that administrative error, separate to the earlier consideration of sole administrative error (with respect to the application of section 97(1) of the ANTS Administration Act), gives rise to special circumstances, pursuant to section 101(b) of the ANTS Administration Act.
69. The Tribunal has had regard to numerous authorities which have previously considered an administrative error in the context of applying special circumstances, where it has been found that for administrative error to constitute special circumstances, there must be something in the administrative error which will involve unfairness or hardship to the recipient if repayment is required[65].
[65] Atkinson and Secretary, Department of Social Services [2017] AATA 1963 at [95].
70. The Tribunal refers to the decision of Salsone and Secretary, Department of Family and Community Services[66] (herein referred to as ‘Salsone’), where the Tribunal considered legislative provisions regarding sole administrative error and provisions relating to special circumstances where administrative error had been established:
… Section 1237A of the Act appears to cover the field as regards the prospects for waiver in respect of administrative error. If waiver is not available under that provision then there is a strong presumption that s 1237AAD should not be invoked to circumvent s 1237A…
[66] [2002] AATA 1117 at [31].
71. The Tribunal agrees with the approach in Salsone. In the present matter, the Tribunal has found the Respondent failed to comply with his obligations to notify the Applicant of changes to his and his wife’s income during the relevant FTB and CCB debt years. It is this key finding, in the Tribunal’s view, which does not make it desirable to waive the Respondent’s debt, pursuant to section 101(b) of the ANTS Administration Act. This is because of the integral part the reporting of income by the recipient plays in the general administration of the social security system (with reference to the earlier authority in Davey).
72. Relevant to the present matter, sections 25 and 158 of the ANTS Administration Act require FTB and CCB recipients respectively, to notify the Agency of changes in circumstances that may affect their eligibility to receive those payments. The Tribunal is of the view that it would not be appropriate to waive the Respondent’s debt on the basis of special circumstances, pursuant to section 101(b) of the ANTS Administration Act, where corroborative evidence exists that the Respondent failed to act on notices from the Agency which, in evidence before the Tribunal submitted by the Applicant, confirmed that the Respondent had received them[67].
[67] Exhibit A1, Section 37 T Documents, T31, pages 494 to 495.
73. That said, the Tribunal does have sympathy for the Respondent’s position. The Respondent made numerous attempts to declare his relationship status, and had that been acted upon by the Agency, it is likely that the FTB and CCB debts of the Respondent would not have been as large as what they are now in circumstances where:
(a)The total actual adjustable taxable income of the Respondent’s wife during the 2014-15 to 2018-19 financial years was $322,956[68]; and
(b)The total estimated adjustable taxable income used to calculate the FTB and CCB debts from 2014-15 to 2018-19 was $31,708 less than the total actual income of the Respondent during the period[69].
[68] Exhibit A4, Applicant Closing Submission – Attachment B, pages 1 to 3.
[69] Ibid; Ibid, pages 2 to 3, paragraph 4.5.
74. The Tribunal observes that it is open to the Respondent, should they continue to feel aggrieved, to consider applying to the Scheme for Compensation for Detriment caused by Defective Administration (or the ‘CDDA Scheme’), established under the Public Governance, Performance and Accountability Act 2013 (Cth). The Tribunal qualifies this observation on the basis that the Tribunal has no jurisdiction to make such an award under the CDDA Scheme, and the Tribunal makes no findings in these reasons as to the Respondent’s prospects of success if any application for such relief were to be made.
75. The Tribunal has found the Respondent did not satisfy sections 101(a) or (b) of the ANTS Administration Act. As the Respondent must satisfy all limbs within this provision of the Act in order for waiver in special circumstances to be applied, it is not necessary for the Tribunal to consider the remaining limbs.
76. 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 101(c) of the ANTS Administration Act, or that in the circumstances, it is more appropriate to waive than to write off the Respondent’s debts, or part of the Respondent’s debts.
DECISION
77. 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 4 August 2020, and in substitution determines the Applicant has the following legally recoverable debts:
(a)FTB debt of $8,218.60 for the period of 1 July 2014 to 30 June 2015;
(b)FTB debt of $11,908.92 for the period of 1 July 2015 to 30 June 2016;
(c)FTB debt of $9,519.20 for the period of 1 July 2016 to 30 June 2017;
(d)FTB debt of $10,296.65 for the period of 1 July 2017 to 30 June 2018;
(e)FTB debt of $5,003.79 for the period of 1 July 2018 to 30 June 2019;
(f)CCB debt of $644.26 for the period of 1 July 2014 to 30 June 2015; and
(g)CCB debt of $208.79 for the period of 1 July 2015 to 30 June 2016.
I certify that the preceding 77 (seventy-seven) paragraphs are a true copy of the reasons for the decision herein of Senior Member B. Pola
…………..[SGD]..………………
Associate
18 January 2022
Date of hearing: 11 October 2021
Applicant: Mr Robert Schuh
(Self-represented, by telephone)
Solicitors for Respondent: Ms Gillian Gerhke
Sparke Helmore
Annexure 1 – Exhibit Register
| Exhibit Number | Description of Exhibit | Party | Date of Document | Date of Receipt |
| A1 | Section 37 T Documents (pages 1 to 495) | A | 22 October 2020 | 15 September 2020 |
| A2 | Applicant Statement of Facts, Issues and Contentions (pages 1 to 18) Attachments A – E (pages 1 to 128) | A | 2 June 2021 | 2 June 2021 |
| A3 | Email from Applicant confirming debt amounts (pages 1 to 2) | A | 12 March 2021 | 12 March 2021 |
| A4 | Applicant Closing Submission | A | 02 November 2021 | 02 November 2021 |
| A5 | Applicant Closing Submission in Reply | A | 13 December 2021 | 13 December 2021 |
| R1 | Respondent Email to Tribunal (pages 1 to 2) Respondent Submission – Written Letter to Tribunal (pages 1 to 4) List of My Gov Messages (pages 1 to 107) | R | 15 February 2021 | 09 March 2021 |
| R2 | Respondent Written Submission (email) (pages 1 to 3) | R | 14 March 2021 | 14 March 2021 |
| R3 | Respondent Further Written Submission | R | Undated | 06 October 2021 |
| R4 | Respondent Closing Submission | R | 22 November 2021 | 22 November 2021 |
| T1 | Tribunal Direction | T | 21 April 2021 | – |
| T2 | Tribunal Stay Order | T | 10 August 2021 | – |
3
9
0