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

WPCF and Secretary, Department of Social Services (Social services second review) [2020] AATA 887 (20 April 2020)
Division:GENERAL DIVISION
File Number(s): 2019/3772
Re:WPCF
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Mr S Evans, Member
Date:20 April 2020
Place:Sydney

The decision under review, being the decision of the Social Services and Child Support Division made 16 May 2019, is affirmed.
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Mr S Evans, Member
CATCHWORDS
SOCIAL SECURITY – child care benefit – child care rebate – overpayment – debt – whether entitled to payments – whether Applicant was entitled to maximum hours of child care benefit and child care rebate – whether Applicant satisfies the work/training/study test – whether debt should be written off or waived – decision under review affirmed
LEGISLATION
A New Tax System (Family Assistance) Act 1999 (Cth)
A New Tax System (Family Assistance) (Administration) Act 1999 (Cth)
CASES
Davy v Secretary, Department of Employment and Workplace Relations [2007] AATA 1114
Secretary, Department of Social Security v Coralie Hales [1998] FCA 219
SECONDARY MATERIALS
Family Assistance Guide (2016) Topic 2.6.3.10
REASONS FOR DECISION
Mr S Evans, Member
20 April 2020

WPCF (“the Applicant”) received Child Care Benefit (“CCB”) and Child Care Rebate (“CCR”) for the 2013/14, 2014/15, 2015/16 and 2016/17 financial years (“the debt period”). The benefits were paid on the basis that the Applicant satisfied the requirements to be eligible for 50 hours of child care per week.
On 16 May 2019 the Social Services and Child Support Division of this Tribunal (“AAT1”) affirmed a decision of the Secretary of the Department of Social Services (“the Respondent” or “Centrelink”) that the Applicant was not entitled to more than 24 hours of child care per week and consequently had CCB and CCR debts amounting to $64,461.78. The AAT1 also determined that there was no basis upon which the debts may be waived.
The Applicant has applied to the General Division of the Administrative Appeals Tribunal for a review of the decision of the AAT1. The matter was heard on 16 January 2020. The Applicant appeared in person and was self-represented.
For the reasons which follow, the decision under review will be affirmed.
BACKGROUND
Child care benefit for approved care is limited to 24 hours per week per child. Applicants may be exempt from the 24 hour CCB limit, so that it may be increased to 50 hours per week per child (“the maximum allowance”), in circumstances where an applicant meets the “work/training/study” test (“the test”). The test provides for individuals that are undertaking activities relating to work, training or study to have access to 50 hours of child care benefit. There are strict criteria as to which activities qualify in order to meet the test.
The Applicant and her husband have four children who were born between 2004 and 2013. The eldest of their children passed away unexpectedly in May 2018.
The Applicant placed all four of her children in child care from 2013. It is not disputed by the Applicant that she received the child care services and benefits in question.
At the time of the hearing the Applicant and her husband had been separated for two months. The Applicant told the Tribunal that she did not work after the birth of her first child in 2004 and her husband worked part time.
The Applicant contends that she should have to pay the debt. She understood that she was eligible for the maximum allowance of child care and that any debt which has been accrued in relation to her exceeding her entitlement is the responsibility of Centrelink. Furthermore, she argues that if it is determined that she was ineligible for the maximum allowance her personal financial circumstances are such that the debt should be waived.
LEGISLATIVE FRAMEWORK
Eligibility for the CCR during the debt period was determined by the A New Tax System (Family Assistance) Act 1999 (“the FA Act”) and the A New Tax System (Family Assistance) (Administration) Act 1999 (“the FA Admin Act”). It is noted that reference to the law in this decision is to the law that was in force during the debt period, as the FA Act and FA Admin Act have since been amended.
Section 53 of the FA Act outlines the weekly limit of hours for fee reduction claimants. It provides that a limit of 24 hours applies to a CCB claimant if a limit of 50 hours does not apply. Section 54 outlines the circumstances where a limit of 50 hours applies. Relevant to the Applicant’s circumstances, subsection 54(2) provides that a limit of 50 hours in the week applies if the claimant and the claimant’s partner satisfy the “work/training/study” test.
The work/training/study test is set out at section 14 of the FA Act and is supplemented by sections 15-17.
Section 14(1) of the Act provides that an individual will satisfy the “work/training/study test” if:
(a) the individual has recognised work or work related commitments; or
(b) the individual has recognised training commitments; or
(c) the individual has recognised study commitments.
Section 15 of the FA Act provides that a person has recognised work or work related commitments if he or she is in paid work, receives carer payment or receives carer allowance.
Section 16 of the FA Act provides that a person has recognised training commitments if he or she is undertaking a training course for the purpose of improving his or her work skills and/or employment prospects.
Subsection 17(1) of the FA Act provides that a person has recognised study commitments if he or she:
(a)       receives youth allowance and is undertaking full‑time study; or
(b) receives austudy payment under the Social Security Act 1991; or
(c) receives a pensioner education supplement under the Social Security Act 1991; or
(d)       receives assistance under the scheme known as the ABSTUDY scheme; or
(e)       is undertaking any other course of education for the purposes of improving his or her work skills and/or employment prospects.
Sections 57EAA(1)(c), 57EA(1)(c), 57F(1)(c) or 57F(1A)(c) of the FA Act set out the eligibility for CCR. These sections provide that the work/training/study test must be satisfied in order for the individual to be eligible.
ISSUES FOR THE TRIBUNAL
The issues to be determined are:
(a)whether the Applicant was entitled to 50 hours of CCB and CCR during the debt period; and if not
(b)if the overpayment constitutes a debt to the Commonwealth; and if so
(c)whether all or part of the debts may be written off or waived.
Evidence
The Applicant testified at the hearing that she was being abused emotionally and, on occasion, physically by her husband. This had gone on for many years and it was impacting her children who bore witness to the abuse. The Applicant submits that one of the reasons she placed her children in care was to take them out of the “abusive” home environment and to insulate them from the harm that it might cause. She did not allege that her children were abused, though she stated that they witnessed her being abused and it was distressing for them.
The Applicant called on two of her sisters to testify at the hearing. Both confirmed that the Applicant was in an unstable and volatile relationship and detailed some of the incidents that had occurred between the Applicant and her husband, which included arguments breaking household items. They also testified that the Applicant is under financial pressure and takes sole responsibility for running her and her husband’s household and looking after their children.
The Tribunal also has before it a letter dated 30 April 2019 from clinical psychologist Emad Girgis who wrote that the Applicant was “experiencing relationship difficulties” as a result of her daughter passing away unexpectedly. Mr Girgis diagnosed the Applicant with major depressive disorder and writes that she has “benefitted from CBT and reported some improvements”. Dr Girgis also recommended that the Applicant “has her debts waived as this will relieve some burden on her current mental state”.
The Applicant also reports that she has also been prescribed anti-depressant medication by her GP.
During the debt period, the Applicant lived with her husband who she told the Tribunal worked up to 15 hours each week. Her husband, she testified, is mentally ill and only able to work part time. She said that when he was not working he would “just sit around” the house, “lingering”.
The Applicant advanced several arguments as to why she should not have incurred the debt and by implication why it should be waived.
Firstly, she contends that she was entitled to 50 hours of child care each week because she met the work/training/study requirements. Secondly, she states that Centrelink entitled her to 50 hours of child care each week on the basis that she was “actively looking for work” and that this was an error on Centrelink’s part for which she is not responsible. Lastly, she contends that any overuse of her child care entitlement was in part for the welfare of her children. Specifically, having the children in child care meant they were spared the stress of witnessing her husband’s behaviour towards her.
The Applicant applies for the maximum rate of child care
Centrelink records show a phone call was made by the Applicant on 26 November 2013 seeking information regarding “Work Training Study Info for CCB for Approved Care”.[1] The Applicant confirmed at the hearing that this was around the period in which she was contemplating increasing the amount of time she placed her children in care.
[1] T-documents, T17 at p 152.
Shortly after the call, in December 2013, the Applicant was assessed as being entitled to the maximum rate of CCB, which as mentioned is 50 hours a week for each child in approved care. She was sent a letter notifying her of this, which contained the following obligation notification:
If you use more than 24 hours of child care a week, you must tell us if you or your partner are working, training are studying for less than 15 hours a week or 30 hours a fortnight.[2]
[2] T-documents, T21 at p 711; Respondent’s Statement of Facts, Issues and Contentions.
Whilst there is evidence that the Applicant was informed of the requirements in order to be entitled to the maximum rate of CCB, there is no evidence before the Tribunal which would indicate she was compelled to substantiate her eligibility by providing evidence at the time it was granted.
Notification, evidence and debt
At the hearing the Applicant’s attention was drawn to a copy of another letter from Centrelink which was addressed to her and dated 14 April 2014. The letter provides details of the Applicant’s child care rebate for the quarter and states:
To be eligible for the Child Care Rebate you and your partner must meet the Work, Training or Study requirements
The Applicant conceded that she was “receiving letters like this” but said that she probably “didn’t read the letter”.
Correspondence was sent by Centrelink to the Applicant in September 2016 requesting evidence that the Applicant was “working, studying, training or in an approved activity from 26 November 2013”. No information was provided by the Applicant
On 13 October 2016 the Applicant was sent six “Account Payable” letters for child care benefit dating back to the 2013-14 financial year. A further two “Account Payable” letters were sent on 25 July 2017.
On 11 September 2018 the Applicant contacted the Department to request a review of her CCB and CCR debts. Centrelink determined that the Applicant had incurred CCB and CCR debts totalling $64,461.78.
Centrelink records show that the Applicant was in regular contact following the raising of the debt. A file note dated 24 January 2019 records that the Applicant “states she did not request 50 hours of childcare, we [Centrelink] granted that and she used her entitlement”. The Centrelink record continues:
Customer has provided a stat dec… it advises that customer was looking for work and also doing a private home study course in language and religion. Customer has not provided enrolment or evidence of study. I also took into account the child care usage – customer was claiming 50 hours a week for children including 10 hours on a Saturday = there is no evidence of customer participating on weekends. Child care seems excessive for customer’s stated activities.
Was the Applicant entitled to the maximum CCB and CCR allowance
Central to determining if the Applicant was entitled to the child care she received during the debt period is whether the Applicant had work or work related, study or training commitments which would enable her to meet the work/training/study requirement during the debt period.
The Applicant has identified four activities which she contends enable her to satisfy the work/training/study test set out in section 14 of the FA Act during the debt period.
(a)Volunteer Islamic Scripture teacher at NSW Government schools: The Applicant has provided a letter from Islamic Special Religious Education which states she was teaching on a “part-time but permanent volunteer basis” between 2011 and 2016 for “up to 6 hours per week”. Few details are before the Tribunal but the Applicant confirmed that there was “no roster” for attendance. [3]
(b)Religious studies at Islamic Dar Ussalam: The Applicant contends that she was participating in religious studies and has provided a letter from the Centre confirming her attendance between “July 2013 – October 2016” for “13-16 hours a week where she [the Applicant] was learning how to read her background language and write it plus also seeking more knowledge about her religion”.[4]
(c)Looking for work: The Applicant contends that she was looking for work during the debt period. She concedes she has no evidence of doing so and told the Tribunal that her job search was “old school” and that she was reliant on face to face meetings with potential employers.
(d)School canteen volunteer: The Applicant has provided a letter from the School Parents and Citizens Association which confirms that she was a volunteer since 2014. It states that she volunteered “at least 2-3 days a week, this continued for a few years until eventually in 2017 a position as Canteen Assistant became available”. No further details are provided as to the extent of the commitment or the nature of her role.
[3] T-documents, T15 at p 130.
[4] T-documents, T15 at p 129.
In considering these activities, the Tribunal has reference to a document from the Family Assistance Guide (2016) Topic 2.6.3.10 (“the Family Assistance Guide”) which outlines the “Eligibility Requirements for Up to 50 Hours CCB”.[5]
[5] Supplementary T-documents, ST6.
For the Applicant’s religious or language studies to count toward meeting the requirements outlined in the Family Assistance Guide, she would be required to have been undertaking study to improve work skills or employment prospects. The Applicant testified that the religious studies were undertaken as she was seeking more knowledge about her religion.
At the hearing she confirmed that the studies were unstructured and attendance was not compulsory but rather “come and go as you please”.[6] She did not provide a direct link to any employment or work-related function but did indicate that her study at Islamic Dar Ussalam may assist if she were to become a teacher.
[6] Transcript at p 14, lines 41-42.
Beyond this vague assertion, no evidence was presented to the Tribunal that would demonstrate the activities would improve or enhance the Applicant’s work skills or employment prospects, and so the religious and language studies cannot be classified as recognised study for the purposes of the work/training/study requirement. The Tribunal has a letter from Sarah Elzamtar of the Islamic Dar Ussalam which states that the Applicant attended between July 2013 and October 2016 for “approximately up to 13-16 hours a week where she was learning how to read her background language and write it… and help with the care taking and program management of the facility”. [7]
[7] T-documents, T15 at p 129.
The Respondent draws the Tribunal’s attention to the lack of a certificate of completion or attainment from these studies and that there is insufficient information available to determine the exact number of hours that she was engaged in the activity. Furthermore, there is no information about course fees nor is there any evidence that the religious studies were part of a recognised training course.
To satisfy the work/training/study test voluntary work must be undertaken for a minimum of 15 hours per week or 30 hours per fortnight. Voluntary work which does not improve work skills or employment prospects, and is undertaken for less than 15 hours per week or 30 hours per fortnight cannot be counted towards meeting the participation requirement and cannot be combined with other activities to meet the participation requirement.
No evidence is before the Tribunal which suggests that the Applicant’s volunteer work at the school canteen and as a volunteer scripture teacher would improve work skills or employment prospects. That noted, the Applicant did state to the Tribunal that she was working at the canteen and received payments from $280 to $350 per fortnight which she stated were for a commitment of up to 15 hours each week. Beyond this testimony, there is no specific information before the Tribunal related to the income from the canteen and it is not mentioned in the Applicant’s statutory declaration of 11 November 2016 which states in part “having my four… children in Day care gave me [the Applicant] the opportunity to look for work, study…”.
The Applicant has provided a letter from the Parents and Teacher’s Association Treasurer dated 24 October 2019 which confirms the Applicant is currently employed by the school canteen. The Treasurer writes that the Applicant has been volunteering at the school canteen for “at least 2-3 days a week, this continued for a few years until eventually in 2017 a position as Canteen Assistant became available, which was offered to [the Applicant] which she accepted”.
The letter does not nominate a start date for the Applicant’s employment, which is important given 2017 was the final year of the debt period. When asked at the hearing, the Applicant told the Tribunal she began paid employment at the canteen beginning of 2018, which is after the debt period. The letter also provides no specifics as to the hours that the Applicant worked in paid employment and there is no evidence of income being received from the canteen during the debt period presented to the Tribunal by either the Applicant or Respondent. This being the case I do not accept that paid work at the canteen which commenced at some time in 2017 or 2018 was a work or work related commitment as determined by section 15 of the FA during the debt period.
The Tribunal heard from the organiser of the Islamic scripture volunteer program who confirmed that the Applicant was affiliated with the program from 2011 to 2016 and teaching for up to six hours each week. However, this activity does not meet the test as there is no evidence that it improved the Applicant’s work skills or employment prospects. Further, the Respondent points out that the Applicant’s affiliation with the program ceased part way through the debt period.
In relation to all of the Applicant’s activities, there is a notable dearth of specifics and detail regarding the level of commitment and particularly the time which was allocated to each activity. Whilst a range is provided for the religious studies and volunteer activities, they are so vague as to be almost of no assistance in determining the Applicant’s commitment to these activities and if they would meet the activity requirement in section 17A(1) of the FA Act.

At the hearing the Applicant testified that she was looking for work during the debt period but she confirmed that she has no evidence of doing so. The Tribunal does not accept that the Applicant was looking for work such that it would satisfy the criteria for meeting the work/training/study test.
The Tribunal concludes that the Applicant was not enrolled in a recognised training program or study which would count towards meeting the requirements of section 17 of the FA Act. Whilst she was involved in voluntary work during the debt period, it was not related to her employment prospects. Furthermore, there is no evidence before the Tribunal which would enable a conclusion that she met the commitment requirement of 15 hours per week or 30 hours per fortnight for volunteer work which does not improve work skills or employment prospects.
That being the case, the Tribunal finds that Applicant did not meet the work/training/study test during the debt period. Consequently, she was not entitled to 50 hours of childcare each week.
Does the Applicant owe a debt of $64,461.78 to the Commonwealth
Section 71C of the FA (Admin) Act states that if CCB has been paid and the received amount is greater than the amount of benefit that should have been paid to the person under the family assistance law in respect of that period, the difference between the received amount and the correct amount is a debt due to the Commonwealth by the individual.
Similarly, section 71CAA of the FA (Admin) Act provides that when CCR has been paid to an individual and the individual is not entitled to rebate in respect of the child and that period, the amount is a debt to the Commonwealth.
As the Applicant did not meet the work/training/study test, the Respondent submits that CCB in excess of 24 hours per child per week constitutes a debt due to the Commonwealth. The Applicant has not raised any issues with the calculation of the debt and the Tribunal accepts the calculations are correct.
The Tribunal accepts that the overpayments represent a debt to the Commonwealth.
Is the Applicant liable to pay the debt to the Commonwealth
The Applicant is currently having $15 per fortnight deducted from her family assistance payments to repay the debt.
The circumstances under which the Secretary may write off a debt are set out in section 95 of the FA (Admin) Act which states:
(1)       The Secretary may, on behalf of the Commonwealth, decide to write off a debt for a stated period or otherwise, but only if subsection (2), (4A) or (4B) applies.
Secretary may write off debt if debt irrecoverable or debt will not be repaid etc.
(2)       The Secretary may decide to write off a debt under subsection (1) if:
(a)         the debt is irrecoverable at law; or
(b)         the debtor has no capacity to repay the debt; or
(c)         the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d)         it is not cost effective for the Commonwealth to take action to recover the debt.
This section is clear that the debt may be written off only if one or more of the stated circumstances are made out. None of the instances required by subsection 95(3) of the FA (Admin) Act which determine a debt to be irrecoverable at law exist in this matter. Subsection 95(4) of the FA (Admin) Act relevantly provides that if a debt is recoverable by means of deductions from a social security payment, the person is taken to have capacity to repay the debt unless recovery would cause severe financial hardship.
The Applicant receives approximately $1700 per fortnight in income and Centrelink benefits, of which $15 a fortnight is withheld from one of her benefits to repay the debt. At the hearing the Applicant was questioned about her capacity to pay the debt through withholding. She told the Tribunal “it’s not about the $15. It’s about this actual whole debt”. She said that $15 was a lot of money for her given that she has three children and cannot rely on her husband to provide for them. She told the Tribunal:
I believe by having this debt lifted it would give me and my children a better future and great relief from all the burdens and… great stresses I have suffered for many many years.
The Applicant also mentioned that the debt prevents her from receiving any tax returns or “lump sums” which she can use as these are withheld for debt repayment. The Applicant has also provided a breakdown of her income and expenses in her Statement of Financial Circumstances. I do not place much weight on this document given some of the expenses defy any reasonable analysis, such as the claim she spends $250 each fortnight on electricity.
Nonetheless, I accept that the Applicant must live according to a tight budget which is under pressure given the challenges of managing the needs of three children. As the Applicant noted, even a modest withholding is noticeable in her circumstances. I also recognise that the Applicant may well be without the additional income provided regularly by her husband should they remain separated. I note that the bulk of shared expenses currently fall to her but the loss of any income will inevitably add pressure to her household budget and further diminish the ability for discretionary spending or for unexpected expenses such as car repairs.
However, in total there is no evidence that would demonstrate the Applicant’s financial circumstances are any worse than those of the majority of social security recipients.
Finally, section 101 of the FA (Admin) Act provides that the right to recover all or part of the debt may be waived in certain circumstances.
The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a)       the debt did not result wholly or partly from the debtor or another person knowingly:
(i) making a false statement or a false representation; or
(ii) failing or omitting to comply with a provision of the family assistance law; and
(b)       there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c)       it is more appropriate to waive than to write off the debt or part of the debt.
I accept the arguments of the Respondent in this matter that the Applicant’s circumstances as a whole are not sufficiently unusual, uncommon or exceptional to meet the requirements of section 101.
This is particularly the case when considered in reference to the observations of DP Forgie in the matter of Davy v Secretary, Department of Employment and Workplace Relations [2007] AATA 1114 where it was stated:
Having said that, are Mr Davy’s circumstances such that they can be regarded as special circumstances?… They are out of the ordinary but I do not consider that they are special circumstances within the meaning of s 1237AAD(b). 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. [Emphasis added]
CONCLUSION
The Applicant finds herself carrying a significant debt to the Commonwealth. Whilst it is being paid at a manageable rate of $15 a week, I accept that the debt is a significant psychological burden. I also acknowledge that unlike many individuals who have a debt to the Commonwealth, the Applicant’s debt consists primarily of payments for a service which were made directly to the providers, meaning she never actually received the money she owes. The Tribunal also acknowledges that the Applicant has experienced difficult personal circumstances, particularly after the debt period.
As mentioned, the Applicant argues that if she is found not to meet the work/training/study test, then it is Centrelink, not her, who bears responsibility for the debt as Centrelink “entitled” her to the maximum allowance. As the Applicant had applied for the maximum rate and the evidence demonstrates that she was reminded on many occasions during the debt period that in order to remain eligible she was required to meet the test, the Tribunal does not accept this argument.
It is reasonable, however, to question how it was that the Applicant was able to access the maximum allowance in December 2013 following a phone call to Centrelink and a subsequent analysis by Centrelink. The evidence before the Tribunal indicates that the Applicant was notified of the requirement to meet the work/training/study test at the time, and on many occasions thereafter, but she was not actually asked to provide evidence of doing so until September 2016, nearly three years after her entitlement was raised to the maximum 50 hours per week. By that time she had accumulated a significant debt. Whilst this does not alter the Tribunal’s findings, it is obvious that requiring evidence earlier would have avoided an outcome that is unsatisfactory for both the Applicant and Respondent.
The Respondent draws the Tribunal’s attention to the Federal Court decision in Secretary, Department of Social Security v Coralie Hales [1998] FCA 219 (“Hales”) where French J stated:
The taxpayer is entitled to expect that in the ordinary course money paid to people which they are not entitled to receive will be recovered, albeit in a way appropriate to the circumstances which led to the overpayment and the circumstances of the persons concerned. However, the confining of a recovery regime by rigid rules, particularly in this area of the law, is likely to be productive of unfair or harsh outcomes in some of the great variety of fact situations that can arise. There are provisions in the Act which recognise that reality.
In this matter, as in Hales, the taxpayer is entitled to expect that the money which was paid for services which the Applicant was not entitled will be recovered.
I accept the argument put on behalf of the Secretary that the Applicant sought access to the maximum rate of CCB when she was not entitled to the maximum rate. The Applicant conceded that she took a cavalier approach to correspondence from Centrelink, but there is no denying she was reminded of her obligations to meet the work/training/study test regularly throughout the debt period but continued to claim at the maximum rate. Further I am not satisfied that there are any special circumstances that make it desirable to waive the debt.
DECISION
The decision under review, being the decision of the Social Services and Child Support Division made 16 May 2019, is affirmed.

I certify that the preceding 70 (seventy) paragraphs are a true copy of the reasons for the decision herein of Mr S Evans, Member

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Associate
Dated: 20 April 2020

Date of hearing: 16 January 2020

Applicant: In person

Solicitors for the Respondent: Ms C Campbell, Services Australia

[2020] AATA 887

20 April 2020

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Appeal

Date of hearing:	16 January 2020
Applicant:	In person
Solicitors for the Respondent:	Ms C Campbell, Services Australia