TPVB and Secretary, Chief Executive Centrelink (Social security second review) - [2025] ARTA 1270

TPVB and Secretary, Chief Executive Centrelink (Social security second review) [2025] ARTA 1270 (7 August 2025)
Applicant:TPVB
Other Parties:  Secretary, Chief Executive Centrelink
Tribunal Numbers:              2023/8740; 2023/8742; 2024/4109
Tribunal:Senior Member T Hamilton-Noy (second review)
Place:  Melbourne
Date:7 August 2025
Decision:The Tribunal sets aside the decisions under review and:
·   Makes a decision in substitution that there is a parenting payment debt of $68,854.37 for the period 22 August 2017 to 1 April 2022 that is recoverable by Centrelink;
·   Remits the family tax benefit and newborn supplement debts to Centrelink for recalculation, taking into account the Applicant’s qualification for parenting payment for part of the debt periods, with any amounts recalculated being recoverable by Centrelink; and
·   Makes a decision in substitution that no interest charges are to be imposed in respect of the parenting payment debt.

Statement made on 07 August 2025 at 4:14pm
Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 161(1B)–161(1C) of the A New Tax System (Family Assistance) (Administration) Act 1999 and subsections 201(1A)–201(1B) of the Social Security (Administration) Act 1999.
Catchwords
Parenting payment debt – Covid supplement debt – family tax benefit debts – newborn supplement debt – partner’s earnings from self-employment – administrative error – no special circumstances – whether an interest charge should be imposed – whether reasonable excuse for failing to enter a payment plan
Legislation
Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (Cth)
A New Tax System (Family Assistance) Act 1999 (Cth)
A New Tax System (Family Assistance) (Administration) Act 1999 (Cth)
Coronovirus Economic Response Package Omnibus Act 2020 (Cth)
Social Security Act 1991 (Cth)
Social Security (Administration) Act 1999 (Cth)
Cases
Beadle and Director-General of Social Security (1984) 6 ALD 1
Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114
Haggerty v Department of Education, Training and Youth Affairs [2000] FCA 1287
Panacci and Secretary, Department of Employment and Workplace Relations [2008] AATA 30
Read v Commonwealth [1988] HCA 26
Re Gerhardt and Department of Employment, Education and Training [1996] AATA 173
Secretary, Department of Education, Employment, Training and Youth Affairs v Barry Prince [1997] FCA 1565
Secretary, Department of Family and Community Services v Sekhon [2003] FCA 76
Secretary, Department of Social Security and Garvey (1989) 19 ALD 348
Statement of Reasons
Background

This application relates to the raising and recovery of a series of debts from the Applicant based on her partner’s earnings from employment.
The Applicant received parenting payment between July 2017 and March 2022 and was paid Covid supplement payments between May 2020 and March 2021.
The Applicant also received family tax benefit in the 2017/18, 2018/19, 2019/20 and 2020/21 financial years, and was paid a newborn supplement payment during the 2019/20 financial year.
On 10 June 2022, an employee of Centrelink decided to raise and recover a parenting payment debt of $64,738.91 relating to the period 1 July 2017 to 31 March 2022 and a Covid supplement debt of $9,250 relating to the period 1 May 2020 to 29 March 2021, on the basis that the Applicant’s partner’s earnings from employment had not been used to determine her correct rate of payment. Following a request for internal review of the decision, on 21 March 2023 an authorised review officer of Centrelink affirmed the decision.
On 4 April 2022 and 3 May 2022, decisions were made to raise and recover family tax benefit debts totalling $274.97 for the 2017/18 financial year, $1,016.16 for the 2018/19 financial year, $13,184.86 for the 2019/20 financial year and $11,917.25 for the 2020/21 financial year and a newborn supplement debt of $560 that had been paid in the 2019/20 financial year. Following a request for an internal review of these decisions, on 4 May 2022 an authorised review officer of Centrelink affirmed the decision to raise and recover the family tax benefit and newborn supplement debts.
The Applicant sought independent reviews of both decisions to the Administrative Appeals Tribunal (the AAT).
On 14 July 2022, the AAT at first review set aside the decision relating to the family tax benefit and Covid supplement debts and made a decision to:
(i)Set aside the family tax benefit debts of $274 for the 2017/18 financial year, $1,016.16 for the 2018/19 financial year and $13,184.86 for the 2019/20 financial year and remit with directions that the debts were to be recalculated on the basis that the Applicant was not entitled to parenting payment during the debt period;
(ii)Affirm the decision to raise and recover a family tax benefit debt of $11,917.25 for the 2020/21 financial year; and
(iii)Set aside the newborn supplement debt of $560 for the 2019/20 financial year and substitute a decision that there is no debt, on the basis the Applicant’s combined income did not exceed the adjusted taxable income limit for the payment.
On 30 October 2023, the AAT at first review affirmed the decision to raise and recover the parenting payment and Covid supplement debts.
The Applicant sought second review of both decisions on 21 November 2023 and 17 June 2024. An extension of time was granted in respect of the latter application.
From 14 October 2024, the AAT became the Administrative Review Tribunal (the Tribunal). Under the transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (Cth) (the Transitional Act), applications for review to the AAT that were not finalised before 14 October 2024 are taken to be an application for review to the Tribunal. The Transitional Act gives the Tribunal the authority to continue and finalise any aspect of the review not already completed by the AAT. This decision and statement of reasons is made by the Tribunal.
The Tribunal held a hearing for both matters on 13 May 2025. The Applicant attended the hearing in person and gave evidence on affirmation. A representative for the Respondent also appeared in person.

Issues and relevant law

The legislation relevant to this matter is contained in the Social Security Act 1991 (Cth) (the Social Security Act), the Social Security (Administration) Act 1999 (Cth) (the Social Security Administration Act), the A New Tax System (Family Assistance) Act 1999 (Cth) (the Family Assistance Act) and the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (the Family Assistance Administration Act).
The Tribunal noted that the basis for the raising of all debts in these matters relates to the Applicant’s partner’s income from self-employment. Neither the Applicant nor the Respondent disputed that the Applicant and her partner were a de facto couple throughout the periods being considered by the Tribunal. The Applicant gave evidence of having commenced a relationship in 2014 or 2015 with her partner and having lived with her partner between 2017 and 2022. The Applicant gave evidence of having given birth to their first child in 2017 and of now having three children with her partner.
A “member of a couple”, for social security purposes, is guided by subsection 4(2) and (3) of the Social Security Act. A person is considered a member of a couple where they have a relationship with another person, are not legally married to the other person, their relationship is a de facto relationship (having regard to subsection s(3) and (3A)), they are over the age of consent and they are not within a prohibited relationship (subsection 4(2) of the Social Security Act). A finding of a de facto relationship is to be guided by considerations around the financial aspects of the relationship, the nature of the household, the social aspects of the relationship, any sexual relationship between the people and the nature of the people’s commitment to each other (subsection 4(3) of the Social Security Act). Further, the relevant decision-maker must be satisfied that the person and their partner are not living separately and apart on a permanent or indefinite basis (subsection 4(3A) of the Act).
A “member of a couple” for family tax benefit purposes is defined at section 3 of the Family Assistance Act as having the same meaning as in the Social Security Act.
The Tribunal accepted that the Applicant was a member of a couple during the period under review and that her partner’s income is therefore relevant in determining the rates of family tax benefit and parenting payment (and associated supplementary payments) payable to her.
The Tribunal also noted that, at the time the matter has proceeded before this Tribunal, Centrelink had made a decision to impose interest charges in respect of the parenting payment debt, on the basis that the Applicant had not repaid the debt by the due date and had not entered into a payment arrangement.[1] The Tribunal accepted that it has jurisdiction to also consider this aspect of the Centrelink decision.
[1] Respondent’s Statement of Facts, Issues and Contentions, para 35.
The Tribunal considered that the issues before it in this matter are:
i.    Whether there is a parenting payment debt for the period from 22 August 2017 to 1 April 2022 (including Covid supplements paid to the Applicant);
ii.    Whether there are family tax benefit debts for the 2017/18, 2018/19, 2019/20 and 2020/21 financial years;
iii.    Whether there is a newborn supplement debt for the 2019/20 financial year;
iv.    Whether the debts are recoverable by Centrelink; and
v.    Whether interest charges were correctly imposed in respect of a parenting payment debt.

Parenting payment debt – Relevant law, evidence and findings

The qualification requirements to receive parenting payment are set out in section 500 of the Social Security Act. The Applicant agreed in her evidence at the hearing that she had claimed parenting payment on 5 May 2017 and had been granted the payment at the partnered rate from 18 April 2017. It was not disputed, and the Tribunal accepted, that the Applicant met the qualification requirements from the date of grant.
Covid supplement payments were made to social security recipients under the Coronavirus Economic Response Package Omnibus Act 2020 and provided, where a person was receiving parenting payment, for their rate of payment to be increased by the amount of the COVID-19 supplement from 27 April 2020. The Tribunal accepted from the “One Off Payments (OOP)” screens provided by the Respondent that Covid supplement payments were made to the Applicant between 1 May 2020 and 29 March 2021.
Section 503(b) of the Social Security Act states that, where a person is a member of a couple, their rate of parenting payment is worked out using the Benefit PP (Partnered) Rate Calculator at the end of section 1068B of the Social Security Act.
Subsections 1068B(1) and (2) of the Social Security Act provide that if a person is a member of a couple, their rate of parenting payment is the benefit PP (partnered) rate and that this rate is worked out in accordance with the rate calculator at the end of the section. The method statement in Part 1068B- A2 is relevant where a person is not a partner of a non-independent youth allowance recipient, and provides that:
Step 1.  Work out the person's maximum basic rateusing Module C below.
Step 2.  Work out the amount per fortnight (if any) of rent assistance in accordance with paragraph 1070A(a).
Step 2A.  Work out the pension supplement amount (if any) using Module DA below.
Step 2B.  Work out the energy supplement (if any) using Module DB below.
Step 3.  Work out the amount per fortnight (if any) of pharmaceutical allowance using Module E below.
Step 4.  Add up the amounts obtained in steps 1 to 3: the result is called the maximum payment rate.
Step 5.  Apply the income test using Module D below to work out the person's income reduction.
Step 6.  Take the income reduction away from the maximum payment rate: the result is called the provisional payment rate .
Step 7.  The rate of benefit PP (partnered) is the difference between:
(a)  the provisional payment rate; and
(b)  any advance payment deduction (see Part 3.16A);
plus any amount by way of remote area allowance that, under Module G, is to be added to the person's rate of benefit PP (partnered).
Section 1068B-D1 requires that a person’s ordinary income, and their partner’s ordinary income, is used when calculating their maximum payment rate.
“Ordinary income” is defined in section 8 of the Social Security Act to be income that is not maintenance income or an exempt lump sum. “Income” is further defined in section 8 of the Social Security Act to include an income amount earned, derived or received by a person for the person’s own use or benefit; a periodical payment by way of gift or allowance; or a periodical benefit by way of gift or allowance; but to not include amounts excluded under subsections 8(4), (5) or (8).[2]
[2] Subsections 8(4), (5) and (8) of the Social Security Act do not specify earnings or self-employment earnings as excluded amounts.
The Tribunal accepted that the Applicant received a notice from Centrelink, dated 30 May 2017, advising her of her parenting payment rates from 20 May 2017 onwards. The letter noted that the Applicant’s rate of payment was being calculated, in relevant part, on her “partner’s annual other income” of $17,945.20 and that her payment was being worked out using both her and her partner’s incomes. The letter also noted the following:
What you must tell us
You must tell us within 14 days (28 days if residing outside Australia) if any of the changes listed below happen or are likely to happen to you and/or your partner (if you have one). If you get a Reporting and Income Statement, report your earnings or changes in circumstances on your reporting day.
This is an information notice given under social security law.
You must tell us if:
……
- Your or your partner’s income from self-employment or a business increases
Income
Income includes money you receive or will receive when you (or your partner):
-Start work or go back to work, change jobs, or start any form of business or self-employment
The Applicant gave evidence at the hearing that the letter had been sent to her correct address but that she doesn’t remember receiving any notices sent to her by Centrelink. She told the Tribunal that she had had a discussion with a Centrelink customer service officer and had advised that her partner was a sole trader and she could not report his income. The Applicant claimed that she had been told to “just avoid it” and that whenever Centrelink needed anything, it would ask the Applicant for the information.
The Tribunal accepted that from August 2017 onwards, the Applicant’s rate of parenting payment was calculated on her partner’s annual income of $17,945.20. The Applicant did not dispute the information contained in her partner’s income tax returns (contained in the documents provided by the Respondent) that her partner’s net income from self-employment for the 2016/2017 financial year was $42,146. The Tribunal accepted that the 2016/17 income tax return was lodged with the ATO on 22 August 2017. The Tribunal further accepted that subsequent income tax returns were lodged by the Applicant’s partner on the following dates:
·On 14 May 2019, the Applicant’s partner lodged his 2017/18 income tax return, declaring net business income of $80,597;
·On 5 August 2019, the Applicant’s partner lodged his 2018/19 income tax return, declaring net business income of $108,730;
·On 15 August 2020, the Applicant’s partner lodged his 2019/20 income tax return, declaring net business income of $104,485; and
·On 3 August 2021, the Applicant’s partner lodged his 2020/21 income tax return, declaring net business income of $161,243.
In addition, the Tribunal accepted that, in the period under review, the Applicant’s partner had savings of $54,251 to $81,123. Section 1078 of the Social Security Act provides that a person who has financial assets is taken, for the purposes of the legislation, to receive ordinary income from those assets in accordance with section 1078. Subsection 1078(3A) of the Social Security Act provides a method statement to calculate deemed income from assets. The Respondent has provided calculations undertaken with respect to the Applicant’s partner’s savings and the Tribunal accepted those calculations as correct.
The Applicant did not dispute the raising of the parenting payment debt in her evidence at the hearing. She submitted, rather, that she had been told she was qualified for the payment and had not been advised during the debt period that she was not eligible.
The Respondent submits that there is a parenting payment debt in the amount of $68,854.37 for the period 22 August 2017 to 31 March 2022, constituted by an overpayment of parenting payment of $59,604.37 and an overpayment of Covid supplement of $9,250. The Respondent submits that this is on the basis of sections 1068B-D19 and 1068B-D20 of the Social Security Act, which provide that:
1068B - D19  Subject to points 1068B - D8 to 1068B - D18 (inclusive), a person's ordinary income (except employment income) is to be taken into account over such period, not exceeding 52 weeks, as the Secretary determines.
Note 1:  This point, in conjunction with point 1068B - D20, enables the Secretary to determine the person's fortnightly income amount that best represents the person's income situation.
Note 2:  See Division 1AA of Part 3.10 for the treatment of employment income.
Fortnightly rate of ordinary income
1068B - D20  For the purposes of this Module, the person's ordinary income (except employment income) for such a period is to be reduced to a fortnightly rate rounded to the nearest cent (rounding 0.5 cents downwards).
The Respondent noted in written submissions that subsection 1075(1) of the Social Security Act allows for reduction of business income by:
i.losses and outgoings that relate to the business and are allowable deductions for the purposes of section 8-1 of the Income Tax Assessment Act 1997; and
ii.amounts that relate to the business and can be deducted in respect of plant (within the meaning of the Income Tax Assessment Act 1997) under Division 40 of that Act; and
iii.amounts that relate to the business and are allowable deductions under section 290-60 of the Income Tax Assessment Act 1997.
The Respondent noted in written submissions that (paragraph numbering deleted):
On 22 August 2017 (start of the debt period), in accordance with Module D of section 1068B, to receive the full rate of PPP where the partner is not a pensioner, the Applicant’s income must be no more than $104 per fortnight and the partner’s income must be no more than $949 per fortnight. The Applicant’s income reduces the rate of PPP by 50 cents for each dollar between $104 and $254, and by 60 cents for each dollar above $254 per fortnight before reaching an income cut off amount by $948.17. The partner’s income over $949 per fortnight reduces the rate of PPP by 60 cents for each extra dollar before reaching an income cut off limit of $1,768.17 per fortnight. The income test thresholds changed throughout the debt period and are detailed in The Guide to Australian Government Payments.
The cumulative effect of the above provisions is that:
a)the gross fortnightly ordinary income earned, derived or received by the Applicant and her partner from all sources, less permissible reductions of business income, must be applied to the ordinary income test in Module D of section 1068B of the Act in order to determine the rate of PPP;
b)the Act allows for ordinary income to be taken into account over such period, not exceeding 52 weeks, as the Secretary determines. It enables the Secretary to determine the person’s fortnightly income amount that best represents the person’s income situation.
c)The Guide provides that the business income is generally assessed using the most recent income tax return (less permissible reductions), which is then divided into 26 equal instalments and applied in each fortnight.

The Tribunal accepted the approach outlined by the Respondent at hearing, that the Applicant’s partner’s net self-employment income was applied from the date each of the income tax returns was lodged. The Respondent submits, and the Tribunal accepts, that the Applicant’s partner’s level of income reduced the rate of parenting payment payable to her between 22 August 2017 and 17 May 2019, and that from 18 May 2019 to 1 April 2022 a nil rate was payable to the Applicant due to her combined income, resulting in a total overpayment to her of $68,854.37.
The Tribunal accepted from the information and submissions provided by the Respondent that, in the period 22 August 2017 to 1 April 2022, the Applicant’s rate of parenting payment (including the Covid supplement payments) was calculated using a lower level of combined income than was correct. The Tribunal accepted that, between 22 August 2017 and 1 April 2022, the Applicant was overpaid parenting payment (inclusive of covid supplement payments made to her) totalling $68,854.37.
Section 1223 of the Social Security Act provides that where a social security payment is made and 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 Tribunal finds that the Applicant owes a debt to the Commonwealth in the amount of $68,854.37, relating to the period 22 August 2017 to 1 April 2022.

Family tax benefit debts – Relevant law, evidence and findings

Section 58 of the Family Assistance Act provides that the rate of family tax benefit is to be calculated in accordance with the Rate Calculator in Schedule 1. Schedule 1 to the Family Assistance Act provides rate calculation processes to work out an individual’s Part A rate calculated under Part 2 and Part B rate calculated under Part 4.
An individual’s partner’s adjusted taxable income is relevant to both the calculation of family tax benefit under Schedule 1 to the Family Assistance Act (for example, it is of relevance under section 28B to the Schedule in determining whether an individual or their partner’s adjusted taxable income is used to calculate their Part B rate) and to determining their adjusted taxable income under Schedule 3 (Clause 3 of Schedule 3 provides that if a person is a member of couple, the person’s adjusted taxable income for an income year for family tax benefit and schoolkids bonus purposes includes the adjusted table income for that year of their partner).
The Tribunal accepted from information provided by the Respondent that the Applicant claimed family tax benefit on 14 June 2017 and was paid family tax benefit from 23 June 2017. The Tribunal accepted that the rate of family tax benefit was paid to the Applicant without taking into account her partner’s adjusted taxable income, on the basis that she was receiving a social security payment. The Applicant did not dispute that she had provided her partner’s 2016/17 income tax return to Centrelink on 12 September 2017 and the Respondent has conceded that this was not taken into account in determining her rate of parenting payment. As a result, she continued to be paid family tax benefit by way of fortnightly instalments without taking this income into account. No further contact was made by the Applicant about her partner’s earnings until 29 July 2021. As a result of this, the Tribunal accepted that:
·During the 2016/17 financial year, the Applicant was paid family tax benefit without taking her partner’s income into account. Her partner’s taxable income for 2016/17 was $42,146;
·From 1 July 2017, the Applicant was paid family tax benefit based on an estimate of her partner’s income of $56,089. The Applicant’s partner’s taxable income for 2017/18 was $80,597;
·No estimate of her partner’s income was provided by the Applicant for the 2018/19 financial year. Her partner’s taxable income for 2018/19 was $108,730;
·From 1 July 2019, the Applicant was paid family tax benefit based on an estimate of her partner’s income of $9,000. The Applicant’s partner’s taxable income for 2019/20 was $104,485; and
·From 1 July 2020, the Applicant was paid family tax benefit based on an estimate of income of $60,300 and from 13 September 2020 she was paid family tax benefit based on an estimate of income of $143,648. Her partner’s taxable income for 2020/21 was $161,243.
The Respondent submitted that any overpayments of family tax benefit paid to the Applicant had been incorrectly calculated, based on an assessment of her having been qualified for parenting payment between 18 May 2019 and 1 April 2022, and that the debts should be remitted for recalculation. The Tribunal accepted these submissions.
Section 71 of the Family Assistance Administration Act provides that an overpayment of family tax benefit is a debt due to the Commonwealth in circumstances where the person was not entitled to the assistance in respect of a period or event. Based on the submissions provided by the Respondent, the Tribunal has decided to set aside the decision to raise the family tax benefit debts and a newborn supplement debt and to remit the matter for the debts to be recalculated by the Respondent based on the Applicant’s qualification for parenting payment during the debt periods. Any recalculated amounts are debts due to the Commonwealth under section 71 of the Family Assistance Administration Act.

Are the debts recoverable?

Write off

Section 1236 of the Social Security Act (relevant to the parenting payment debt) and section 95 of the Family Assistance Administration Act (relevant to the family tax benefit debt) each provide for write off of a debt for a period of time. Each provision provides that a debt may be written off where:
(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.
Each provision also defines that a debt is taken to be irrecoverable law if, and only if: there is no proof of the debt capable of sustaining legal proceedings for its recovery; the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or the debtor has died leaving no estate or insufficient funds in the debtor’s estate to repay the debt (subsection 1236(1B) of the Social Security Act; subsection 95(3) of the Family Assistance Administration Act).
As to whether a debtor has capacity to repay a debt, subsection 1236(1C) of the Social Security Act provides that:
(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) deductions under section 84 of the A New Tax System (Family Assistance) (Administration) Act 1999; or
(c) setting off under section 84A of that Act;
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.
Subsection 95(4) of the Family Assistance Administration Act provides for similar considerations, but refers to recovery by the above three means in addition to application of an income tax refund under section 87 and setting off under section 87A against a payment referred to in paragraph 82(1)(c) (child care service payments).
The Tribunal finds that the debts in these matters are recoverable at law, the debtor’s whereabouts are known and it is cost effective for the Commonwealth to take action to recover the debts.
As to whether the Applicant has the capacity to repay the debts, the Tribunal heard from the Applicant at hearing that her partner is still self-employed. When asked what her partner’s income is, she stated “we can’t estimate”. She later estimated his income at $2,200. The Applicant confirmed in her evidence at hearing that she and her partner have an investment property that is currently rented.
The Tribunal had some difficulty accepting that the Applicant was unable to provide any indication of the family’s current level of income. On the evidence before it, the Tribunal was not satisfied that the Applicant has no capacity to repay the debts and therefore finds that none of the legislative requirements for write off of the debts are met.

Can the family tax benefit debts be waived due to administrative error?

Section 97 of the Family Assistance Administration Act provides that a debt must be waived where:
(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.
The Respondent noted, in written submissions provided to the Tribunal, that in Re Gerhardt and Department of Employment, Education and Training [1996] AATA 173, the AAT noted (at [36]) that ordinary meaning of the word “solely” means “only” or “to the exclusion of all else”. The Respondent further noted that, in Secretary, Department of Family and Community Services v Sekhon [2003] FCA 76, the Federal Court noted (at [41]) that:
However, it seems to me, the Tribunal failed to consider the significance of the inclusion, in s 1237A(1), of the word “solely”. For the subsection to have effect, the “proportion” of the debt – in this case, it is common ground, that would be the whole of it – must be “attributable solely” to administrative error. It is not enough that, in the absence of administrative error, the debt would not have arisen. Administrative error must be the sole cause, not merely one of multiple cases.
The Tribunal finds that the family tax benefit debts are not able to be waived. They were caused by the Applicant not advising Centrelink of her partner’s taxable income in each of the financial years and were not caused by sole administrative error by Centrelink. Further, in circumstances where the Applicant’s partner is employed and the family is maintaining an investment property, the Tribunal was not persuaded that the Applicant would suffer severe financial hardship if the debts were not waived. None of the family tax benefit debts are able to be waived under section 97 of the Family Assistance Administration Act.

Can the parenting payment debt be waived due to administrative error?

Section 1237A of the Social Security Act provides for waiver of a debt in the following circumstances:
(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).
(1A)  Subsection (1) only applies if:
(a)   the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or
(b) if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;
whichever is the later.
The case law cited above is also of relevance in considerations as to waiver of the parenting payment debt.
The Respondent has conceded that the parenting payment debt relating to two distinct periods was due to sole administrative error by Centrelink. The Tribunal accepted that the Applicant had provided a copy of her partner’s income tax return to Centrelink on 12 September 2017, reflecting his 2016/17 taxable income of $42,146, an amount higher than that maintained by Centrelink at that point in time. The income was not taken into account by Centrelink following the provision of the income tax return and the Applicant’s parenting payment continued to be incorrectly calculated on her partner’s income of $17,945.20. The Tribunal accepted that, from 12 September 2017, sole administrative error caused an incorrect rate of parenting payment to be paid to the Applicant.
The Applicant was sent correspondence by Centrelink on 24 April 2019. The letter was headed “Your family assistance” and set out the Applicant’s rate of family tax benefit from 7 May 2019, and incorrectly reflected the Applicant’s partner’s income as $18,694.78. While the letter did not reference the Applicant’s parenting payment, it indicated that an incorrect level of income was being maintained for the Applicant’s partner. No contact was made with Centrelink by the Applicant to advise the details were incorrect. The Tribunal found that sole administrative error no longer caused the overpayment from the date of the letter, being 24 April 2019.
The Applicant contacted Centrelink on 29 July 2021 and the records of this maintained by Centrelink indicate that the Applicant “reported earning for husband but husband is self employed EANS corrected”. On the same date, the records reflect that the Applicant was requested to provide her partner’s income tax returns lodged with the ATO for the 2016/17, 2017/18, 2018/19, 2019/20 and 2020/21 financial years. The Respondent has submitted, and the Tribunal accepted, that all income tax returns aside from the 2016/17 return were provided by the Applicant on 2 August 2021 and 3 August 2021.
The Respondent has also submitted that the information provided in the income tax returns was not actioned by Centrelink until the Applicant’s parenting payment was suspended on 1 April 2022. The Applicant was, however, sent correspondence by Centrelink on 12 November 2021 about her rate of parenting payment from 30 October 2021. The letter noted that the following information was being used to calculate the Applicant’s regular payment:
Assets  $83,283.00
Your partner’s annual other income  $17,831.06
Your partner’s fortnightly earned income                $0.00
Your annual other income   $0.26
Your fortnightly earned income   $0.00
The Tribunal finds that from the date of this correspondence, given the Applicant did not respond to the incorrect details in the letter, sole administrative error did not cause the overpayment.
Given the above findings, the Tribunal was satisfied that the parenting payment debt relating to the periods from 12 September 2017 to 24 April 2019 and from 3 August 2021 to 12 November 2021 was caused by sole administrative error on the part of Centrelink.
As to whether the Applicant received the payments in good faith in the periods 12 September 2017 to 24 April 2019 and 3 August 2021 to 12 November 2021, the Respondent noted that the following cases provide relevant commentary about how the Tribunal is to interpret the question of good faith.
In Secretary, Department of Education, Employment, Training and Youth Affairs v Barry Prince [1997] FCA 1565, the Federal Court stated that:
…Its concern is with the state of mind of a person concerning his or her receipt of the payment: if that person knows or has reason to know that he or she is not entitled to a payment received – ie is not entitled to use the moneys received as his or her own – that person does not receive the payment in good faith. Absent such knowledge or reason to know, the receipt would be in good faith.
In Haggerty v Department of Education, Training and Youth Affairs [2000] FCA 1287, the Federal Court noted (at [16]) that:
Consistently with what his Honour said in the Prince case, want of good faith will arise where there is a positive belief that the payment has been made by mistake. It will also arise where there is a suspicion held by the recipient that he or she may not be entitled to the payment made or a doubt as to the entitlement coupled with some objective basis for such suspicion or doubt.
The AAT in Panacci and Secretary, Department of Employment and Workplace Relations [2008] AATA 30 stated (at [25]) that:
An absence of good faith does not amount to fraudulent conduct on the part of the recipient of a benefit but it does mean that the recipient acts without an honestly held belief of entitlement to receive and retain the payment. The state of mind of the recipient must be examined and the test of good faith is entirely subjective.
The Applicant gave conflicting evidence about her understanding about her obligations to Centrelink and awareness of notices that had been sent to her. She initially gave evidence that she had estimated her partner’s annual income every year based on his work (for family tax benefit purposes), but later gave evidence that she didn’t know that any estimates of income would have an impact on her rate of payment. Her evidence that she doesn’t recall receiving any Centrelink notices was also in contrast to her later evidence that she would check all notices sent to her but had not noticed the relevant paragraph about her partner’s income.
Further, the Applicant asserted that she was unable to provide an estimate of her family’s income to the Tribunal. The Tribunal considered this was inconsistent with her involvement in the preparation of quotes and invoices for her partner’s business and had difficulty accepting she had no awareness of the family’s level of income. Later in the hearing, she gave evidence that her partner’s current income is $2,200 per annum. The Tribunal noted that this was inconsistent with the family’s capacity to maintain a mortgage and investment property, and inconsistent with her partner’s level of net income over several previous financial years. The Tribunal found the Applicant did not give evidence about her financial circumstances in a credible and frank manner.
The Tribunal found the Applicant gave her evidence about her understanding of her Centrelink obligations and her current financial circumstances in a manner that was lacking in credibility. The Tribunal inferred from the manner in which the Applicant gave her evidence that she had a greater level of awareness of her obligations than that claimed at hearing and of her own financial circumstances. The Tribunal found that there was an objective basis for the Applicant to be aware she was receiving the incorrect rate of parenting payment, being the notices sent to her reflecting an incorrect amount of annual income being maintained for her husband. During the debt period her husband’s income increased to over eight times the amount being maintained on the notices. Having considered the evidence before it in total, the Tribunal found that the payments received by the Applicant in the periods from 12 September 2017 to 24 April 2019 and from 3 August 2021 to 12 November 2021 were not received in good faith. The debt for these periods is unable to be waived under section 1237A of the Social Security Act.

No other portions of the parenting payment debt arose due to sole administrative error by Centrelink. The remaining portions of the parenting payment debt are also unable to be waived under section 1237A of the Social Security Act.

Can the debts be waived due to special circumstances of the Applicant?

Section 1237AAD of the Social Security Act (relevant to waiver of the parenting payment and Covid supplement debts) provides for waiver of a debt in the following circumstances:
The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a)   the debt did not result wholly or partly from the debtor or another person knowingly:
(i)   making a false statement or a false representation; or
(ii)   failing or omitting to comply with a provision of this Act, the Administration Act or the 1947 Act; and
(b)   there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c)   it is more appropriate to waive than to write off the debt or part of the debt.
Section 101 of the Family Assistance Administration Act (relevant to waiver of the family tax benefit and newborn supplement debts) provides the same requirements where a decision may be made to waive, although refers to a failure to comply with a provision of the family assistance law.
The Applicant did not provide any documents in relation to her circumstances. She gave evidence at the hearing that her partner is still self-employed. After stating that her partner’s annual income was $2,200, upon being questioned about the correctness of this, she stated she was unable to estimate her partner’s current level of income. She agreed she and her partner own their home and have an investment property which is rented out for $400 per week. The Applicant stated that she doesn’t work and her partner pays for everything but says he is very stressed.
As to her personal circumstances, the Applicant stated that she and her partner argue and the day prior to the hearing she ended up contacting the Police, although her partner returned and said he was sorry and that he had had too much stress. The Applicant stated she had not reached out to the police previously over concerns about her partner’s behaviour, but he tends to yell at her about cleaning around the house and they have had arguments in front of the children in the car.
The Applicant stated that she and her partner have three children together who are eight, five and three years of age. She was in hospital for her youngest child, who was born premature. The youngest child has a cyst on her liver and is currently being assessed by their doctor. Her parents are living in Adelaide and her mother has several cysts in her stomach. The Applicant stated she had arrived in Australia in 2013 after her father came from Pakistan by boat and sponsored the family.
The Respondent submits that none of the debts are able to be waived under the special circumstances provisions. The Respondent noted that, for waiver under this ground to be established, the Tribunal would need to be satisfied that the circumstances are unusual, uncommon or exceptional (Beadle and Director-General of Social Security (1984) 6 ALD 1) and are not only directed to the Applicant’s own circumstances, but are special circumstances that make it desirable to waive, including a consideration of the general administration of the social security system (Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114).
The Tribunal accepted there have been disagreements between the Applicant and her partner and is prepared to accept that the police were contacted during a recent disagreement. The Tribunal accepted the Applicant’s evidence that her youngest child has health concerns that are currently being assessed. The Tribunal considered that the Applicant’s claimed inability to describe her family’s current financial circumstances was inconsistent with her evidence that she was involved in invoicing for her partner’s business. The evidence before the Tribunal was, however, that the family is in a position of being able to maintain an investment property and the Tribunal inferred from this that the Applicant’s family is not facing any level of financial hardship at present.
Taking into account all of the matters raised by the Applicant, in addition to the manner in which the overpayments arose in this case, the Tribunal concluded that there are no special circumstances that make it desirable to waive the debts. The Tribunal finds that the parenting payment debt is unable to be waived under section 1237AAD of the Social Security Act and the family tax benefit and newborn supplement debts are unable to be waived under section 101 of the Family Assistance Administration Act. The debts are recoverable by Centrelink.

Interest charges

Section 1229A of the Social Security Act provides for an interest charge to be imposed where notice is given in relation to a debt, an amount remains unpaid on the day the debt is due to be paid and, at that time, there is no arrangement in effect in relation to the debt. Section 1229F of the Social Security Act, however, provides that an interest charge is not payable where the Tribunal is satisfied that the Applicant had a reasonable excuse for failing to enter into a payment arrangement or, having entered an arrangement, failing to make a payment in accordance with the arrangement.
In written submissions provided to the Tribunal, the Respondent noted that the Applicant had been issued a notice by Centrelink on 11 October 2022 relating to the parenting payment debt and indicating that the last day to repay the debt was 8 November 2022. The Respondent asserted that the debt was unpaid as of 8 November 2022, there was no repayment arrangement in effect and no amount had been repaid towards the debt at the time the submissions were prepared in March 2025.
The Respondent conceded in oral submissions at the hearing that the Applicant had spoken to Centrelink in November 2022 about a repayment plan and a temporary write off of the debt had been authorised. The Applicant then sought internal review by an authorised review officer in February 2023. The Respondent conceded that, given these contacts, it would be open to the Tribunal to find that section 1229F of the Social Security Act applies.
The Tribunal was provided a copy of the notice issued on 11 October 2022 and accepted that the notice set out an amount payable by the Applicant and that, in relation to the amount, the notice stated “Pay or set up an arrangement by 8 November 2022”. The notice indicated the following consequences for not doing so:
If you do not take action
You may be charged interest daily if you do not repay the debt in full or keep to a payment arrangement. This means you may have to pay more money. We may also have to consider other ways to get the money back.
The Tribunal had regard to the records of contact between the Applicant and Centrelink customer service staff and accepted from these that the Applicant discussed the debt with a customer service officer on 10 October 2022. The record of that contact reflects that the parenting payment and Covid supplement debts were explained to the Applicant and that she stated she understood the debts but was wanting a review. She was advised to wait until she received the debt letter and then she could request a formal review or explanation of the decision.
The Applicant contacted Centrelink on 4 November 2022. The record of the contact reflects that the contact was in relation to recovery action for the debt and that the Applicant had attended in person to discuss debt recovery. The record of contact notes that: “Referred to Debt Recovery Team because: Temp Written Off Debt(s) on OPDL”. On the same date, a withholdings arrangement was put in place in relation to the family tax benefit debts.
The Tribunal accepted that the records of contact also reflect the Applicant seeking an internal review of the parenting payment debt decision on 20 February 2023.
The notice sent to the Applicant about the parenting payment debt specified that she was required to pay the amount or set up an arrangement by 8 November 2022. Prior to this date, the Applicant had contacted Centrelink and Centrelink had agreed to write off the debt for a period of time. Once the parenting payment debt was written off, nothing else was required from the Applicant prior to 8 November 2022. The Tribunal finds that the Applicant had a reasonable excuse for failing to enter into a payment arrangement by 8 November 2022. As the circumstances set out in section 1229F of the Social Security Act are established, no interest charge is to be imposed. 022

Decision

The Tribunal sets aside the decisions under review and:

Makes a decision in substitution that there is a parenting payment debt of $68,854.37 for the period 22 August 2017 to 1 April 2022 that is recoverable by Centrelink;
Remits the family tax benefit and newborn supplement debts to Centrelink for recalculation, taking into account the Applicant’s qualification for parenting payment for part of the debt periods, with any amounts recalculated being recoverable by Centrelink; and
Makes a decision in substitution that no interest charges are to be imposed in respect of the parenting payment debt.

Date of hearing: 13 May 2025

Solicitors for the Applicant: Self-represented

Solicitors for the Respondent: Ms A Raveendiran

Date of hearing:	13 May 2025
Solicitors for the Applicant:	Self-represented
Solicitors for the Respondent:	Ms A Raveendiran