Wilton and Secretary, Department of Social Services (Social security)
[2025] ARTA 1767
•5 September 2025
Wilton and Secretary, Department of Social Services (Social security) [2025] ARTA 1767 (5 September 2025)
Applicant: Ms Wilton
Respondent: Secretary, Department of Social Services
Tribunal Number: 2025/S194813
Tribunal:General Member A Cichy
Place:Perth
Date:5 September 2025
Decision:The Tribunal sets aside the decision under review and, in substitution, decides that there are child care subsidy debts owed in the amounts of:
· $5,202.32 for the period 5 November 2018 to 30 June 2019,
· $1,456.37 for the period 1 July 2019 to 12 July 2020, and
· $6,283.45 for the period 13 July 2020 to 11 July 2021.
These debts are waived in their entirety pursuant to section 101 of the A New Tax System (Family Assistance) (Administration) Act 1999.
CATCHWORDS
SOCIAL SECURITY – child care subsidy – overpayment and subsidy debts – estimated and actual combined adjusted taxable incomes – department’s calculations correct – write-off –capacity to repay – recent redundancy and payout – looking for new work and possibility of applying for jobseeker payment – waiver – not incurred solely by administrative error – special circumstances – then-husband’s domestic violence, financial abuse continuing after separation and underestimates of income – no actual knowledge by applicant – credible evidence and documentation – department’s delay in raising and reviewing debts – decision under review set aside and substituted
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 subsections 161(1B) of the A New Tax System (Family Assistance) (Administration) Act 1999.
Statement of Reasons
BACKGROUND
This review is about whether Ms Wilton has been paid more than her correct entitlement to child care subsidy, whether she has incurred debts to the Commonwealth and, if so, whether such debts should be recovered from her.
The review relates to payments of child care subsidy paid to Ms Wilton from 2018 to 2021, across the 2018/19, 2019/20, and 2020/21 child care subsidy years.[1]
[1] There is a slight misalignment between financial years and child care subsidy years. This is because child care subsidy is calculated and paid in relation to child care subsidy fortnights (see Schedule 2 to the Act). Child care subsidy is paid for a particular child care subsidy year commencing on the first new child care subsidy fortnight after the start of the new financial year (1 July) and may, if the last child care subsidy fortnight of the year ends after 30 June, mean that part of the payment is received in the new financial year, but relates to the previous child care subsidy year.
Across these financial years, Ms Wilton was assessed as eligible for child care subsidy in relation to fees charged by child care services for care provided to [her child]. Ms Wilton’s rate of payment was based on estimates of combined adjusted taxable income that she provided to Centrelink.
After each financial year had ended, Ms Wilton’s entitlement to child care subsidy was reviewed. When her actual combined adjusted taxable income was compared with the estimates that she had provided to Centrelink, it was determined that she had been paid more than her correct entitlement to child care subsidy. Centrelink wrote to Ms Wilton to advise that she had incurred recoverable debts to the Commonwealth, as follows: on 30 June 2020, in the amount of $5,266.12 for the period 1 July 2019 to 12 July 2020 (debt number X8525164), on 5 April 2022 in the amount of $6,283.45 for the period 13 July 2020 to 11 July 2021 (debt number X8570006), and on 20 March 2023 in the amount of $3,177.17 for the period 5 November 2018 to 30 June 2019 (debt number X8493013)
Ms Wilton sought review of these decisions as follows: 21 March 2022 for debt X8525164, 8 April 2022 for debt X8570006 and 21 March 2023 for debt X8493013. On 13 May 2025, an authorised review officer of Centrelink affirmed all three decisions.
By application received on 29 May 2025, Ms Wilton asked the Administrative Review Tribunal to review the decision of the authorised review officer.
On 11 July 2025, the Tribunal ordered Centrelink to make submissions in relation to the calculation of the debts and to provide a copy of these submissions to the applicant. These were received by the Tribunal on 24 July 2025 (C1 to C42).
On 22 August 2025, the Tribunal conducted a hearing by MS Teams video at which Ms Wilton gave evidence under affirmation. The Tribunal had before it the relevant documents from Ms Wilton’s Centrelink file and computer records (307 pages), which had also been issued to Ms Wilton, as well as Ms Wilton’s submissions (A1 to A4).
LEGISLATION AND ISSUES
The statutory provisions relevant to this review are set out in the A New Tax System (Family Assistance) Act 1999 (the FA Act) and the A New Tax System (Family Assistance) (Administration) Act 1999 (the Administration Act).
The issues to be determined in this case are:
· Has Ms Wilton been paid more than her correct entitlement to child care subsidy and thereby incurred a debt to the Commonwealth? And, if so,
· Is there any reason why the debt should not be repaid?
Has Ms Wilton been paid more than her correct entitlement to child care subsidy?
Entitlement to child care subsidy is based on several factors, including the total amount of a person’s and their partner’s combined adjusted taxable income. A simplified outline of child care subsidy and eligibility is set out in section 85AA of the FA Act and the eligibility criteria are set out in detail in section 85BA of the FA Act.
The rate at which child care subsidy is payable is to be worked out in accordance with Part 1, Schedule 2 to the FA Act. Section 67DB of the Administration Act provides that a person’s rate of child care subsidy may be calculated using their estimate, an indexed estimate or indexed actual income. At the end of the financial year, a person’s estimate of their (and their partner’s) income is compared with their actual income, as reported to Centrelink by the Australian Taxation Office (ATO). The purpose of this reconciliation process is to compare the amount of child care subsidy the person was paid with the amount to which they were entitled. The reconciliation conditions are set out in section 103A of the Administration Act. If a person has received more child care subsidy than their entitlement, they will owe a debt; if a person has experienced an underpayment of child care subsidy, they may receive a top-up amount.
The Tribunal has reviewed Centrelink’s submissions in relation to the calculation of the debt. In brief, for each of the 2018/19, 2019/20, and 2020/21 child care subsidy years, Ms Wilton was paid child care subsidy on estimates of her combined adjusted taxable income that were below her actual combined adjusted taxable income for the year. In relation to the period 13 July 2020 to 30 May 2021, Centrelink submits that because Ms Wilton’s combined adjusted taxable income exceeded the relevant income threshold, she was unqualified to receive child care susbidy. In its submissions, Centrelink referred the Tribunal to pages in the hearing papers for supporting evidence of the income estimates, actual income and the different amounts of child care subsidy payable based on each of these.
Centrelink’s submissions include revised amounts for the overpayments of child care subsidy in the 2018/19 and 2019/20 child care subsidy years of $5,202.32 and $1,456.37 respectively. The calculation of the debt for the 2020/21 child care subsidy year remained unchanged at $6,283.45.
The Tribunal is satisfied on Centrelink’s submissions (and both the additional evidence that forms part of these submissions as well as the material referred to in the hearing papers) that at all relevant times, Ms Wilton was paid child care subsidy on the basis of estimates of her combined income that were lower than her adjusted taxable income.
The Tribunal did not identify any errors when it reviewed Centrelink’s calculations of Ms Wilton’s entitlement to child care subsidy as set out in its submissions, the amounts she received and the resultant overpayments for each of the 2018/19, 2019/20, and 2020/21 child care subsidy years.
Subsection 71C(1) of the Administration Act provides that if a person has been paid more than their correct entitlement of child care subsidy under the FA Act, then ‘the difference between the received amount and the correct amount is a debt due to the Commonwealth by the individual’.
The Tribunal finds that Ms Wilton has incurred child care subsidy debts to the Commonwealth of $5,202.32 for the period 5 November 2018 to 30 June 2019, $1,456.37 for the period 1 July 2019 to 12 July 2020, and $6,283.45 for the period 13 July 2020 to 11 July 2021.
Is there any reason why the debts should not be repaid?
There is an expectation, per Secretary, Department of Social Security v Hales [1998] FCA 219, that in the ordinary course, money paid to people under Australian social security and family assistance legislation to which they had no entitlement will be repaid to the taxpayer. There are some situations provided for in the Administration Act, however, for the writing off or waiving of debts, in sections 95, 97 and 101 respectively. Each of these will be considered by the Tribunal below.
Can the debts be written off pursuant to section 95 of the Administration Act?
Section 95 of the Administration Act provides for the writing off of a debt (that is, a temporary pause on its recovery) in particular circumstances.
Having considered the circumstances of the case against the legislative provisions in section 95 of the Administration Act, the Tribunal has determined that only those in paragraph 95(2)(b) are of relevance here. That is, should the Tribunal find that Ms Wilton has no capacity to repay the debts, the debts can be written off for a time.
In her application to the Tribunal, Ms Wilton stated that to now expect her to repay debts ‘is catastrophic to [her] current situation where [she] has no way of getting [her] ex‑husband to contribute or assist in repayment.’[2] When asked to comment upon this during the hearing, Ms Wilton told the Tribunal that her circumstances had changed more recently, and that her main submissions were as to the unfairness of having to repay the debts, given the time it had taken Centrelink to raise and review them, as well as the role of her ex-husband in creating the debts.
[2] Folio 1
Ms Wilton told the Tribunal that she was made redundant from her position of over 10 years on Wednesday and received a redundancy payout. She also said that she is currently looking for new work and hoped to obtain a new role sooner than she might need to apply for jobseeker payment. On this evidence, the Tribunal is not satisfied that Ms Wilton does not have the capacity to repay the debts and therefore cannot write off the debts pursuant to section 95 of the Administration Act.
Can all or part of the debts be waived pursuant to section 97 of the Administration Act?
The purpose of section 97 of the Administration Act is, within particular circumstances, to allow for a debt to be waived if it has occurred solely due to administrative error by the Commonwealth.
Having reviewed the documentation provided by Centrelink, the Tribunal is satisfied that the debts were not incurred through sole administrative error. The debts were raised when Ms Wilton’s estimated combined adjusted taxable income was reconciled with her actual combined adjusted taxable income and for no other reason. A waiver under subsection 97(1) of the Administration Act is therefore not possible.
Can all or part of the debts be waived pursuant to section 101 of the Administration Act?
Section 101 of the Administration Act provides that all or part of a debt may be waived in special circumstances, as follows:
The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a) the debt did not result wholly or partly from the debtor or another person knowingly:
(i) making a false statement or a false representation; or(ii) failing or omitting to comply with a provision of the family assistance law; and
(b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c) it is more appropriate to waive than to write off the debt or part of the debt.
Before considering whether the circumstances of a case are special circumstances, the Tribunal must first be satisfied that criteria in subsection 101(a) are satisfied, that is, that the debts did not arise wholly or partly from the debtor or another person knowingly making a false statement or representation. The Tribunal adopts the approach in Clifford and June Callaghan and Secretary, Department of Social Security [1996] AATA 413 (Callaghan at [48]) in its consideration of whether Ms Wilton made a false statement or representation ‘knowingly’:
There is nothing in section 1237AAD[3] 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.
[3] Section 1237AAD is the equivalent provision in the Social Security Act 1991 to section 101 of the Administration Act.
In her application to the Tribunal, Ms Wilton provided the following information:
I was married during the time the Child Care Subsidy overpayments were made. My now ex-husband was perpetrating well-documented domestic violence and financial abuse on me during this time (ADVO issued, multiple assault charges that he plead guilty to), and his actions stretched to underestimating his income to Centrelink during COVID…
… I fail to see how my situation was not a result of a my ex-husband making a 'false statement or representation or not complying with the provision of the Family Assistance Act or Family Assistance (Administration) Act'.[4]
[4] Folio 1
The information provided to the Tribunal is consistent with what is recorded in Centrelink’s own records from Ms Wilton’s contact with the agency on or about 26 May 2023:
Customer has advised that these debts were created during COVID at a time when her now ex -husband had lost his job and forced her to lower his income estimate as he wasn't working. Customer is a victim of DV and was at the time in an extremely coercive relationship. Her husband had financial control over her and she was unable to avoid the debt. He told her that he would help pay it but their relationship broke down and they are no longer together, and the divorce settlement for finances were done in November. He has refused to help pay these and because they were raised so late in the proceedings due to debt holds at Centrelink. It has stopped the customer from being able to collect this money from him. Had we, have raised these debts at the time. They would have been subject to their proceedings and she would not be responsible for all of them.[5]
[5] Folio 213
Ms Wilton told the Tribunal that her husband had lost employment during the COVID-19 pandemic. What he had not told her, however, was that he had only lost his base salary and continued to be paid commissions. She was unaware, throughout the relationship, that he continued to be paid commissions for his work into a separate bank account and remained unaware of this until legal proceedings in relation to the divorce were well underway. Furthermore, she told the Tribunal that her husband ceased working for approximately three months but then resumed work after that time. She said that she told him she wanted to revise their combined income estimate with Centrelink but he had refused to and said that they would deal with any resultant debt at the end of the year, noting also that she did not feel in a position to pursue the matter because of his coercive behaviour towards her. After that year, however, he provided her with a new income estimate for her to report to Centrelink.
The Tribunal has consulted the hearing papers and notes that Ms Wilton provided a new estimate of her and her former husband’s income to Centrelink on 13 July 2020 and that this estimate remained in place for the period 13 July 2020 to 29 November 2020.[6] Nonetheless, the Tribunal notes from Centrelink’s submissions that Ms Wilton’s estimates of income for both her and her ex-husband to Centrelink appear to have fallen within a more or less accurate range over the relevant periods. In relation to Ms Wilton’s evidence about her ex-husband’s refusal to allow her to update their combined income after his employment was reinstated, the Tribunal is not led to a finding that Ms Wilton made a knowingly false statement or omission in her reporting to Centrelink; it was a matter of Ms Wilton not having the information available to her to report to Centrelink rather than omitting or otherwise falsifying the information that she did report. The Tribunal finds that Ms Wilton did not have, per Callaghan, ‘actual’ knowledge of her then-husband’s false statements. This distinguishes the case from the circumstances in Re U'Brien and Secretary, Department of Social Services [2014] AATA 761, in which the Tribunal found that the discretion afforded in section 1237AAD of the Social Security Act 1991 (the equivalent provision to section 101 of the Administration Act) could not be extended to situations where a person knowingly makes a false statement under duress. On Ms Wilton’s evidence and that contained in the Centrelink submissions, the Tribunal is satisfied that Ms Wilton used her best efforts to provide accurate income estimates to Centrelink over the period and did not make knowingly false statements or omissions in this regard.
[6] Folio 92
The wording of subsection 101(a) of the Administration Act in relation to false representations made by a third party has been considered previously by the Administrative Appeals Tribunal (as it then was) in the cases of Re Rahi and Secretary, Department of Education, Skills and Employment [2021] AATA 1490 (Rahi) and Secretary, Department of Family and Community Services v Ellis [2000] AATA 350 (Ellis). In Rahi, the applicant contended that an unknown person had impersonated her and provided incorrect information to Centrelink; in Ellis, another unknown person had fraudulently represented themselves to be the applicant and claimed a social security payment while he was incarcerated. On both occasions, the Tribunal found that because a third party made a false representation to Centrelink and that false representation had caused all or part of the debt, a waiver of the debt pursuant to section 101 of the Administration Act (or the equivalent provision in the Social Security Act 1991) could not be exercised.
The circumstances of this case are different to both those in Rahi and Ellis. Here, the only person to have made representations to Centrelink that caused the debt was Ms Wilton herself. She made those representations on the basis of information provided to her by her then-husband. She had no way of verifying the information he provided to her and on her evidence he did not fully disclose his financial information to her during the relevant period. The Tribunal has already found that Miss Wilton did not make any knowingly false representations that resulted in the debts. The Tribunal accepts that Ms Wilton’s then-husband made knowingly false representations to her and that, relying upon these representations, she in turn reported incorrect information to Centrelink. The false representations in the cases of Rahi and Ellis were both made directly to Centrelink, rather than to Centrelink through a third party that had no knowledge of their falsehood. The effect of vicariously imputing a false representation made a third party to a debtor, who had in turn conveyed the information with no knowledge of its falsehood, would therefore run contrary to the decided cases on the matter. Its effect would be to make a debtor responsible for any knowingly false information provided to them by a third party but of which they themselves were unaware. Following this reasoning, the Tribunal is satisfied that because Ms Wilton’s ex-husband did not contact Centrelink and make a false representation directly, he cannot be held to have made knowingly false statements vicariously through Ms Wilton.
The Tribunal will therefore proceed to consider whether the circumstances of this case are special circumstances for the purposes of section 101 of the Administration Act.
Subsection 101(b) requires the Tribunal to consider, in contemplating waiving all or part of a debt, whether a person’s circumstances are special circumstances and whether it is desirable to waive the debts in view of these particular special circumstances.
The term ‘special circumstances’ is not defined in the Administration Act but has been considered on a number of occasions by the former Administrative Appeals Tribunal and the Federal Court. The decision in Beadle and Director-General of Social Security [1984] AATA 176 (at [12]) describes special circumstances thus:
An expression such as "special circumstances" is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.
In Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25, the Federal Court indicated, however, that to confine special circumstances to those circumstances that were ‘exceptional’ would be contrary to the legislative intentions of Parliament. Nonetheless, there must be some element that distinguishes the case from the ordinary or usual run of cases (Groth v Secretary, Department of Social Security [1995] FCA 989 at [545]).
Deputy President Forgie (as she then was) considered the manner in which desirability to waive in the context of special circumstances must be weighed against the general administration of the social security system (in Davy and Secretary DEWR [2007] AATA 114 at [80]) as follows:
The “special circumstances” are not merely directed to the person’s own circumstances. Rather, they are directed to those that are “special 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. Waiver of the debt would mean that Mr Davy would have had the benefit of part of his DSP in circumstances in which he was not entitled to it … He has had the benefit of the money and there is no injustice in requiring him to repay the money of which he has had the benefit but not the entitlement.
The Tribunal must therefore consider whether the circumstances in Ms Wilton’s case are special circumstances and, if so, it must weigh whether, in the circumstances, it would be unjust to require her to repay the amount that she received in child care subsidy but to which she had no entitlement.
Ms Wilton’s pre-hearing submissions with respect to the special circumstances of her case were as follows:
(a) She was married at the time the child care subsidy payments were made and her now ex-husband was perpetrating domestic violence and financial abuse on her.
(b) Her husband had pleaded guilty to assault on her.
(c) Her ex-husband’s actions extended to underestimating his income for provision to Centrelink.
(d) He had taken the entire balance of his and Ms Wilton’s bank account when they separated.
(e) She believes it is unfair to be burdened with this ‘huge’ debt on her own, following domestic violence.
(f) The key findings in the letter of the Centrelink authorised review officer did not identify any special circumstances in the case, but Ms Wilton failed to see how the domestic violence she experienced could not constitute special circumstances.
During the hearing, Ms Wilton provided further evidence regarding her circumstances (in addition to the matters already described in paragraph 39 above) as follows:
(a) She was subject to financial abuse during her marriage.
(b) Her separation from her husband occurred in the context of his removal from the family home by police.
(c) Her ex-husband was charged with three counts of assault in relation to her.
(d) Her ex-husband, after removal from the family home, was subject to an AVO and could not approach her after this time.
(e) Financial abuse of Ms Wilton continued after the separation. Apart from taking all the funds that were in their joint bank account, her ex-husband refused to make any payments on the mortgage and refused to assist with any household expenses.
(f) She has subsequently become an advocate for victims of financial abuse.
(g) In divorce proceedings, her ex-husband had refused to bear half of the cost of the Centrelink child care subsidy debts that had been raised.
The Tribunal found Ms Wilton to be a thoroughly credible witness. The Tribunal notes in particular the consistency of her oral evidence with her pre-hearing submissions and the comprehensiveness of her responses to the Tribunal’s questions (even when it may have served her own interests better to be less forthcoming) as strong indicators of her transparency as to the matters before the Tribunal. She made serious attempts during the hearing to obtain further documentary evidence in support of her claims and corrected any mistakes that she made in her evidence as soon as she was aware of them. The Tribunal therefore accepts her evidence in its entirety.
Having considered the circumstances of this case against the relevant legislative provisions and decided cases, the Tribunal is satisfied that they meet the threshold to be considered special circumstances. The complex matrix of domestic violence, financial control and deception by Ms Wilton’s ex-partner regarding his actual income, which has left her with sole responsibility for debts that were clearly not within her own capacity to control, puts this case out of the ordinary or usual run of cases of recipients of family assistance payments. Furthermore, the Tribunal is satisfied that the special circumstances of this case make it desirable to waive the debts and that this is consistent with the avoidance of the kinds of harsh and unjust outcomes that the exercise of the discretion afforded in the Administration Act is designed to prevent. For the same reasons, the Tribunal considers it more desirable to waive the debts than to write them off. The Tribunal will therefore waive the debts in their entirety pursuant to section 101 of the Administration Act.
DECISION
The Tribunal sets aside the decision under review and, in substitution, decides that there are child care subsidy debts owed in the amounts of:
$5,202.32 for the period 5 November 2018 to 30 June 2019,
$1,456.37 for the period 1 July 2019 to 12 July 2020, and
$6,283.45 for the period 13 July 2020 to 11 July 2021.
These debts are waived in their entirety pursuant to section 101 of the A New Tax System (Family Assistance) (Administration) Act 1999.
| Date of hearing: | Friday, 22 August 2025 |
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