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

Tate and Secretary, Department of Social Services (Social services second review) [2017] AATA 392 (29 March 2017)
Division:GENERAL DIVISION
File Number: 2016/2393
Re:Allan Tate
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Mrs J C Kelly, Senior Member
Date:29 March 2017
Place:Sydney

The Tribunal sets aside the decision under review and remits the matter with the direction that the decision to pay the disability support pension and make the first payment to the applicant on 25 September 2012 which included arrears for the period of 19 June 2012 to 13 September 2012, was attributable solely to administrative error and the respondent must waive the right to recover the proportion of the debt attributable to that error, and recalculate the debt accordingly.
............................[sgd]............................................
Mrs J C Kelly, Senior Member
CATCHWORDS
SOCIAL SECURITY – disability support pension – overpayment – whether overpayment is a legally recoverable debt – whether all or part of the debt should be waived or written off – portion of debt due to sole administrative error - set aside and remitted
LEGISLATION
Acts Interpretation Act 1901 (Cth) s 15AB, 28A, 29
Social Security Act 1991 (Cth) ss 1064, 1223, 1236, 1237A
Social Security (Administration) Act 1999 (Cth), s 23, 68
CASES
Chapman and Secretary Department of Families and Community Services [2003] AATA 436
Coral Ann Moss and Secretary, Department of Social Security [1995] AATA 242
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Gerhadt and Department of Employment, Education & Amp; Training Austudy [1996] AATA 173
L v Department of Social Security No. N94/272 AAT No. 10230 (1995) 38 ALD 176
Minister for Immigration, Local Government and Ethnic Affairs v Roberts (1993) 41 FCR 82
Re Dainty and Minister for Immigration and Ethic Affairs (1987) 12 ALD 416
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Re Lumsden and Secretary Department of Social Security (1986) 10 ALN N225
Re Stubbs and Secretary Department of Families and Community Services (2003) AATA 729
Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190
REASONS FOR DECISION
Mrs J C Kelly, Senior Member
29 March 2017
DECISION UNDER REVIEW

The decision under review is the decision made by the Social Services and Child Support Division of the Administrative Appeals Tribunal (AAT1) on 6 April 2016, which affirmed a decision of an Authorised Review Officer (ARO) of the Department of Human Services (the Department) made on 27 November 2015 which, in turn, affirmed a decision of the Department made on 6 October 2015 to raise a debt of $23,546.70 against the applicant for payment of disability support pension to which he was not entitled to from 19 June 2012 to 25 September 2015 (the debt).
For the reasons set out below, the Tribunal sets aside the decision under review and remits the matter with the direction that the decision to pay the disability support pension and make the first payment to the applicant on 25 September 2012 which included arrears for the period of 19 June 2012 to 13 September 2012, was attributable solely to administrative error and the respondent must waive the right to recover the proportion of the debt attributable to that error, and recalculate the debt accordingly.
THE ISSUES
The issue in this case is whether the AAT1 decision made on 6 April 2016 requiring the applicant to repay the debt for overpayment of disability support pension is the correct or preferable decision.
In determining whether the AAT1’s decision is the correct or preferable decision, this Tribunal must consider:
·whether the applicant was paid disability support pension at a higher rate than what he was entitled to from 19 June 2012 to 25 September 2015;
·and if so, whether overpayment of disability support pension received by the applicant for 19 June 2012 to 25 September 2015 is a legally recoverable debt; and
·if so, whether all or part of the debt should be waived or written off for a period.
UNCONTENTIOUS FINDINGS
The following findings are not contentious.
The applicant has been in a de facto relationship with his partner since 1989.
The applicant received disability support pension from 19 June 2012 until 25 September 2015.
On 28 June 2012, the applicant completed an Income and Assets form and advised that his partner’s income from Australia Post was $1,600 per fortnight.
Departmental records show that it received the Income and Assets form together with a Module F (Business Details) on 29 June 2012. The Department also holds a record of a payslip in the partner’s name, for period ending 20 June 2012 with income of $2,926.63 per fortnight, which is stamped “received” on 29 June 2012”.
On 21 September 2012, the Department sent the applicant a notice to the last known address, setting out the information used for calculating his regular payment, including the recorded combined regular fortnightly earnings amount as $1,600. This notice also stated:
What you must tell us. You must tell us within 14 days...if any of the changes listed below happen or are likely to happen to you or your partner.
Income: your or your partner’s gross income changes.
On 25 September 2012, the Applicant was issued the first payment for disability support pension, including arrears for the period 19 June 2012 to 14 September 2012.
On 1 November 2012, the Department sent the applicant a notice to the last known address, setting out the information used for calculating his regular payment, including the recorded combined regular fortnightly earnings amount as $1,600. This notice also stated:
What you must tell us. You must tell us within 14 days...if any of the changes listed below happen or are likely to happen to you or your partner.
Income: your or your partner’s gross income changes.
On 7 July 2015, the Department commenced a Random Sample Survey. That survey is a review of entitlement to payments. As part of the review, the Department undertook various checks, including writing to Australia Post to verify the earnings of the applicant’s partner earnings and issuing an Income and Assets form to the applicant to complete.
The applicant completed an Income and Asset form on 14 July 2015 and stated that his partner receives no income from work.
On 3 September 2015, Australia Post stated that the partner’s employment had not ceased and confirmed the amount of partner’s earnings for the period June 2012 to August 2015.
On 6 October 2015, the decision was made to raise the debt.
LEGISLATION AND POLICY
The relevant law is contained in the Social Security Act 1991 (Cth) (the Act) and the Social Security (Administration) Act 1999 (Cth) (the Administration Act).
The Guide to Social Security Law (the Guide) is also relevant, although it is not a document that can assist with interpretation in accordance with s15AB of the Acts Interpretation Act 1901 (Interpretation Act).
The Tribunal is not bound to apply policy guidelines (see Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60), however, it will usually apply the guidelines unless there are cogent reasons in a particular case for not doing so: see Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 639-645; Re Dainty and Minister for Immigration and Ethic Affairs (1987) 12 ALD 416 at 417; and Minister for Immigration, Local Government and Ethnic Affairs v Roberts (1993) 41 FCR 82 at 86.
Disability support pension and income received by applicant
The rate of disability support pension which the applicant was entitled to receive was worked out using the calculator at Part 3.2, s 1064 of the Act. The rate calculation process involves a consideration of the income and assets of the person, and person’s partner, in order to work out a person’s maximum basic rate.
Section 1064-A2 of the Act sets out how members of a couple are assessed:
Where 2 people are members of a couple, they will be treated as pooling their resources (income and assets) and sharing them on 50/50 basis (see points 1064-E2 and 1064-G2)...
The applicant’s rate of disability support pension for the relevant period was calculated on the basis that his partner’s income from employment was $1,600 per fortnight.
During a random sample survey, the Department of Social Services obtained from the employer of the Applicant’s partner the actual income amounts she earned during the debt period. Australia Post records show that the partner earned more than the amount declared by the applicant. It follows therefore that in the debt period, the applicant received more disability support pension then he was entitled to receive.
Raising a debt against the Applicant
Subsection 1223(1) of the Act allows a debt to be raised if a person received a payment and was not entitled to obtain that benefit and states as follows:
(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.
The Applicant did not contest the fact that there had been an overpayment. His argument focussed on it being written off or waived.
CAN THE DEBT BE WRITTEN OFF?
Section 1236 of the Act provides that the Secretary may write off a debt in the following circumstances:
(1) Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.
(1A)     The Secretary may decide to write off a debt under subsection (1) if, and only if:
(a)the debt is irrecoverable at law; or
(b)the debtor has no capacity to repay the debt; or
(c)the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d)it is not cost effective for the Commonwealth to take action to recover the debt.
(1B)     For the purposes of paragraph (1A)(a), a debt is taken to be irrecoverable at law if, and only if:
(a)the debt cannot be recovered by means of deductions, or legal proceedings, or garnishee notice, because the relevant 6 year period mentioned in section 1231, 1232 or 1233 has elapsed; or
(aa)the debt cannot be recovered by means of deductions or setting off because the relevant 6 year period mentioned in section 86 of the A New Tax System (Family Assistance) (Administration) Act 1999 has elapsed; or
(b)there is no proof of the debt capable of sustaining legal proceedings for its recovery; or
(c)the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or
(d)the debtor has died leaving no estate or insufficient funds in the debtor’s estate to repay the debt.
(1C)     For the purposes of paragraph (1A)(b), if a debt is recoverable by means of:
(a)deductions from the debtor’s social security payment; or
(b)...or
(c)...;
the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship.
If a debt is written off, the debt will not be recovered at that time but still exists and may be recovered later.
The Tribunal finds that evidence before it does not establish that the applicant’s debt is irrecoverable at law, that the applicant has no capacity to repay the debt because his whereabouts are unknown, or that it is not cost effective for the Commonwealth to take action to recover the debt. The Tribunal finds that the Applicant has capacity to repay the $23,546.70 debt by means of deductions from his disability support pension in accordance with s 1236(1A)(b) read together with s 1236(1C)(a) of the Act, “unless recovery by those means would result in the debtor being in severe financial hardship”.
In making the finding that the applicant has the capacity to repay the debt by means of deduction from his disability support pension in accordance with s 1236(1A)(b) read together with s 1236(1C)(a) of the Act, the Tribunal has taken into account the applicant’s evidence that he does not receive pension payments every payment period because his partner’s income varies and sometimes he is not entitled to any payment. However, the Tribunal finds that s 1236(1C)(a) does not require that the payment must be made every pay period for the provision to apply.
Will recovery by that means result in the debtor, the applicant, being in severe financial hardship? The term “severe financial hardship” is not defined in the Act, however the term has been considered in various cases before this Tribunal:
·In Re Lumsden and Secretary Department of Social Security (1986) 10 ALN N225 the Tribunal held that for this term to be satisfied, a person’s entire financial position would need to be materially less than the current rate of pension.
·In Re Stubbs and Secretary Department of Families and Community Services (2003) AATA 729, the Tribunal stated at [20] that:
Severe financial hardship, while not implying destitution, goes beyond straitened financial circumstances and imports a need for the particular case of a person to include financial suffering of a severe or extreme nature.
·In L v Department of Social Security No. N94/272 AAT No. 10230 (1995) 38 ALD 176, the Tribunal stated in part at [66]:
In summary, I consider that matters relating to the personal financial hardship of the individual are always relevant in any decision as to write off under subsection 1236(1). Retrospective considerations may occasionally be relevant. The essential inquiry will always be whether recovery is a feasible proposition, bearing in mind the financial means and obligations of the individual concerned. Will recovery cause such personal hardship as to run contrary to the beneficial nature of the legislation?
The applicant provided to the Tribunal a Statement of financial position in which he set out his and his partner’s assets and liabilities, quarterly and weekly expenditure and income. He provided copies of the most recent statements for his bank account, his partner’s credit union account, personal loan accounts, and two credit card accounts. He also listed other expenses including payments to assist various family members. His partner is employed and works full-time. Her income varies but is in the order of $65,000 per annum.
The applicant owns his home which he values at $500,000. It is debt free. He has a $125,000 quarter share in a property which he says will not be sold. He has superannuation of $110,000. The applicant disclosed during the course of the hearing that he has three bank accounts in addition to that disclosed to the Tribunal. He explained that two of them were for money that was not his. After the hearing, he provided copies of recent statements for each account. The Tribunal accepts his explanations about those accounts. He said that he has a savings account but has no savings. The relevant bank statement shows that he has approximately $2,000 in savings. The applicant emphasised that he has no influence over his partner’s spending, which he considers to be undisciplined and in excess of her income.
The Tribunal found the applicant’s evidence about his and his partner’s financial circumstances somewhat exaggerated. The Tribunal does not accept that the applicant would suffer severe financial hardship if the debt were recovered by means of deductions from his social security payment for the following reasons.
The Tribunal finds that the applicant has substantial assets. It has taken into account his partner’s financial circumstances as disclosed in the information he provided, but does not accept his evidence that her spending is out of control. The credit union statement provided covered the period 3 December 2016, when the balance was $1,639.96, to 7 January 2017 when the balance was $61.64. The credit union statement includes payments to both her credit cards and her personal loan and day to day expenses. The applicant’s partner was paid on Tuesday 13 December 2016 and Friday 23 December 2016. Before her pay was credited to her account on those dates, the balance of her account was $252.84 and $234.22 respectively. The Tribunal finds that the document shows that the applicant’s partner is paid fortnightly. The Tribunal finds that her next pay day would have been Tuesday 10 January 2017. Based on that document and noting that it covers the Christmas period when expenditure would probably have been higher than usual, the Tribunal finds that the applicant’s partner lives within her means.
For the above reasons, the Tribunal does not accept that the debt may be written off pursuant to s 1236 of the Act.
CAN THE DEBT BE WAIVED?
Section 1237A of the Act provides the circumstances in which the Secretary may waive the right to recover all or part of a debt on the basis of an administrative error:
(1) Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.
Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).
The word “solely” in section 1237A(1) bears its ordinary meaning. The meaning of this word in the legislation which was predecessor to section 1237A(1) was considered by the Tribunal in Gerhadt and Department of Employment, Education & Amp; Training Austudy [1996] AATA 173 at [40] where the Tribunal found:
There is nothing in sub-section 289(1) which indicates that any meaning should be given to "solely" other than its ordinary meaning. Applying those ordinary meanings to the sub-section mean that the Secretary must waive the right to recover the proportion of the debt that is attributable only to the Commonwealth's administrative error. The Secretary's duty to waive does not extend to those debts which are attributable to errors or other factors which are independent of the Commonwealth's administrative error. It makes no difference that those other errors or factors are minor. If those other errors or factors follow as a result of the Commonwealth's administrative error (i.e. they are incidental to the Commonwealth's error), then it may be that the debt is attributable solely to the Commonwealth's administrative error. Whether it is or is not attributable in that situation to the Commonwealth's administrative error will be a question of fact.
In Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190, the Full Federal Court upheld a decision at first instance in which the judge found that a compensation recovery debt was not payable solely because of an administrative error, it was attributable to two circumstances. Selway J stated at paragraph [35]:
The ordinary or usual interpretation of the phrase 'attributable solely to¹ is that it refers to the single or sole cause of the relevant act or event. The word 'attributable¹ means 'capable of being attributed¹. It involves an objective assessment of causation. The words 'a debt attributable solely to an administrative error¹ can be paraphrased as meaning that the only cause that objectively can be ascribed to the relevant debt is an administrative error.
The Tribunal does not accept the respondent’s claim in its statement of facts and contentions that there is no cogent evidence before the Tribunal to suggest that the Department made an administrative error. To the contrary, the Tribunal understood the respondent to accept what is clear on the face of the documents, including the ARO’s decision. The Department initially recorded the income of the applicant’s partner as $1,600, then amended it to $2,926.63 per fortnight, but then, wrongly, reinstated the amount of $1,600 which remained on the Department’s record until 25 September 2015.

The Income and Assets form completed when the application was made for the applicant’s disability support pension showed that his partner’s gross fortnightly income was $1,600. The Department received that document on 29 June 2012. On the same day, the Department received a pay slip for the applicant’s partner showing her income as $2,926.63 the fortnight ending 20 June 2012. The Department’s error, described above in [39], then occurred.
The first notice to the applicant was dated 21 September 2012. The requirement in that notice was to advise the Department within 14 days of changes to his circumstances, including his partner’s income.
The respondent also relied on the notice sent out on 1 November 2012, which was in similar terms. Both notices set out the information used to calculate his regular payment, including that his partner’s income was $1,600.
In Coral Ann Moss and Secretary, Department of Social Security [1995] AATA 242 the Tribunal discussed the relevance of notices at [18]-[19]:
18Although the applicant now owes a debt to the Commonwealth, this debt must be waived pursuant to s.1237(1) of the Act if the Tribunal is satisfied that the debt arose solely because of an administrative error of the Commonwealth and the applicant received the payments giving rise to the debt in good faith. The Tribunal takes the view that on 11 August 1989, the applicant received a form which should have focussed her attention on the "combined income" of she and her husband and on that same form, "income" was defined to include not only "wages" but also "income from any other source within or outside Australia". Had the applicant or her husband read that definition, it should have been clear that the "income" which they needed to take into account covered a much wider range of receipts than merely her husband's "earnings" in the very restricted way in which they had been interpreting that term "earnings".
19The notice of 11 August 1989 was sufficient to correct the misinformation which had been given by the officer of the Department and if the applicant still remained confused, she should have contacted her "local Social Security Office..." as directed on the form. Her failure to do so was an error on her part so therefore, the overpayments that occurred in the relevant period were not caused solely by administrative error by the Commonwealth and therefore cannot be waived pursuant to s.1237(1) of the Act.
In Chapman and Secretary Department of Families and Community Services [2003] AATA 436 the Tribunal stated the following at [39] – [41] in relation to the relevance of notices:
39In the present case Mrs Chapman received a number of letters from the DSS which contained information which was obviously incorrect. The contents of the letters should have given her a sufficient clue or put her on notice that the administration of her benefits was fundamentally flawed. She acknowledged that the contents of the letters with respect to the rate of income of her husband was absurd but she did not telephone the respondent or write either by letter, email or facsimile. She did not attend a social security office personally. She was obliged under the recipient notification obligations to notify the DSS and she did not. I would have thought that Mrs Chapman would have been suspicious of her entitlement to receive a benefit at the same rate that was being paid before her husband commenced to earn a full time income.
40Whilst Mr Chapman made representations to the DSS concerning his status as a welfare recipient, Mrs Chapman did not. There was no attempt made by her to rectify the error in the respondent's records which would have surely brought to the respondent's attention that it was paying a benefit that it was not liable to pay or was paying at a rate in excess of what it was required to pay.
41It follows, from the preceding paragraphs, that waiver of the debt cannot be permitted because the debt is not attributable to sole error on the part of the Commonwealth. I again emphasise that none of this decision should be understood by Mrs Chapman as suggesting any dishonesty or fraud on her part. She was obliged as a recipient to put the DSS on notice of events recorded in the letters that she received and she did not. As the recipient of monies from the public purse she had a duty to comply and bring obvious errors to the attention of the respondent or to notify it of a change of circumstances. In all of these circumstances I cannot find that the payments made after November 1995 were received in good faith. Section 1237A therefore cannot be satisfied.
It is relevant to understand the circumstances confronting the applicant and his partner during the period when the application for disability support pension was filled out and the notices dated 21 September 2012 and 1 November 2015 were sent to the applicant.
On 23 May 2012, the applicant had fallen from his bicycle and suffered a C3-4 contusion with central cord syndrome. He was admitted to St George Hospital and then transferred to Prince of Wales emergency on 24 May 2012. He was in intensive care for about 11 days, in the acute spinal unit for 15 days and then in the rehabilitation spinal unit until his discharge on 29 January 2013.
In a letter to “whom it may concern” dated 18 March 2016, Dr Lee, the applicant’s Spinal & Rehabilitation Physician, described the applicant’s level of function at discharge and as of the date of the letter, in the following terms:
Mr Tate has extremely limited upper limb function; Mr Tate’s left upper limb is non-functional with a painful shoulder, very minimal active motor control in all muscle groups and reduced range of motion in the hand; Mr Tate experiences neuropathic pain in his left upper limb (predominantly in the upper arm) as well as nociceptive pain in his left shoulder…
…Mr Tate is able to mobilise indoors independently without any walking aids. He is able to mobilise short distances outdoors with supervision however he requires regular rest breaks due to fatigue and ongoing pain in his left shoulder which increases following prolonged periods of standing and walking.
Dr Lee concluded that the applicant’s current level of functioning does not allow him to perform tasks independently.
The applicant told the Tribunal that his level of function has improved since that letter was written, however, the Tribunal observed that he has insignificant function in his left upper limb. He did attend the Tribunal on his own, having been unable to organise for someone to accompany him.
The Tribunal accepts the applicant’s evidence, which is corroborated by his partner’s written statement, that the period from the date of injury until after 1 November 2012 was extremely difficult for both of them. The applicant had suffered a life-changing accident for which he was being treated. In addition, there were other family matters that impacted on his partner. The Tribunal accepts that she was under a lot of emotional stress. The Tribunal accepts that a social worker initiated the application for disability support pension, that the applicant’s partner filled it out and also sent her pay slip to the Department. The applicant did sign the application. The Tribunal accepts that the applicant’s partner did not recall receiving the mail from the Department during that period and that she was staying with her daughter in a suburb that was much closer to her place of work and to the hospital than was their home to which the notices had been sent.
The Tribunal finds that given the circumstances confronting the applicant and his partner, the Department notices were overlooked and neither the applicant nor his partner was aware of the applicant’s obligation to advise the Department of any change in the income the applicant’s partner received.
It is not in dispute that the applicant did not contact the Department at any time to correct the error in the Department’s records.
The respondent submitted that no portion of the debt was a consequence of sole administrative error because the pension would not have been granted if the correct information had been provided in response to the notice of 21 September 2012. The first payment was made on 25 September 2012.
Subsection 68(1) of the Administration Act provides that subsection 68(2) applies to a person to whom a social security payment is being paid.
(2) The Secretary may give a person to whom this subsection applies a notice that requires the person to do any or all of the following:
(a) inform the Department if:
a specified event or change of circumstances occurs; or
the person becomes aware that a specified event or change of circumstances is likely to occur;...
Disability support pension is, relevantly, a social security payment.
The two notices sent to the applicant in September and November 2012 were sent by pre-paid post to the applicant’s residence. The Tribunal accepts that the notices were served in accordance with ss 28A and 29 of the Interpretation Act. The Tribunal does not accept that the applicant’s evidence that they could have been stolen from or fallen out of his letter box as proof that they were not delivered. The applicant gave this evidence for the first time at the Tribunal hearing. In making this finding, the Tribunal has taken into account the photographs he provided of the mail boxes in front of his and adjoining premises as well as an internet print-out about NSW police launching “Mailsafe” on an unspecified date, but gives them little weight. The applicant told the AAT1 that he believed his partner may have put the letters in her handbag and later lost or disposed of them. That explanation is consistent with the Tribunal’s finding that they were overlooked.
Not being aware of the requirements set out in the notices does not absolve the applicant from his responsibility to have notified the Department of any change in circumstances. However, the Tribunal does not accept the respondent’s contention that the applicant’s failure to notify the correct income of his partner had the consequence that the pension would not have been granted when it was and consequently he would not have been paid on 25 September 2012. The notice dated 21 September 2012 required the applicant to advise the Department within 14 days of relevant chances in circumstances. That is, he would have satisfied that obligation if he had provided the information by 5 October 2012.
The Tribunal finds that the decision to grant the disability support pension and make the first payment to the applicant on 25 September 2012 which included arrears, was attributable solely to administrative error and the respondent must waive the right to recover the proportion of the debt solely attributable to that error. Payments thereafter were not solely attributable to administrative error because the applicant failed to provide the information required by the Department.
The applicant pointed to what, he claimed, were other administrative errors. A second letter sent to the applicant on 21 September 2012, stated that he had to report every two weeks for each specified Reporting Period and set out a schedule of days on which he had to report from 29 September 2012 until 7 December 2012. It also stated that “Once your reporting requirements have been met your payment will be issued”. He never reported as required but the payments were issued. On 1 November 2012, the respondent sent the applicant a letter which said: “As your and/or your partner’s circumstances have changed, you are no longer required to report every two weeks to get paid”. It also advised him of his obligation to advise the respondent of changes in circumstances affecting his payment and enclosed a form entitled ‘Changes you must tell The Department about’ for details.
The Tribunal has taken those matters into account, but they do not alter its conclusion that the payments made after the first payment, when he was obliged to notify the Department of relevant changes in his circumstances, were not solely attributable to administrative error.
Are there special circumstances in which the respondent may waive the right to recover all or part of the balance of the debt pursuant to s 1237AAD of the Act? This power may be exercised if the secretary is satisfied that:
(a)the debt did not result wholly or partly from the debtor or another person knowingly:
(i)making a false statement or a false representation; or
(ii)failing or omitting to comply with a provision of this Act, the Administration Act or the 1947 Act; and
(b)there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
it is more appropriate to waive than to write off the debt or part of the debt.
The applicant must satisfy all three criteria for his debt to be waived. There is no definition of “knowingly” in the Act. However, a number of Tribunal decisions have considered the meaning of the word in this context. Deputy President Forgie in Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435 commented at [48]:
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.
In Cox and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 350, the Tribunal cited Re Callaghan and concluded at paragraph [38]:
Whilst it is clear from this passage that actual (as compared to) constructive knowledge is required, the Tribunal has recognised that the presence of actual knowledge may be inferred from the circumstances where a debtor had the opportunity to gain that knowledge, and there were no obstacles preventing him acquiring that knowledge: see also Anderson and Department of Family and Community Services [2002] AATA 239; (2002) 68 ALD 494, Secretary, Department of Family and Community Services and Temesgen [2002] AATA 1290; (2002) 72 ALD 563 at 564-565 and Balancio and Secretary, Department of Family and Community Services [2003] AATA 466; (2003) 74 ALD 204 at 209.
The Tribunal does not accept the respondent’s submission that based on the letters sent to the applicant on 21 September 2012 and 1 November 2012, the applicant knew he must advise the Department about the changes in his partner’s income. For the reasons set out above, the Tribunal has found that he was unaware of the notice and the requirement set out in the notice.
For certainty, the Tribunal finds that it does not accept that the applicant or his partner knowingly made a false statement or false representation in relation to the $1,600 income figure set out in the income and assets statement. The Tribunal finds that the $1,600 figure was given by the applicant’s partner as her best guess of her average fortnightly earnings. She provided a pay slip showing the actual figure on the same day the application was lodged.
SPECIAL CIRCUMSTANCES
Are there special circumstances that make it desirable to waive the debt pursuant to satisfy s 12377AA?
For there to be special circumstances, the applicant must demonstrate that his circumstances are unusual or uncommon. In Groth and Secretary Department of Social Security (1995) FCA 1708, the Federal Court found at [12]:
The phrase "special circumstances", it has been said, although imprecise is sufficiently understood not to require judicial gloss: Beadle's case (229), and for present purposes it is sufficient to observe that it would require something to distinguish Mr Groth's case from others, to take it out of the usual or ordinary case. That was, I consider, the only enquiry to be undertaken in this 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. The enquiry I have referred to would involve considering what would be the effect, if the provision in question or the principle of liability it creates, is applied...
While the Tribunal accepts that the applicant has suffered a serious and life-changing injury, it does not accept that that circumstance and/or any other aspect of his circumstances, including other family issues facing him and his partner, are special circumstances that warrant the exercise of the discretion under this section.
In making those findings, the Tribunal has taken into account the authorities the applicant referred to in his written statement and the factors referred to including the general administration of the social security system, the physical and emotional state of the person together with their decision-making capacity and financial circumstances, and that the discretion is broad. It has also taken into account that that the raising of the debt after more than three years of receiving it continuously without any problem has caused the applicant and has partner considerable distress.
The Tribunal understands that the applicant was very concerned that he was being accused of acting dishonestly or fraudulently. He provided references and evidence going to his good character. It is clear from the reasons set out above, that the Tribunal has made no finding that in any way implies that the applicant has acted dishonestly or fraudulently.
DECISION
For the reasons set out above, the Tribunal sets aside the decision under review and remits the matter with the direction that the decision to pay the disability support pension and make the first payment to the applicant on 25 September 2012 which included arrears for the period of 19 June 2012 to 13 September 2012, was attributable solely to administrative error and the respondent must waive the right to recover the proportion of the debt attributable to that error, and recalculate the debt accordingly.

I certify that the preceding 71 (seventy-one) paragraphs are a true copy of the reasons for the decision herein of Mrs J C Kelly, Senior Member

..............................[sgd]..........................................
Associate
Dated: 29 March 2017

Date of hearing: 17 January 2017

Applicant: In person

Solicitors for the Respondent: Ms B Salaji, Department of Human Services

[2017] AATA 392

29 March 2017

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Remedies

Procedural Fairness

Statutory Construction

Date of hearing:	17 January 2017
Applicant:	In person
Solicitors for the Respondent:	Ms B Salaji, Department of Human Services