Swinbourne and Secretary, Department of Family and Community Services

[2004] AATA 559

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 559

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2003/1030

GENERAL ADMINISTRATIVE DIVISION		)
Re		DONNA SWINBOURNE

Applicant

And SECRETARY, DEPARTMENT
OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Mr R G Kenny, Member

Date2 June 2004  

PlaceBrisbane

Decision The Tribunal affirms the decision under review.  

...................[Sgd]......................

RG Kenny
  Member

CATCHWORDS

SOCIAL SECURITY – benefits and entitlements - overpayment - family tax benefit and child care benefit – debts due to Commonwealth – no special circumstances for waiver of debt

A New Tax System (Family Assistance) Act 1999

A New Tax System (Family Assistance) (Administration) Act 1999 ss 71, 71C, 97 and 101

Beadle v Director-General of Social Security (1985) 7 ALD 670
Secretary, Department of Social Security v Hales [1998] FCR 162
Re Beadle and Director-General of Social Security (1984) 1 AAR 362
Groth v Secretary, Department of Social Security (1995) 40 ALD 541

REASONS FOR DECISION

2 June 2004   Mr R G Kenny, Member     

Application

1.      On 19 July 2003, a delegate of Centrelink on behalf of the Secretary, Department of Family and Community Services (the respondent) determined that Donna Swinbourne (the applicant) had been overpaid the amount of $5,715.21 by way of family tax benefit for the 2001/2002 tax year.  On 7 August 2003, a delegate of the respondent determined that the applicant had been overpaid an amount of $6,435.58 by way of child care benefit for that same period.  Those income support payments had been made to the applicant in accordance with the terms of the A New Tax System (Family Assistance) Act 1999 (the Act) and the overpayments were raised in accordance with provisions of the A New Tax System (Family Assistance) (Administration) Act 1999 (the Administration Act).

2.      On 11 August 2003, an authorised review officer affirmed the overpayment decisions.  The decisions were then affirmed by the Social Security Appeals Tribunal on 5 November 2003 and, on 11 December 2003, the applicant sought review of those decisions by the Administrative Appeal Tribunal (the Tribunal). 

3.      The applicant did not attend the hearing but spoke to the Tribunal by telephone.  She was not represented.  The respondent was represented by Mr S Letch.

4.      In evidence were the following:

Exhibit 1Documents prepared in accordance with section 37 of the Administrative Appeals Tribunal Act 1975 (the T documents) (T1-T13); and

Exhibit 2A statement (with attachments), dated 6 April 2004, completed by the applicant.

Issues and Legislation

5.      The facts in this matter are not disputed.  The applicant has conceded that she was paid family tax benefit and child care benefit during the 2001/2002 financial year and that the payments were made to her on the basis of estimates that she made of the combined income of herself and her husband.  She conceded that these estimates were, from the beginning of that financial year, $40,000; from 30 January 2002, $70,500; and from 8 May 2002, $124,000.  She also conceded that the net combined income for herself and her husband during that period was $124,198.  Further, the applicant conceded that she had been overpaid family tax benefit in the sum of $5,715.21 and child care benefit in the sum of $6,435.58 as alleged by the respondent, during the 2001/2002 tax year.  The applicant also conceded that these were debts due by her to the Commonwealth.

6. The issue for the Tribunal is whether or not the amounts noted above may be waived in accordance with the provisions of the Administration Act. Overpayment of family tax benefit and child care benefit constitute debts to the Commonwealth in accordance with the terms of sections 71 and 71C of the Administration Act, respectively. Those provisions read:

“71 Debts arising in respect of family assistance other than child care benefit and family tax benefit advance

(1)  If:

(a)   an amount has been paid to a person by way of family tax benefit, maternity allowance or maternity immunisation allowance (the assistance ) in respect of a period or event; and

(b)   the person was not entitled to the assistance in respect of that period or event;

the amount so paid is a debt due to the Commonwealth by the person.

(2)  If:

(a)   an amount (the received amount) has been paid to a person by way of assistance; and

(b)   the received amount is greater than the amount (the correct amount) of assistance that should have been paid to the person under the family assistance law;

the difference between the received amount and the correct amount is a debt due to the Commonwealth by the person.

…

71C  Debts arising in respect of child care benefit where overpayment

If:

(a)   an amount (the received amount) has been paid to a person by way of child care benefit in respect of a period; and

(b)   the received amount is greater than the amount (the correct amount) of benefit that should have been paid to the person under the family assistance law in respect of that period;

the difference between the received amount and the correct amount is, subject to section 71F, a debt due to the Commonwealth by the person.”

7. Provision is made in the Administration Act for waiver of the debt and the relevant provisions read:

“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.

…

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.”

Applicant’s Evidence

8.      The applicant said that the estimates of income she made did not reflect the actual earnings of herself and her husband over the whole tax year but were made on the basis of the information she had at her disposal at the relevant times.  She said her husband was a qualified tug master who obtained employment in the latter part of the 2001/2002 tax year with North Queensland Marine Towage on a casual basis.  She said that he had not been employed in the early part of the year and that the estimates she provided to Centrelink reflected her own potential earnings for the period and, subsequently, those of her husband as well. 

9.      The applicant outlined her financial circumstances to the Tribunal.  She said that she and her husband had purchased a house which was valued currently at approximately $270,000 and which was subject to both a fixed and a variable mortgage in the combined amount of $229,000. She said that she had accumulated debts on her credit card in the amount of $20,000 and had also utilised an overdraft facility in the amount of $5,000. She said that she had other outstanding debts including those relating to the use of utilities such as the telephone and electricity.  She also said that she had an outstanding debt of more than $400 to a child care centre but she said that she no longer utilises child care facilities for her children aged five years and four years, respectively.  She said that the older of her two children was attending school and that her younger child stayed at home during the day.  The applicant said she was able to mind the children herself as she was not currently in employment because she suffered from a depressive condition which prevented her from working.

10.     The applicant said that she had been suffering from her depressive illness since November 2003 and had, initially, been on sick leave from her work but now was on leave without pay because she had used all of the sick leave available to her.  She said that she had made application for her condition to be covered by WorkCover but that, in that regard, she had been unsuccessful.  She said that her husband was able to gain periodic casual employment as a tug master and that he had worked in the week prior to the Tribunal hearing but that, in the four weeks prior to that, he had not obtained any employment.  She said that she and her husband had virtually exhausted all of their available funds and were heavily in debt and that the only source of income was payments from Centrelink in the form of parenting payment, which she received only when her husband was not working, and family tax benefit in the amount of $84 per fortnight.  In relation to that last amount, she said that this was the net amount after Centrelink deducted $40 per fortnight for the recovery of the debts. 

11.     The applicant said that she was uncertain how long it would be before she was able to return to employment and that future employment opportunities for her husband were equally uncertain. 

12.     The applicant said that her husband did not suffer from health difficulties and that there were no other factors she considered pertinent to the issue of whether the debts should be waived.

Respondent’s Submission

13. Mr Letch submitted that the debts had been properly raised in this case and that the only prospective basis that been suggested for waiver of the debt was the applicant’s financial position. Whilst conceding she was in financial hardship, he submitted that this, alone, was not sufficient to justify waiver under the provisions of the Administration Act. He also submitted that the debts had not arisen through administrative error on the part of the Commonwealth and that, further, there was a capacity for the applicant to repay the debt through the withholding of her payments of family tax benefit and that, therefore, there was no basis upon which the debts could be written off.

Consideration

14. The applicant has conceded she was overpaid the amount of $5,715.21 in family tax benefits payments and $6,435.58 in child care benefit payments. Having considered the material in Exhibit 1, relating to the calculation of her entitlements to income support payments in the 2001/2002 tax year, I am satisfied that the applicant’s concessions were properly made and that, pursuant to sections 71 and 71C of the Administration Act, respectively, those amounts constitute debts owed by her to the Commonwealth.

15. The waiver provisions are set out above. Section 97 of the Administration Act is applicable where the debt or a portion of it arose through administrative error made by the Commonwealth. I am satisfied that this provision is not applicable in this case.

16. Debts may also be waived in accordance with section 101 of the Administration Act. For that provision to apply, the debt must not have arisen through the making of a false statement or a false representation by the applicant or by any failure to comply with a provision of family assistance law. I am satisfied that, in this case, the estimates given by the applicant were made to the best of the knowledge that she had at the time and that, whilst the first two estimates were found, ultimately, to be significantly less than the actual earnings of herself and her husband, this was not done knowingly by her. Further, she did not fail or omit to comply with any provision of the family assistance law. However, in order for a debt to be waived under section 101 of the Administration Act, there must also be special circumstances, other than financial hardship alone, that make it desirable to waive the debt or part of it and, further, it must be more appropriate to waive the debt rather than to write it off. I am satisfied that, because the applicant is in receipt of family tax benefit, there is the prospect of her making repayments to the respondent, albeit in relatively small amounts and that, therefore, it is not appropriate to write off the debt in this case. A favourable decision to the applicant therefore turns on whether there are special circumstances, other than financial hardship alone, that make it desirable to waive the debt.

17.    The concept of special circumstances has been the subject of consideration in a range of legislative provisions relating to social security law: see Beadle v Director-General of Social Security (1985) 60 ALR 225 and Secretary, Department of Social Security v Hales [1998] FCR 162 in the context of the Social Security Act 1991.  In the latter case, French J referred to the purpose of the waiver provision in that Act as being:

“To enable a flexible response to the wide range of situations which could give rise to hardship or unfairness in the event of a rigid application of a requirement for recovery of debt.  It is inappropriate to constrain that flexibility by imposing an narrow or artificial construction upon the words.”

18. I am satisfied that this is equally applicable to the Administration Act which provides no guidance as to the meaning of the term special circumstances. In Beadle v Director-General of Social Security (1985) 60 ALR 225, the Federal Court stated that it was not possible to lay down precise limits or precise rules for the meaning of the term. The Court indicated that this would depend upon the circumstances of each particular case but commented that, even though the term lacks precision, it was sufficiently understood “not to require judicial gloss" (at 228). There, the Court affirmed the decision of the Tribunal (Re Beadle and Director-General of Social Security(1984) 1 AAR 362) where (at 364) the Tribunal had acknowledged that the term was "incapable of precise or exhaustive definition" and that, to be special, the circumstances must be “unusual, uncommon or exceptional” and must have a “particular quality of unusualness that permits them to be described as special”.

19.    In Groth v Secretary, Department of Social Security (1995) 40 ALD 541, Kiefel J, after referring to the Federal Court's decision in Beadle’s case, observed (at 545) that special circumstances:

“…would require something to distinguish… [the]… case from others, to take it out of the usual or ordinary case. … It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.”

20. I accept that the applicant is experiencing financial hardship. However, section 101 of the Administration Act makes it clear that, alone, that it is not sufficient to justify waiver. I am also satisfied that the applicant does suffer from some form of depressive illness, but, in all the circumstances, I am not satisfied that the situation is so unusual, uncommon or exceptional as to take it out of the usual or ordinary case. Her husband is able to obtain casual work from time to time as a tug master and the applicant’s evidence was that he was not suffering from any health problems which would prevent him from doing that or, indeed, other forms of work. I am satisfied that there are no special circumstances other than financial hardship alone which would make it desirable to waive the applicant’s debts in this case.

Decision

21.The Tribunal affirms the decision under review.

I certify that the 21 preceding paragraphs are a true copy of the reasons for the decision herein of Mr R G Kenny, Member

Signed:         Sarah Oliver
  Associate

Date of Hearing  13 May 2004
Date of Decision  2 June 2004

The Applicant appeared by phone
For the Respondent                  Mr S Letch, Departmental Advocate