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

Solomons and Secretary, Department of Social Services (Social services second review) [2020] AATA 2944 (14 August 2020)
Division:GENERAL DIVISION
File Number(s): 2018/7656
Re:Ms Sheila Solomons
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Ms Anna E Burke AO, Member
Date: 14 August 2020
Place:Melbourne

The Tribunal affirms the decision under review.
..........................[sgd]................................
Ms Anna E Burke AO, Member
Catchwords
SOCIAL SECURITY – disability support pension - overpayment – debt due to the Commonwealth – undeclared income received from superannuation - recovery of debt should be written off or waived – debt not attributable solely to error made by Centrelink – whether applicant knowingly made false statements or gave false representation in claims - special circumstances not found – decision under review affirmed
Legislation
Administrative Appeals Tribunal Act 1975
Social Security Act 1991
Social Security (Administration) Act 1999
Cases
Re Anderson and Secretary, Department of Families and Community Services [2002] 69 ALD 494
Re Callaghan and Secretary, Department of Social Security [1996] 45 ALD 435
Groth and Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541
Jazazievska v Secretary, Department of Families and Community Services [2000] FCA 1484
Mirza and Secretary, Department of Families, Community Services and Indigenous Affairs [2007] AATA 1309
Reardon Secretary, Department of Families and Community Services [2002] AATA 33
Ryde v Secretary, Department of Family and Community Services [2005] FCA 866
Secretary, Department of Social Security V Coralie Hales [1998] FCA 219
Secondary Materials
Guide to Social Security Law, Department of Social Services

REASONS FOR DECISION
Ms Anna E Burke AO, Member
14 August 2020
INTRODUCTION

Ms Solomons (the Applicant) sought a second-tier review of the decisions made by the Secretary of the Department of Social Services (the Respondent) that she had a Disability Support Pension (DSP) debt of $36,224.08 for the period from19 October 2010 to 7 June 2017.
On 7 March 2018 the Department of Human Services (Centrelink) raised a debt of $36,224.08 against Ms Solomons on the basis she had been paid at a rate higher than she was entitled to from 19 October 2010 to 7 June 2017. Based on her actual circumstances, she should have been paid $0.00.
The application was heard on 1 June 2020 by telephone. Ms Solomons was self-represented and Mr Cameron Munro, Senior Government Lawyer in the Freedom of Information and Litigation Branch of Services Australia, appeared for the Respondent.
BACKGROUND
Ms Solomons is a 66-year-old former public servant, who has completed tertiary qualifications. She lives on her own, in her own unencumbered home, and last worked in 2004 because of a serious car accident. From this time Ms Solomons received fortnightly Comcare and Commonwealth Superannuation Corporation (CSC) pension payments, until she received a lump sum settlement from Transport Accident Commission (TAC) of $700,000 in June 2017. She continues to receive a fortnightly CSC pension.
On 12 April 2010 Ms Solomons attended a face-to-face job capacity assessment at the Centrelink office in Rowville. On the same day she signed an income and assessment form, which is utilised by Centrelink to calculate a recipient’s entitlement. In the form, Ms Solomons details her Westpac bank account and states she has an Application to pay out pension pending. Therefore, require government assistance in the interim.
On 19 October 2010 Ms Solomons lodged a claim for a health care card. In the application, she describes her circumstances as a self-funded retiree. Her income was part superannuation income plus Comcare payments. In the application form she states:
I have an income but its not sufficient for me to engage the treatments I need to help me from day to day. If I don’t have the treatments I need, <y condition will further deteriorate severely. The pattern of my injury is that my condition is deteriorating.
Services Australia records indicate Ms Solomons lodged a claim for DSP on 19 October 2010. Customer records indicate this form was lodged, but only pages 13 and 14 of the document have been located. Those pages contain Ms Solomons signature dated 14 September 2010, the description of her illness/injuries, and their impact on her ability to work. However, no records of Ms Solomons’ income or assets associated with this application have been located. A medical report signed by Dr Adel Nashed, Ms Solomons’ general practitioner, dated 24 August 2010, was lodged with Services Australia. It details her conditions, treatment received, symptoms and impact on functionality.
On 25 October 2010 Services Australia requested further information from Ms Solomons to assist it with making the right decision about her claim for DSP. It requested her employment separation certificate from her last employer, details of her income stream products, and current proof of all bank account balances held in her name.
On 25 October 2010 Services Australia requested further information from Ms Solomons to correctly assess her eligibility for a low-income health care card, again seeking details of her income.
On 3 November 2010 Services Australia requested further information from Ms Solomons to assist with making the right decision about her claim for DSP. It requested details of income stream products, balances of all bank accounts as at 19 October 2010 (as she had only provided an ATM slip for her ANZ account), and details of leave entitlements she had received in the last 12 months.
On 25 November 2010 Services Australia advised Ms Solomons she had been granted DSP back-dated to her lodgement date of 19 October 2010. Included in this notice was the information that her payment had been based on her annual income of $13,103.26; and that she was required to advise the department of any change in her income within 14 days of the change. Additionally, she was advised to inform the department within 7 days if she received any compensation.
On 4 March 2011 Services Australia issued Ms Solomons with a notice detailing her DSP payment from 11 December 2010 to 4 March 2011. She had received workers compensation payments of $251.82 per week and was advised she was required to inform Centrelink of any changes in her income within 14 days of the change. This included receiving money from a superannuation fund.
Similar letters were sent to Ms Solomons on a three-monthly basis. All the letters advised her of the DSP received, income she was receiving from other sources, and advised her of the requirement to advise Centrelink of any changes in her circumstances within 14 days.
On 24 February 2014 Ms Solomons wrote to Centrelink requesting information about her current benefits, as she was making a claim against TAC for a lump sum payment of compensation as a result of her vehicle accident.
On 6 March 2014 Ms Solomons lodged a Compensation and Damages form with Centrelink, in which she advised that she received $304.99 per week in regular compensation.
On 17 April 2014 Centrelink advised Ms Solomons she owed the Commonwealth a debt of $4,456.16. Ms Solomons had not advised Centrelink of the correct weekly amount of Comcare payments she had been receiving for the period from 31 December 2010 to 14 March 2014.
On 24 July 2015 Ms Solomons contacted Centrelink to request that $80 of her fortnightly DSP payment be paid directly to Red Energy.
On 29 March 2016 Ms Solomons contacted Centrelink to obtain her payment history dating back to 2004.
On 12 August 2016 Centrelink undertook a data match of Ms Solomons’ Commonwealth Superannuation and found she had been receiving $1403.03 a fortnight from her defined benefit fund. Centrelink attempted to confirm this information with both Ms Solomons and Comsuper, but had been unsuccessful, as no response was received. Centrelink then determined to include Ms Solomons’ CSC income in her income assessment for DSP.
On 7 March 2018 Centrelink determined Ms Solomons owed a debt to the Commonwealth of $36,224.08 for the period from 19 October 2010 to 7 June 2017. This was on the basis she had income in excess of the assets test limit to be eligible for the DSP.
On 3 July 2018, a departmental Authorised Review Officer (ARO) reviewed the decision to raise and recover a DSP debt of $36,224.08 stating:
I acknowledge that the debt was cause, in part, by the Department’s action to grant your Disability Support Pension without details of your CSS income stream. For the period 19 October 2010 to 30 November 2010 I have found you unaware of your notifications obligations. As such, I have waived recovery of the portion the debt for the period 19 October 2010 to 30 November 2010, this being $652.30.
Because you did not contact the department to query the incorrect income information including in the letter sent to you after 30 November 2010, I cannot find that this part of the debt was caused solely due to administrative error.
The debt may also be waived if there are special circumstances. The circumstances need to be sufficiently unusual or uncommon is to be term special. I’ve taken your medical conditions into consideration, however, I do not consider that the circumstances are unusual or uncommon.
On 10 December 2018, the Social Security and Child Support Division of this Tribunal (the first tier) (AAT1) affirmed the decision of the ARO, finding that Ms Solomons been overpaid $36,224.08 in DSP for the period from 19 October 2010 to 7 June 2017. This was because her income from her Commonwealth Superannuation Scheme (CSS) had not been included in the income test when determining her eligibility for the DSP. This resulted in her being overpaid and had resulted in a debt to the Commonwealth. The AAT1 concurred with the ARO, that a sole administrative error by Centrelink had resulted in an overpayment to Ms Solomons in the period from 19 October 2010 to 30 November 2010, and therefore waived recovery of $652.30. The member was also unable to find any special circumstances which warranted waiving recovery of the entirety of the debt.
On 28 December 2018 Ms Solomons sought a review of the AAT1 decision by this division of the Tribunal, as she disagreed with the decision made, stating: “The member Andrew Carson. said he was going to request the form required to lodged on October 10^th. He said I could have a copy to peruse as I remember certain things I have written in it. This did not happen.”
THE ISSUES IN CONTENTION
The Tribunal needs to consider the following relevant issues:
(a)whether Ms Solomons was overpaid special benefit;
(b)if so, is the debt recoverable; and if yes
(c)should the debt be waived due to administrative error pursuant to section 1237A of the Social Security Act 1991 ("the Act"); or
(d)whether special circumstances exist, such that the debt should be waived pursuant to section 1237AAD of the Act.
RELEVANT LEGISLATION AND ISSUES
DSP is an income support payment for people who are unable to work due to permanent physical, intellectual or psychiatric impairment. It is granted on the basis of an individual meeting certain requirements, medical and non-medical. As with all social security payments, it is granted on the premise that an individual is unable to support themselves via any other means. The Act provides the mechanism for calculating the rate of pension payable to an individual, taking into consideration their income and assets.
Pursuant to s 55 of the Act, a person who is at least 21 years of age and not permanently blind, will have their rate of DSP calculated using the ‘Pension Rate Calculator A’ at the end of s 1064 of the Act. A person’s income and assets are taken into account in calculating the rate of DSP.
Part 3.10 of the Act sets out general provisions relating to the ordinary income test. Section 1072 provides that a reference 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 with any reduction, subject to an exception that is not relevant in this application. “Ordinary income” is defined in s 8(1) of the Act to mean “income that is not maintenance income or an exempt lump sum”. In turn, “income” is defined in s 8(1) of the Act to include “an income amount earned, derived or received by the person for the person’s own use or benefit”.
Section 1099D of the Act deals specifically with payments received from a defined benefit scheme, in which case the person is taken to have received the annual payment less a deductible amount. “Defined benefit scheme stream” is defined in s 9(1F) of the Act; and includes that the income stream is taken to be a pension for the purposes of the Superannuation Industry (Supervision) Act 1993. The Tribunal is satisfied that the superannuation pension paid to Ms Solomons by ComSuper under the PSS met the definition of a defined benefit scheme stream; that it should have been factored into the calculation of Ms Solomons’ DSP; and that the debt was properly raised. This was not an issue that was in dispute between the parties at the hearing.
Section 68(2)(a) of the Social Security (Administration) Act 1999 (‘Administration Act’) empowers the Secretary to give a notice to a person to whom a social security payment (such as a DSP payment) is being paid, requiring that person to inform the Department (Centrelink) if a specified event or change of circumstances occurs or is likely to occur. Section 72 of the Administration Act requires the notice be given in writing, personally, or by post, or in any other manner approved by the Secretary; specifies how the information is to be given by the person to the Department; and specifies when the information is to be given. Section 72(3)(b) of the Administration Act provides that a person must give the information required to be given under the s 68 notice within 14 days after the day on which the event or change of circumstances occurs; or the day on which the person becomes aware that the event or change of circumstances is likely to occur. )
Section 1223 of the Act outlines how debts arise 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.
Section 1237A(1) of the Act provides grounds for the decision-maker to waive recovery of any part of the debt. The Act provides that the decision-maker must waive a debt if it was attributable solely to an administrative error made by the Commonwealth and the debtor received the payments in good faith.
Section 1236 of the Act allows the decision-maker to write off a debt if: [
(i)the debt is irrecoverable at law; or
(ii)the debtor has no capacity to repay the debt; or
(iii)the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(iv)it is not cost-effective for the Commonwealth to take action to recover the debt.
Section 1237AAD of the Act allows the decision-maker to waive all or part of the debt if they are 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.
THE TRIBUNAL’S CONSIDERATION AND FINDINGS
Evidence before the Tribunal
The evidence before the Tribunal included documents provided by the Respondent pursuant to s 37 of the Administrative Appeals Tribunal Act 1975, referred to as the “T documents”. Ms Solomons provided numerous statements, gambling exclusion forms, and gave oral evidence at the hearing of this matter
Ms Solomons advised the Tribunal that:
·in 2004, following a serious car accident which had left her mentally and physically incapacitated, she had been unable to continue working and received weekly Comcare payments;
·she had previously worked as a Commonwealth public servant, with her last position being with the Social Security Appeals Tribunal (as it then was);
·in 2007, for a period of about six months, she was receiving no form of income and was struggling. Additionally, she advised that at this time she was not able to manage herself well, she was taking a great deal of medication, and was in the grips of a gambling addiction;
·she had applied for a health care card around this time, as she understood she would not be eligible for DSP as well as Comcare. She had believed she would be eligible for the card which would assist her with medical treatments, as she was struggling to make ends meet;
·she was advised she was not eligible for the health care card, but could apply for a disability card, which also required her to make an application for DSP. She claimed that to access the disability card, she was advised she would need minimum DSP payments. As there was no way around it, she filled in the forms at the behest of the Centrelink staff;
·she was adamant that on the form she submitted in respect of her DSP claim, she clearly indicated she was not interested in receiving a payment but was applying for a low-income card to assist with medical expenses. She had provided an estimate of her super payments and Comcare on this form;
·at this time, she was suffering from pain and depression, and was on a great deal of medication. She was unable to cope and had approached a local counselling centre EACH to assist her with numerous forms at this time;
·she was also not getting on well with her ex-husband at this time;
·she had developed a gambling addiction, following a lunch she attended with a friend where seniors received a cheap meal and a voucher to spend on the pokie machines. This had led to her spending hours and hundreds of dollars at pokie venues. This was a very bad time as she was spending more and more time at pokie venues. She eventually received assistance; and subsequently applied for a self-exclusion from various gambling venues on numerous occasions. She is still not over this addiction and she knows she needs people to ask her to remove herself from venues. She recounted how on one occasion her daughter attended and demanded that she leave one of these venues. She reiterated this was a very bad time in her life and she was very ashamed about her gambling;
·she did not recall receiving advice from Centrelink about her DSP payments, or the need to advise of any change in her financial circumstances;
·she was aware she was receiving a small DSP payment into her bank account and believed she was entitled to this small payment, otherwise it would not have been made available to her;
·she had not advised Centrelink of increases in her superannuation payments as they were miniscule and she did not believe this would have impacted her DSP payment. She believed her super fund notified Centrelink twice yearly of payments; and
·she is adamant that the mistake was Centrelink’s and not her own; and she did not believe she was liable for any of the debt. She claimed that the missing DSP claim form lodged on 19 October 2010 would have been favourable to her case and she was put at a significant disadvantage, as Centrelink had not located the entire application form.
Commonwealth Superannuation Corporation records indicate that from 19 October 2010 to 23 June 2017 Ms Solomons had received fortnightly pension payments commencing at $1,279.85 indexed with inflation to $1,427.10. Ms Solomons continues to receive a fortnightly pension form CSC which is approximately $38,000 per annum.

Centrelink records indicate that Ms Solomons was paid DSP totalling $44,750.24 from 19 October 2010 to 7 June 2017. Centrelink records also indicate Ms Solomons had two prior debts raised against her for failure to notify of increases of her Comcare payments. As these debts have been repaid in full and are not part of the matter before the Tribunal, they have reduced the quantum of her debt to $36,224.08.
CONSIDERATION
The Respondent contended that Ms Solomons received more DSP for the period from 19 October 2010 to 7 June 2017 than she was entitled to, as her CSC pension payments were not considered as income when calculating her DSP entitlement. Further, that Ms Solomons had failed to advise Centrelink, from 25 November 2010 (when first notified of her eligibility for DSP), that her CSC had not been included in her income for assessment of her DSP. The Respondent argued that Ms Solomons had failed on numerous occasions over the next seven years to advise Centrelink of any changes in her financial circumstances, particularly increases in her CSC payments.
Ms Solomons contended that she did not owe a debt to the Commonwealth as Centrelink had made the error by granting her the payment without properly assessing her claim. She argued that as she had never applied for the DSP, and only for a low-income health care card to assist with her mounting medical bills. On principal, Ms Solomons did not accept she owed a debt to the Commonwealth and that the debt was solely attributable to Centrelink.
The Tribunal found that Ms Solomon’s had been overpaid her DSP as she had failed to advise Centrelink for a period of seven years that she was in receipt of income from CSC. The Tribunal finds that whilst Ms Solomons claimed to not have applied for the DSP, she had submitted numerous forms seeking benefits from Centerlink and had accepted without question or clarification payment of DSP into her bank account for seven years. At no stage did Ms Solomons advise Centrelink of her actual income in this period regardless of numerous notices advising her of her benefits and the income on which they were calculated. Therefore, the Tribunal finds that Ms Solomon’s owed a debt to the Commonwealth of $36, 224.08 based on the original determination of Centrelink that Ms Solomons had been overpaid DSP, as her income exceeded the income test set out the Act. The Tribunal now explores if any of the debt was attributable to administrative error on the Respondent’s part; or if there were special circumstances to write off or waive all or part of the debt.
Writing-off the debt
The Tribunal, standing in the shoes of the Secretary, has the discretion to write-off the debt under s 1236 of the Act.
The Respondent submitted Ms Solomons’ debt could not be written off under s1236 of the act for the following reasons:
·the debt was not irrecoverable at law;
·Ms Solomons had the capacity to repay the debt;
·recovery of the debt would not cause Ms Solomons severe financial hardship; and
·her whereabouts were known, and it was cost-effective for the Commonwealth to recover the debt
Based upon the evidence before it, the Tribunal finds it is not reasonable to write off the debt under s1236 of the Act as Ms Solomons did not meet the requirements of the Act.
Waiver the debt on the basis of administrative error
Under section 1237A of the Act, the Tribunal has a discretion to waive the right to collect the debt, if it was due solely to administrative error.
The Respondent submitted that the debt had not arisen as a result of administrative error, and consequently section 1237A of the Act was not satisfied. The Respondent argued that the debt had arisen through Ms Solomons’ repeated failure to advise the department of her actual income including her CSC.
Ms Solomons contended that the debt was solely attributable to a department error and should be waived in its entirety. She contended she had advised Centrelink on numerous forms of her various income streams, referring to her income and assessment form lodged on 12 April 2010, and her health care card application lodged on 19 October 2010. Ms Solomons further stated that Centrelink was aware of her income, as she had been advised she was not eligible for the health care card. She believed she was at a clear disadvantage as Centrelink had not produced the actual DSP application form on which the DSP was granted. She remained adamant that it clearly stated on the form that she was not interested in payment, but only the disability card. She further stated that Centrelink had granted her the DSP on 25 November 2010 incorrectly as it did not have full knowledge of her financial situation as evidenced by their letter of 3 November 2010 where no reply had been sent.
The Respondent acknowledged the error of 25 November 2010 in granting Ms Solomons DSP without taking into account her CSS pension under the income test. The Respondent accepts that a portion the debt incurred, in respect of the period from 19 October 2010 to the date Ms Solomons received the notice dated 25 November 2010, is attributable solely to Commonwealth error. And as such contends the amount of $591.64 must be waived under section 1237A of the Act.
However, the Respondent contends that there was no longer an administrative error from 25 November 2010 as Ms Solomons had failed to notify Centrelink at any time in the period from 8 December 2010 to 7 June 2017 that her CSS pension was not being taken into account. This was despite this omission being evident on the face of the many notices issued to her, and her evidence to the Tribunal on 1 June 2020 that she had previously been employed by the Social Security Appeals Tribunal and that she "understood the rules". Ms Solomons had failed, commencing with the increase of 31 December 2010, to notify the Agency of any of the 13 separate increases to her rate of CSS pension. And she had failed to respond to the notice issued to her dated 12 August 2016, which obliged her to make contact "to make sure that you are receiving the correct rate of payment(s)". This would have allowed the Agency to determine whether the information it received from CSS on 12 August 2016 - which suggested that the Ms Solomons may have been in receipt of a CSS pension — was accurate.
Following the hearing Ms Solomons sought to correct a statement made by the Respondent during the hearing and advised the Tribunal of the following:
Mr Munro said that "Ms Solomons would have asked for more money from the settlement if she knew she had a large debt" (or something similar to this).
My settlement with the TAC was that I received a lump sum of $250,000 for pain that I had suffered and would suffer in the future and that the TAC would reimburse and pay any monies owing to Centrelink, Medicare, Comcare, and any other relevant organisation.
When the relevant authorities got in touch with Centrelink in 2017 to settle, Centrelink only brought up a $5000 and $700 debts. No mention was made of a $38,000 debt.
Therefore, Centrelink's failure to bring up the matter of this large debt at the critical time of settlement with relevant authorities has resulted in me being chased for this money.
I want the member to consider that Centrelink should have disclosed all monies they thought was owing at the critical time of settlement. Bringing it up at a later date (a year later 2018) is an Administrate error the consequences of which I feel should not be borne by me.
The Respondent contended in reply to the above that the failures by Ms Solomons were the causes of the delay by the Agency in raising the debt at an earlier time. At the time she entered into the compensation settlement agreement, there was no evidence that the Ms Solomons would have been able to obtain a larger lump sum. In these circumstances, Ms Solomons’ lack of awareness of the debt at the time she agreed to her compensation settlement are not a special circumstance and does not make it desirable to waive her debt.
Based on the evidence, the Tribunal finds that part of the debt did result solely from an administrative error by Centrelink; as it had granted the DSP without ascertaining all of Ms Solomons income streams. As a consequence, a portion of the debt must be waived. The Tribunal concurred with the finding of the ARO that $652.30 of the debt for the period from 19 October 2010 to 30 November 2010 should be waived, as Ms Solomons could not reasonably be expected to realise incorrect information had been utilised in the calculation of her DSP eligibility.
However, the Tribunal finds that after 30 November 2010 Ms Solomons was aware, that she was in receipt of DSP payments, and the income on which Centrelink had calculated her eligibility, and her actual income. For seven years she had failed to advise Centrelink of the CSC income stream, even though she was in regular contact with the agency in respect of numerous issues, particularly around the time of her TAC settlement. The Tribunal did not find Ms Solomons assertions that she was unaware of the income on which Centrelink was basing her eligibility to be plausible. In such circumstances, a portion of the debt must be waived; but the balance of the debt cannot be waived under section 1237A(1) of the Act as it was not attributable solely to administrative error.
The Respondent contended it was open to the Tribunal to find that Ms Solomons did not receive her DSP payments in good faith, as she had signed and lodged a claim for DSP and was required to provide details of income stream but had failed to provide them. Furthermore, she did not make any enquiry with the Agency as to why DSP had been granted to her, despite not having provided this information and being aware she was not entitled to the payment. She had ignored frequent notices sent to her about her rate of DSP and the income she was being assessed on, which clearly did not include her CSS payment.
The Respondent referred the Tribunal to the case of Jazazievska v Secretary Department of Families and Community Services [2000] FCA 1484, in which the Federal Court considered whether a person who ‘turns a blind eye’ could be said to act in good faith. The conclusion of the court was:
[44] A person does not act in good faith when a person turns a blind eye to circumstances which raised doubt as to entitlement of the person to receive and retain payment or refuses to make reasonable enquiries when doubt exists….
The Respondent also referred the Tribunal to the matter of Reardon and Secretary Department of Families and Community Services [2002] AATA 33 where the Tribunal found that a failure to read notices amounted to a lack of good faith.
Ms Solomons contended she had accepted the payment in good faith as she had lodged all information requested by Centrelink and they determined she was eligible for DSP. She insisted that at no stage in the seven years had it been brought to her attention that incorrect income was being used to calculate her DSP.
Regardless of Ms Solomons obvious failure to respond to numerous letters from Centrelink, the Tribunal consider Ms Solomons had received the DSP payment in good faith, accepted she was suffering from depression and a gambling addiction in this period which may have left her unable to deal with administrative tasks.
The Tribunal was concerned by Centrelink’s administrative errors in respect of Ms Solomons DSP application, as the agency had clearly not undertaken the appropriate assessment of Ms Solomons’ income prior to granting her the DSP. This had compounded the situation by its not undertaking data matching to rectify its own failure for 7 years. The Tribunal notes that Ms Solomons can apply under the Scheme for Compensation of Detriment caused by Defective Administration (the CDDA Scheme), which is administered by the Department of Finance, as a form of redress against Centrelink’s errors she claims have led to her debt. Defective administration is defined as:
- a specific and unreasonable lapse in complying with existing administrative procedures; or
- an unreasonable failure to institute appropriate administrative procedures; or
- an unreasonable failure to give to (or for) an applicant, the proper advice that was within the officer's power and knowledge to give (or reasonably capable of being obtained by the officer to give); or
- giving advice to (or for) an applicant that was, in all the circumstances, incorrect or ambiguous.
Applications under the CDDA Scheme are discretionary, they are assessed on their individual merits, and a finding that a mistake has been made by an official does not automatically mean compensation is payable.
Waiver of all or part of the debt in special circumstances
The Tribunal, standing in the shoes of the Secretary, also has the discretion to waive all or part of Ms Solomons’ debt in special circumstances. For the discretion to be exercised, all three conditions contained in subsections (a), (b), and (c) of s 1237AAD must be satisfied.
Knowingly
In order to waive part or all of the debt under this s 1237AAD of the Act, the Tribunal must be satisfied that Ms Solomons did not knowingly make a false representation to Centrelink or fail to comply with the relevant legislative provisions. The term ‘knowingly’ has not been defined in the Act, although it has been considered extensively by the Tribunal in similar circumstances.
In Re Callaghan and Secretary Department of Social Security [1996] 45 ALD 435, Deputy President Forgie said at [445]:
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 that he or she is failing or admitting to comply with a provision of the Act. The 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 of omission.
In Re Anderson and Secretary, Department of Families and Community Services [2002] 69 ALD 494, the Tribunal stated at [496]:
[…] it is open to the Tribunal to infer that the applicant has actual knowledge of his obligations under the act where there are opportunities for that knowledge to be gained when there are no obstacles to him acquiring knowledge. In this case, the applicant has had the opportunity to gain an understanding of his obligations under the Act to the provision of advice letters to him from the respondent. The Tribunal is not aware of any obstacles that would prevent Mr Anderson from understanding those letters and gaining that knowledge.
The Respondent contended Ms Solomons had failed comply with the provisions of the Act as she had failed to correct Centrelink records in respect of her actual income, had failed to advise of increases in her CSC pension, and had failed to respond to the notice of 12 August 2016 to contact the Department to make sure their records were correct..
The Respondent therefore contended that Ms Solomons’ debt could not be waived under s1237AAD of the Act as her debt had risen through her actions of knowingly making repeated admissions of her income to the Department.
Ms Solomons argued she had no knowledge of her obligation to provide information to Centrelink, as she had been completely honest from the start in her various applications about her income streams and it was Centrelink’s error in granting her the DSP.
The Tribunal finds that Ms Solomons’ debts did not arise because she knowingly made false statements or declarations or omissions to Centrelink. The Tribunal finds that Ms Solomons had not deliberately acted dishonestly or with any intention to mislead Centrelink. The Tribunal further finds that Ms Solomons had assumed that Centrelink had granted her the DSP on the basis of her medical and income eligibility, based on the information she had provided about her income from Comcare and CSC payments. And that owing to a combination of factors, Ms Solomons was not paying any care or attention to her administrative responsibilities and assumed as she was receiving the benefit, she was entitled to it.
However, the Tribunal does find that Ms Solomons had received appropriate advice from Centrelink explaining her obligation to provide details of all income based upon the evidence provided by the Respondent that Centrelink had sent and received.
In Anderson and Secretary, Department of Families and Community Services [2002] 69 ALD 494 the Tribunal stated at [496]:
[…] It is open to the Tribunal to infer that the applicant has actual knowledge of his obligations under the act where there are opportunities for that knowledge to be gained when there are no obstacles to him acquiring knowledge. In this case, the applicant has had the opportunity to gain an understanding of his obligations under the Act to the provision of advice letters to him from the Respondent. The Tribunal is not aware of any obstacles that would prevent Mr Anderson from understanding those letters and gaining that knowledge.”
Based on the reasoning in Anderson the Tribunal finds that there was sufficient opportunity for Ms Solomons to gain knowledge of her obligation to declare her income to Centrelink and therefore she would have had some degree of actual knowledge of this obligation.
However, on balance, the Tribunal finds that Ms Solomons was not dishonest in her dealings with Centrelink. Although she did have the opportunity to become aware of her obligations and may be said to have had some knowledge of them, this falls short of a finding that she knowingly made a false statement or failed to comply with the relevant legislation. Paragraph (a) of s 1237AAD is therefore satisfied.
Special circumstances
The expression ‘special circumstances’ has not been defined in the Act. However, the meaning of special circumstances has been considered extensively by the Federal Court and the Tribunal.
In Ryde v Sec Department of Family and Community Services [2005] FCA 886, Branson J said at [26]:
[…] the evident purpose of s 1237AAD is to enable a flexible response to the wide range of circumstances which could give rise to hardship or unfairness, the statutory requirement for special circumstances discloses an intention to proscribe waiver in ordinary cases. The hardship or unfairness to which French J referred must be understood to be hardship or unfairness sufficient to justify departure from the general rule in the particular case.
In Groth v Secretary Department of Social Security [1995] FCA 1708, Kiefel J said at [545]:
[…] for present purposes it is sufficient to observe that it requires something to distinguish Mr Groth’s case from others, to take it out of the usual ordinary case. That was, I consider, the only enquiry to be undertaken in this case. It would of course follow if one to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.
The Respondent contended that given the circumstances of how the debt arose, Ms Solomons’ circumstances were not special, and it was not desirable to waive her debt. That, whilst it accepted she was suffering from numerous health complaints, these were not sufficiently unusual, uncommon or out of the ordinary to be described as special circumstances. The Respondent further contended that the delay in raising the debt was solely attributable to Ms Solomons’ failure to advise Centrelink of her income and her lack of awareness of her debt at the time of settlement with TAC was not special. She was suffering no financial hardship and her gambling addiction, whilst obviously of concern, was not sufficiently unusual, uncommon or out of the ordinary to be described as special circumstances. The Respondent contended it was simply ridiculous for Ms Solomons to claim she was unaware of her obligation to advise Centrelink of her actual income; or that she did not understand Centrelink was basing her payment on about half of the income she was receiving annually.

Ms Solomons maintained she was not coping for much of this time, was depressed, in pain, taking a great deal of medication, in the grips of a gambling addiction and simply could not deal with the administration of life. She had assumed she was entitled to the DSP as it had been granted to her on the information provided, including details of all her income, including her CSC pension. She had never sought the DSP but only the health care card; which she was adamant she had written on her DSP application; and which Centrelink could not produce. She could not comprehend why she owed a debt that Centrelink had created through their failure to follow procedures.
The Tribunal based upon the evidence before it, finds that Ms Solomons’ circumstances as a whole were not sufficiently unusual, uncommon or exceptional so as to make her case different from the ordinary and otherwise special. Therefore, her circumstances did not satisfy s 1237AAD(b) of the Act. Whilst the Tribunal is very sympathetic to Ms Solomons obvious health issues, both physical and mental, these are the very impairments which lead to an individual being found to be eligible to receive the DSP and not out of the ordinary. Again, tragically her gambling addiction is not sufficiently unusual, uncommon or exceptional to warrant waiver of her debt, as sadly many people in her position turn to pokey machines for relief from their overwhelming situation. Additionally, Ms Solomons is not facing any particular financial hardship.
The Tribunal finds it extraordinary that for seven years a highly intelligent woman, with tertiary qualifications, who had worked in the public sector, was unaware of her need to advise Centrelink of any changes in her income. The Tribunal finds it implausible that Ms Solomons was unaware that Centrelink was basing her eligibility on the wrong amount, as it was glaringly obvious that the income on which her DSP payment was being assessed was about half the income she was receiving.
At the hearing the Tribunal noted that Ms Solomons preclusion period from seeking any Centrelink benefits had now ended and encouraged her to ascertain if she was now eligible for any benefits. Additionally, the Tribunal directed that the Agency enter into a reasonable payment plan with Ms Solomons to allow her to repay the debt in a way which will not be detrimental to her financial circumstances.
The Tribunal, having considered all the evidence placed before it, finds that Ms Solomons situation was not unusual, uncommon or exceptional, markedly different from the usual run of cases, special, or out of the ordinary to make it desirable to waive the portion of her debt not attributable to administrative error.
Waiving the debt more appropriate than writing-off the debt
The Tribunal finds that, in all the circumstances, that waiving Ms Solomons’ debt is more appropriate than writing off the debt.
DECISION
The decision under review is affirmed.

I certify that the preceding 82 (eighty-two) paragraphs are a true copy of the written reasons for the decision of Ms Anna Burke, AO Member

..........[sgd]........................
Associate
Dated: 14 August 2020

Date of hearing 1 June 2020

Applicant Self-represented

Advocate for the Respondent

Solicitors for the Respondent

Mr Cameron Munro

Department of Human Services,
Freedom of Information & Litigation Branch

[2020] AATA 2944

14 August 2020

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