Underwood and Secretary, Department of Social Services (Social security) - [2025] ARTA 652

Underwood and Secretary, Department of Social Services (Social security) [2025] ARTA 652 (17 February 2025)

Applicant: Underwood

Respondent: Secretary, Department of Social Services
Chief Executive Centrelink

Tribunal Numbers: 2024/M191522 and 2024/M191720
Tribunal: Member K Hamilton
Place:Brisbane
Date:17 February 2025
Decision:The Tribunal:
1.affirms the decision to raise and recover a debt of $10,274.76 for overpayment of carer payment in the period 28 December 2022 to 24 October 2023;
2.affirms the decision to raise and recover a debt of $1,363.05 for overpayment of parenting payment in the period 24 January 2024 to 26 February 2024;

3.affirms the decision to raise and recover a debt of $725.25 for overpayment of carer allowance in the period 25 October 2023 to 2 January 2024; and

4.sets aside the decision to raise and recover a debt of $5,979.92 for overpayment of carer payment in the period 25 October 2023 to 2 January 2024 and remits that decision for reconsideration in accordance with the orders that:

·Miss Underwood owes a debt of $5,979.92; and
·The amount of $1,500 is to be waived from that debt on the basis of special circumstances.

CATCHWORDS

SOCIAL SECURITY – Carer Payment, Carer Allowance and Parenting Payment – overpayment and debt recovery – temporary cessation of care – adult child’s incarceration exceeding allowable period not notified – decisions affirmed – employment income – casual, permanent part-time and short-term work – varied income deliberately under-reported – waiver of debts – special circumstances – personal circumstances and general administrative considerations – other children, health and car accident – debts to tax office, utility and others – new payment for younger child – debt waived in part – decision under review set aside and remitted

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted from this decision and replaced with generic information pursuant to subsection 201(1A) of the Social Security (Administration) Act 1999.

Statement of Reasons

BACKGROUND

These matters concern two decisions made by Services Australia – Centrelink (Centrelink) to:
· Raise and recover a debt of $5,979.92 for overpayment of carer payment (CP) and a debt of $725.25 for overpayment of carer allowance (CA) in the period 25 October 2023 to 2 January 2024; and
· Raise and recover a debt of $10,274.76 for overpayment of CP in the period 28 December 2022 to 24 October 2023 and a debt of $1,363.05 for overpayment of parenting payment (PP) for the period 24 January 2024 to 26 February 2024.
Prior to 2 January 2024, Miss Underwood was in receipt of CP and CA in respect of care she provided to her adult son, [Mr A]. Miss Underwood also received an additional payment of CA in respect of care she provided to another child (a minor).
[Mr A] was incarcerated from 6 July 2023 to 15 August 2023. He was again incarcerated on 30 September 2023.
On 12 January 2024, Centrelink cancelled Miss Underwood’s CP and CA with effect from 25 October 2023, on the basis that her 63 days of “respite care” had been reached on 24 October 2023, and she was therefore no longer qualified for CP and CA, in respect of [Mr A], from 25 October 2023.
On 12 January 2024, Centrelink granted Miss Underwood’s claim for PP, with effect from 12 January 2024.
On 3 June 2024, Centrelink raised debts against Miss Underwood of $10,274.76 for overpayment of CP in the period 28 December 2022 to 24 October 2023 and $1,363.05 for overpayment of PP in the period 24 January 2024 to 26 February 2024, on the basis that the correct amount of her employment income had not been taken into account in calculating her rate of payment.
On 5 September 2024 Centrelink raised debts of $5,979.92 (for CP) and $725.25 (for CA) for amounts paid to Miss Underwood from 25 October 2023 to 2 January 2024.
Miss Underwood sought internal review of both decisions and on 17 September 2024 a Centrelink authorised review officer (ARO) affirmed both decisions.
Miss Underwood then applied to the Administrative Review Tribunal (the Tribunal) seeking independent review of both decisions.
A hearing was held on 4 February 2025. Miss Underwood participated in the hearing by telephone. The Tribunal had regard to:
· relevant documents provided by Centrelink in matter number 2024/M191522 (the CP and CA debts), numbered 1–159; and
· relevant documents provided by Centrelink in matter number 2024/M191720 (the CP and PP debts), numbered 1–355.

ISSUES

The statutory provisions relevant to this review are contained in the Social Security Act 1991 (the Act).
The issues which arises in this case are:
·      Was Miss Underwood qualified to receive CP and CA after 25 October 2023?
·      Was Miss Underwood overpaid CP and PP, having regard to her earnings from employment?
·      Is there any basis on which any part of the debts should not be recovered?

CONSIDERATION

Issue 1 – Was Miss Underwood qualified for CP and CA in the period 25 October 2023 to 2 January 2024?

Section 954 of the Act sets out the qualification criteria for CA where care is provided in a private home that is shared by the care receiver and the person claiming CA (the care provider). It relevantly requires that:
· the care receiver has been assessed and rated under the Adult Disability Assessment Tool and given a score under that assessment tool of at least 30, being a score calculated on the basis of a professional questionnaire score of at least 12; and
· the care provider provides care and attention to the care receiver on a daily basis.

Section 957 of the Act provides that a person can continue to receive CA during periods where their care of the care receiver has temporarily ceased. However, the total periods of such temporary cessations of care cannot exceed 63 days in any calendar year.
Section 198 of the Act sets out the qualification requirements for CP. It relevantly requires that:
·      the care receiver has been assessed and rated under the Adult Disability Assessment Tool and given a score under that assessment tool of at least 25, being a score calculated on the basis of a professional questionnaire score of at least 10;
·      the care provider provides “constant care” to the care recipient; and
·      the care is provided in a private residence that is the home of the care receiver.
Section 198AC of the Act provides that a person can continue to receive CP during periods where their care of the care receiver has temporarily ceased. However, the total periods of such temporary cessations of care cannot exceed 63 days in any calendar year.
Centrelink determined that Miss Underwood had ceased to be qualified for CP and CA from 25 October 2023 as her son [Mr A] had been incarcerated for periods that exceeded the 63 days of allowable temporary cessation of care in a calendar year.
Miss Underwood did not dispute the dates on which [Mr A] was incarcerated. She told the Tribunal that she was unfamiliar with the rules and thought that her respite days accumulated from year to year. She also said that this was the first time [Mr A] had been incarcerated. Miss Underwood continued to pay [Mr A]’s rent so he could keep his government housing, paid other bills for [Mr A], including his mobile phone bill, and was also sending money to him in prison so he could buy necessities. She did not realise that she was not entitled to CP and CA and had so much going on that she did not think to advise Centrelink of [Mr A]’s incarceration.
The period of [Mr A]’s first incarceration was 39 days. Following [Mr A]’s next incarceration on 30 September 2023, Miss Underwood’s 63 days of allowable temporary cessation of care for [Mr A] were used up as at 24 October 2023. I am satisfied that Miss Underwood therefore exceeded the allowable period of temporary cessation of care on 25 October 2023, and she was not qualified for CA or CP from that date with respect to care provided to [Mr A].
I am satisfied that Miss Underwood was overpaid CA and CP in the period 25 October 2023 to 2 January 2024 and the debts have been correctly calculated by Centrelink.

Issue 2 – Was Miss Underwood overpaid CP and PP?

Section 210 of the Act provides that a person’s rate of CP is to be worked out by using the Pension Rate Calculator A set out at the end of section 1064 of the Act.
Section 503 of the Act provides that a person’s rate of PP, if the person is not a member of a couple, is to be worked out using the Pension PP (Single) Rate Calculator set out at the end of section 1068A of the Act.
Under each of these rate calculators, a person’s rate of payment is reduced having regard to the person’s ordinary income. Ordinary income is defined by section 8 of the Act as income that is not maintenance income or an exempt lump sum, and so includes a person’s income from employment. Any amount of ordinary income that exceeds the relevant ordinary income free limit will result in a reduction to the person’s rate of payment.
Miss Underwood told the Tribunal that she commenced a permanent part-time position with [Employer 1] in December 2022. Prior to this, she was employed by [Employer 1[on a casual basis. Miss Underwood said she also worked for a short term for another employer, [Employer 2], during the [Employer 1] summer break over December 2022 to January 2023. She had no other employers during the relevant debt periods.
Miss Underwood told the Tribunal that she understood that her rate of payment was dependent upon her income and that she was aware of her reporting requirements. She accepted that the income figures that Centrelink has used to calculate her debts, which Centrelink verified with her employers, would be correct. Miss Underwood also agreed that the income that she declared to Centrelink was incorrect for a number of fortnights during the relevant debt periods.
Miss Underwood told the Tribunal that on multiple occasions she altered the amount of her fortnightly income when asked by Centrelink to verify income that had been reported by her employers. Centrelink’s papers contain a number of documents recording online activity by Miss Underwood to vary her income downwards in particular periods. For example:

On 16 May 2023, she varied her income to $449.32, however her actual income for the relevant pay fortnight (with a pay date of 3 May 2023) was $1,949.32;
On 13 June 2023, she varied her income to $608.66, however her actual income for the relevant pay fortnight (with a pay date of 31 May 2023) was $2,608.66;
On 27 June 2023, she varied her income to $1,469.84, however her actual income for the relevant pay fortnight (with a pay date of 14 June 2023) was $1,769.84;
On 8 August 2023, she varied her income to $401.12, however her actual income for the relevant pay fortnight (with a pay date of 26 July 2023) was $1,401.12;
On 22 August 2023, she varied her income to $401.12, however her actual income for the relevant pay fortnight (with a pay date of 9 August 2023) was $1,401.12;
On 5 September 2023, she varied her income to $331.84, however her actual income for the relevant pay fortnight (with a pay date of 23 August 2023) was $1,474.86;
On 18 September 2023, she varied her income to $401.12, however her actual income for the relevant pay fortnight (with a pay date of 6 September 2023) was $1,401.12;
On 3 October 2023, she varied her income to $285.48, however her actual income for the relevant pay fortnight (with a pay date of 20 September 2023) was $1,585.48;
On 31 October 2023, she varied her income to $201.12, however her actual income for the relevant pay fortnight (with a pay date of 18 October 2023) was $1,401.12.

Miss Underwood said that she had often changed the amount of income she reported to Centrelink because she needed extra money in those fortnights. Miss Underwood said she had been in an abusive relationship from 2016 to 2021. Her partner never lived with her, however he continuously demanded money from her. That relationship ended when her partner was incarcerated. His financial abuse left her in a precarious financial position. She said that she underdeclared her income to Centrelink because she needed extra money to try to get back on top of her finances.
Miss Underwood also said that she had been told by a Centrelink officer that when she was required to verify her employment income each fortnight, she was able to change the amount of her earnings, and if she was overpaid it would be taken from her tax at the end of the financial year.
Part 3.10, Division 1AA of the Act requires that, where a person’s rate of payment is worked out with regard to any income test set out in a rate calculator in Chapter 3 (which includes sections 1064 and 1068A of the Act), the person’s income is to be taken into account in the instalment period in which that income is paid. A person is required to declare income from all sources and, in particular, is required to accurately declare the amount of any earnings from employment.
The advice that Miss Underwood alleges she was given by a Centrelink officer is so obviously contrary to the fundamental requirements placed on a recipient of social security benefits to correctly report their income, and to the manner in which the social security legislation requires ordinary income to be taken into account in assessing a person’s rate of pension, as to defy credulity.
I do not consider that Miss Underwood was deliberately untruthful in her evidence to the Tribunal. However, I do consider it likely that Miss Underwood was mistaken as to the effect of what she may have been told by the Centrelink officer she spoke with.
The Tribunal has examined the debt calculations provided by Centrelink and has not identified any error in those calculations. Centrelink has properly taken into account the correct amount of Miss Underwood’s earnings, as reported by her employer, in each instalment fortnight in which she was paid her salary: section 1073A of the Act.
I find that Miss Underwood was overpaid CP in the period 28 December 2022 to 24 October 2023 and PP in the period 24 January 2024 to 26 February 2024, having regard to her actual income from employment. I am satisfied that the amount of those debts has been correctly calculated by Centrelink.

Issue 3: Can recovery of the debts be waived?

Section 1237 of the Act provides that there are only limited circumstances in which a properly raised debt may not be recovered.
There are two provisions which allow a debt to be waived, in whole or in part. To waive a debt means that the part of the debt that is waived does not have to be repaid at all.
Section 1237A of the Act allows waiver of a debt where the debt has arisen solely due to administrative error on the part of the Commonwealth, and where the debtor receives payments in good faith.
None of Miss Underwood’s debts arose due to administrative error. Her CP and CA debts for the period 25 October 2023 to 2 January 2024 arose as a result of Miss Underwood’s failure to advise Centrelink that her son had been incarcerated. Her CP and PP debts for the period 28 December 2022 to 24 October 2023 and 24 January 2024 to 26 February 2024 arose as a result of Miss Underwood failing to correctly declare her employment income. The debts therefore cannot be waived under section 1237A of the Act.
Section 1237AAD of the Act is a discretionary waiver provision that can be applied where “special circumstances” exist, and it is more appropriate to waive than write off recovery. In order for a debt to be waived on the basis of special circumstances, the debt cannot have arisen wholly or partly from the debtor knowingly making a false statement or a false representation, or knowingly failing or omitting to comply with their Centrelink obligations.
What amounts to a “knowing failure” was considered by the Administrative Appeals Tribunal (AAT) in the matter of Callaghan and Secretary Department of Social Security [1996] AATA 413, where the AAT said [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 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 of the act or omission.
However, in Cox and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 350, the AAT considered that actual knowledge could be inferred in certain circumstances, stating [at 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 CP debt and PP debt arising due to Miss Underwood’s earnings

In relation to the debts of CP and PP that arose due to Miss Underwood failing to correctly declare her employment income, I am satisfied, on the basis of Miss Underwood’s evidence to the Tribunal, that she was aware that she needed to report her income and that her rate of payment was required to be calculated having regard to her income.
Miss Underwood’s own evidence was that she deliberately under-reported her income on multiple occasions in order to increase the amount of pension she would receive in that fortnight. Regardless of Miss Underwood’s underlying reasons for such deception, I cannot reach any other conclusion but that she knowingly made a false declaration of her income to Centrelink.
Ttherefore no part of the CP debt for the period 28 December 2022 to 24 October 2023 or the PP debt for the period 24 January 2024 to 26 February 2024 can be waived on the basis of special circumstances.

The CP and CA debts arising due to period of allowable absences being exceeded

The CP and CA debts for the period 25 October 2023 to 2 January 2024 arose as a result of Miss Underwood losing qualification for CP and CA due to [Mr A]’s incarceration. I note that Centrelink’s records show that Miss Underwood was sent multiple letters, both prior to and during the relevant debt period, notifying her of the requirement to advise Centrelink “if you, your partner or the person for whom you provide care are sent to prison or charged with an offence and are in custody on remand.”
Miss Underwood said she did not read letters sent to her on myGov and was unaware of the requirement to notify Centrelink of [Mr A]’s incarceration. Miss Underwood said that when [Mr A] was incarcerated, it was a very distressing time for her. She said she had so much going on that it didn’t cross her mind that she needed to let Centrelink know.
I accept that Miss Underwood was genuinely confused about her obligation to inform Centrelink, and her continued entitlement to CP and CA, in the event that [Mr A] was incarcerated. I also accept that this was a particularly difficult time for her and she did not turn her mind to her obligations to advise Centrelink of [Mr A]’s incarceration. I am satisfied that the application of section 1237AAD to the debts arising as a result of Miss Underwood losing qualification to CP and CA due to [Mr A]’s incarceration is not excluded on the basis of any knowing failure on Miss Underwood’s part.
For special circumstances to exist, there needs to be something which distinguishes a person’s case from the ordinary or usual case – see Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25. The starting position is that overpaid Commonwealth monies should generally be recovered.

In Davy and Secretary, Department of Employment and Workplace Relations (2007) AATA 1114, it was noted that:
special circumstances are not merely directed to the person’s own circumstances. Rather they are directed to those that are ‘special enough circumstances ... that make it desirable to waive’. That necessarily requires a consideration of the person’s individual circumstances but also a consideration of the general administration of the social security system.
Miss Underwood told the Tribunal that she has six children, two of whom are still of school age. She has experienced family domestic violence in at least two of her relationships. Miss Underwood went bankrupt after her marriage broke down. Her ex-husband then committed suicide in 2019. Another partner, whom she separated from in 2021, was abusive and continuously demanded money from her, which left her in a very difficult financial position.
When [Mr A] went to gaol, her younger son, who was very close to [Mr A], experienced a significant decline in his mental health. He did not go to school for 12 months. He has not gone back to school and Miss Underwood is now homeschooling him. Her son has been diagnosed with PTSD, due to trauma from his exposure to family violence, schizophrenia and ADHD. Her son sees a psychologist, which is currently funded through Victims of Crime. Miss Underwood said once this funding runs out (after another three to four sessions), she will not be able to continue to afford psychology sessions for her son.
Miss Underwood and all of her children suffer from severe [condition]. Miss Underwood has fortnightly injections to help control her [condition] and has higher than average utility bills as she needs to maintain a temperature under 24 degrees Celsius. The whole family require special cleansers and creams from the chemist, which are very expensive, costing around $118 per week. Miss Underwood also suffers from allergies requiring her to regularly use anti-histamines and eye drops.
Miss Underwood remains employed part-time, earning approximately $1,500 gross per fortnight. However, she said that she is not currently working as she is on sick leave after being injured in a car accident. She is waiting to be advised by her insurer whether her car will be written off. She does not have sufficient insurance to cover the balance of her car loan, which is $22,000. Her car was only insured for a market value of $12,500. She also owns an older vehicle, worth about $2,500.
Miss Underwood also receives Centrelink benefits of around $1,200 per fortnight. She said she has no money in the bank.
Miss Underwood provided a statement of financial circumstances which discloses that she owes around $7,000 to her electricity provider, which she is paying off at a rate of $100 per fortnight under a payment plan. There are various other small debts of less than $1,000. Miss Underwood told the Tribunal that she also owes $3,500 to the Australian Taxation Office, for which she is currently negotiating a payment plan. Her expenses each fortnight, including repayments on her various debts, exceed her total fortnightly income. However, it is noted that some of the smaller debts are being paid off by Miss Underwood at a rate that would see those debts cleared within a couple of months.
Miss Underwood told the Tribunal that she had been told by Centrelink, once Centrelink became aware of [Mr A]’s incarceration, that she could be put on CP in respect of her other child and there would not be any debt. However, as Miss Underwood was in receipt of CP (adult), she was required to make a new claim for CP (child) and provide supporting medical documentation in order to assess her qualification to receive CP in respect of her other child. Miss Underwood lodged such a claim and was granted CP (child) from 27 February 2024.
It is very likely that Miss Underwood, had she applied for CP (child) earlier, when [Mr A] was first incarcerated, would have been qualified to receive CP in respect of her other child. Miss Underwood’s notional entitlement to CP during the period 25 October 2023 to 2 January 2024 is a relevant factor which, along with her other circumstances noted above, may be considered in determining whether “special circumstances” exist.
It is, however, clear that Miss Underwood would not have been entitled to the full rate of CP in this period due to her employment income. It is evident that Miss Underwood was consistently under-reporting her income by a significant amount throughout 2023, including up to the end of October 2023. There is no evidence of her reported or actual earnings between 1 November 2023 and 10 January 2024.
As the CP debt for this period was raised on the basis that Miss Underwood was not qualified for CP, the whole of the amount paid to her has been raised as a debt and Centrelink’s debt calculations therefore do not give any indication of Miss Underwood’s actual income during this period and the corresponding reduction in her entitlement each fortnight.
It is likely that Miss Underwood continued to under-report her income throughout this period and therefore the rate of CP that she was paid in the period 25 October 2023 to 2 January 2024 would be more than her true entitlement. Based on Miss Underwood’s actual income and rate of payment in the fortnights prior to the relevant debt period, I estimate that Miss Underwood would have been notionally entitled to CP of only approximately $200 to $300 per fortnight on average.
Miss Underwood was not entitled to receive CA in respect of care she provided to [Mr A] in this period. As she was already in receipt of CA for her younger child at this time, there is no notional entitlement to another payment.
I find that it is appropriate to waive the amount of $1,500 from Miss Underwood’s CP debt for the period 25 October 2023 to 2 January 2024 under section 1237AAD of the Act. I take into account Miss Underwood’s notional entitlement to CP (child) during the debt period as well as her difficult personal circumstances outlined above.
The whole of the CA debt for the same period is to be recovered in full.
Section 1236 of the Act allows for the “write off” of the recovery of a debt for a stated period or otherwise. It is typically applied where a debtor has no capacity to repay a debt. Miss Underwood remains employed and in receipt of Centrelink payments. I am satisfied that it is not appropriate to write off any part of the debts as recovery by way of deductions from Miss Underwood’s Centrelink payments at a manageable rate would not cause her undue hardship.

DECISION
The Tribunal:

affirms the decision to raise and recover a debt of $10,274.76 for overpayment of carer payment in the period 28 December 2022 to 24 October 2023;
affirms the decision to raise and recover a debt of $1,363.05 for overpayment of parenting payment in the period 24 January 2024 to 26 February 2024;
affirms the decision to raise and recover a debt of $725.25 for overpayment of carer allowance in the period 25 October 2023 to 2 January 2024; and
sets aside the decision to raise and recover a debt of $5,979.92 for overpayment of carer payment in the period 25 October 2023 to 2 January 2024 and remits that decision for reconsideration in accordance with the orders that:
·Miss Underwood owes a debt of $5,979.92; and
·The amount of $1,500 is to be waived from that debt on the basis of special circumstances.

Date(s) of hearing:	Tuesday, 4 February 2025
Representative for the Applicant:	Self