WXHG; Secretary, Department of Social Services and (Social security second review)
[2025] ARTA 781
•17 June 2025
WXHG; Secretary, Department of Social Services and (Social security second review) [2025] ARTA 781 (17 June 2025)
Applicant:Secretary, Department of Social Services
Respondent: WXHG
Tribunal Number: 2024/1827
Tribunal:Senior Member T Hamilton-Noy (second review)
Place:Melbourne
Date:17 June 2025
Decision:The Tribunal sets aside the decision under review and substitutes its decision that:
(i)There is a disability support pension debt to the Commonwealth in the amount of $3,658.08 for the period 9 July 2014 to 20 January 2015; and
(ii)The debt is recoverable by Centrelink
……………[SGD]…………………..
Statement made on 17 June 2025 at 9:56am
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 201(1A)–201(1B) of the Social Security (Administration) Act 1999.
Catchwords
Disability support pension debt – casual employment – “earned, derived or received” – income from employment – incorrect declaration of earnings – FTXB approach in calculation of overpayment – whether there are special circumstances
Legislation
A New Tax System (Family Assistance) (Administration) Act 1999
Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024
Social Security Act 1991
Social Security Act 1991
Social Security (Administration) Act 1999
Cases
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25; 100 ALD 9
Beadle and Director-General of Social Security (1984) 6 ALD 1
Boscolo v Secretary, Department of Social Security (1999) 90 FCR 531
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Judd and Secretary, Department of Social Services [2022] AATA 727
L and Department of Social Security (1995) 38 ALD 176
Re Ivovic and Director General of Social Services (1981) 3 ALN N95
Re Lumsden and Secretary, Department of Social Security (1986) 10 ALN N225
Re Stubbs and Secretary, Department of Families and Community Services [2003] AATA 729
Secretary, Department of Social Security v Hales (1998) 82 FCR 154
Secretary, Department of Social Services and FTXB (Social services second review) [2024] AATA 3021
Shi v Migration Agents Registration Authority (2008) 235 CLR 286
Skinner and Secretary, Department of Social Services [2015] AATA 569
Timothy Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114
Ward and Secretary, Department of Family and Community Services [2000] AATA 212
Statement of Reasons
BACKGROUND
The Respondent has been receiving disability support pension since August 2009. In the period July 2014 to January 2015, he was engaged in casual employment.
On 17 September 2018, an employee of the Applicant decided to raise and recover a disability support pension debt from the Respondent in the amount of $3,541.55 for the period 25 June 2014 to 20 January 2015, on the basis that the Respondent’s earnings from employment had not been taken into account in determining his correct rate of payment.
Subsequent to this decision being made, the amount of the debt was amended to $3,486.52.
The Respondent sought an internal review of the decision and on 18 December 2018 an authorised review officer affirmed the decision that there was a debt in the amount of $3,486.52 for the period 25 June 2014 to 20 January 2015 and that the debt was recoverable by the Applicant.
The Respondent made an application for independent review of the decision by the Administrative Appeals Tribunal (the AAT) on 17 October 2023. The AAT at first review, on 22 February 2024, varied the decision under review and found that the Respondent had a disability support pension debt of $3,541.55 for the period 25 June 2014 to 20 January 2015 and that the debt was to be recovered. A copy of the decision was sent to the parties on 26 February 2024.
On 25 March 2024 the Applicant sought second review of the AAT decision.
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 (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 in this matter on 20 March 2025, where the parties participated by video. The Respondent gave evidence at the hearing by video.
Issues before this Tribunal
The law relevant to this matter is contained in the Administrative Review Tribunal Act 2024 (the ART Act), the Social Security Act 1991 (the Social Security Act) and the Social Security (Administration) Act 1999 (the Social Security Administration Act).
At the time of the hearing, the Respondent had made an application for a non-publication order under section 70 of the ART Act and had provided written submissions to the Tribunal about the reasons for the order being sought. The Tribunal understood from the written submissions that the order being sought was an order removing identifying details of the Respondent and that the concerns related to publication of his name and personal information, rather than for non-publication of the decision itself. This application was discussed with the parties at the commencement of the hearing and the Tribunal observed that section 201 of the Social Security Administration Act prohibits the disclosure of such information in any reasons published by the Tribunal.
Subsections 201(1A) and (1B) of the Social Security Administration Act, in particular, provide that:
(1A) Nothing in this Division prevents the ART from publishing in written or electronic form the reasons for a decision of the ART on ART review if the publication does not identify:
(a) a party to the review concerned (other than the Secretary); or
(b) a person (other than the Secretary) who is related to, or associated with, a party to the review concerned or is, or is alleged to be, in any other way concerned in the matter to which the review concerned relates; or
(c) a witness in the review concerned.
(1B) Without limiting subsection (1B), a publication of reasons for a decision of the ART is taken to identify a person if it contains any particulars of:
(a) the name, title, pseudonym or alias of the person; or
(b) the address of any premises at which the person resides or works, or the locality in which any such premises are situated; or
(c) the physical description or the style of dress of the person; or
(d) any employment or occupation engaged in, profession practised or calling pursued, by the person or any official or honorary position held by the person; or
(e) the relationship of the person to identified relatives of the person or the association of the person with identified friends or identified business, official or professional acquaintances of the person; or
(f) the recreational interests, or the political, philosophical or religious beliefs or interests, of the person; or
(g) any real or personal property in which the person has an interest or with which the person is otherwise associated;
and the particulars are sufficient to identify that person to a member of the public, or to a member of the section of the public to which the publication is disseminated, as the case requires.
The Representative for the Respondent indicated that, given the scope of section 201 of the Social Security Administration Act, the Respondent was not proceeding with an application for non-publication of the Tribunal’s decision. Given this indication, the Tribunal did not formally consider the application for non-publication under section 70 of the ART Act.
The issues for the Tribunal left to determine in this decision are whether there has been an overpayment to the Respondent between June 2014 and January 2015, the amount of any overpayment, whether the overpayment is a debt due to the Commonwealth and, if there is a debt, whether the debt is recoverable by Centrelink.
In addition to the oral and written submissions of both parties and oral evidence of the Respondent given at the hearing, the Tribunal had numerous documents before it provided by the parties, which had been exchanged prior to the hearing. From these documents, the Tribunal had particular regard to:
The main bundle of hearing papers (“T documents”);
Statement of Facts, Issues and Contentions prepared by the Applicant dated 5 March 2025;
Sets of recalculations prepared by the Applicant;
Written submissions prepared by the Respondent dated 5 March 2025;
Statement of Financial Circumstances prepared by the Respondent; and
Documents provided by the Respondent relating to health issues (treating professional reports) and his financial circumstances (various bank statements), which are referred to further below.
Relevant legislation
Section 117 of the Social Security Act provides that, for a person who is not permanently blind, the rate of disability support pension is worked out using the Rate Calculator in section 1064 of the Social Security Act.
Point 1064-A1 of the Social Security Act notes that the rate of pension is a daily rate and is worked out by dividing the annual rate calculated according to the Rate Calculator by 364 (with fortnightly rates provided for information only). Point 1064-A1 then provides the following Method Statement to calculate a person’s rate of pension:
Step 1. Work out the person's maximum basic rateusing MODULE B below.
Step 1A. Work out the amount of pension supplement using Module BA below.
Step 1B. Work out the energy supplement (if any) using Module C below.
Step 3. Work out the amount per year (if any) for rent assistance in accordance with paragraph 1070A(b).
Step 4. Add up the amounts obtained in Steps 1, 1A, 1B and 3: the result is called the maximum payment rate.
Step 5. Apply the ordinary income test using MODULE E below to work out the income reduction.
Note: Module F contains provisions that may apply to working out the ordinary income of a person, and the ordinary income of a partner of the person, for the purposes of disability support pension.
Step 8. Take the income reduction away from the maximum payment rate: the result is called the income reduced rate.
Step 9. Apply the assets test using MODULE G below to work out the reduction for assets.
Step 10. Take the reduction for assets away from the maximum payment rate: the result is called the assets reduced rate.
Step 11. Compare the income reduced rate and the assets reduced rate: the lower of the 2 rates, or the income reduced rate if the rates are equal, is the provisional annual payment rate.
Step 12. The rate of pension is the amount obtained by:
(a) subtracting from the provisional annual payment rate any special employment advance deduction (see Part 3.16B); and
(b) if there is any amount remaining, subtracting from that amount any advance payment deduction (see Part 3.16A); and
(c) adding any amount payable by way of remote area allowance (see Module H).
1064-E1 provides the mechanism to work out the effect of a person’s ordinary income on their maximum payment rate and requires, in part, that the person’s ordinary income on a yearly basis is worked out.
“Income” is defined at subsection 8(1) of the Social Security Act to be:
"income", in relation to a person, means:
(a) an income amount earned, derived or received by the person for the person's own use or benefit; or
(b) a periodical payment by way of gift or allowance; or
(c) a periodical benefit by way of gift or allowance;
but does not include an amount that is excluded under subsection (4), (5) or (8).
Subsection 8(1A) of the Social Security Act states that a reference to “employment income” in relation to a person is a reference to ordinary income of the person:
(a) that is for remunerative work of the person as an employee in an employer/employee relationship; and
(b) that includes, but is not limited to:
(i) salary, wages, commissions and employment - related fringe benefits; and
(ii) if the person is engaged on a continuing basis in that employer/employee relationship--a leave payment to the person;
but does not include:
(c) a superannuation payment to the person; or
(d) a payment of compensation, or a payment to the person under an insurance scheme, in relation to the person's inability to earn, derive or receive income from that remunerative work; or
(e) if the person is not engaged on a continuing basis in that employer/employee relationship--a leave payment to the person; or
(f) a payment to the person by a former employer of the person in relation to the termination of the person's employment; or
(g) a comparable foreign payment; or
(h) an instalment of parental leave pay.
Section 1072 of the Social Security Act then states that a reference in the legislation to a person’s ordinary income for a period is a reference to the person’s gross ordinary income from all sources for the period calculated without any reduction, other than a reduction under Division 1A.[1]
[1] Division 1A relates to permissible reductions of business income and does not apply in the circumstances of this case.
From 2003 up to December 2020, section 1073B of the Social Security Act provided for the daily attribution of employment income. Subsection 1073B(1) of the Social Security Act stated that:
1073B Daily attribution of employment income
(1) If:
(a) a person is receiving a social security pension or benefit; and
(b) the person’s rate of payment of the pension or benefit is worked out with regard to the income test module of a rate calculator in this Chapter; and
(d) the person earns, derives or receives, or is taken, either by virtue of the operation of section 1073A or any other provision of this Act, to earn, derive or receive, employment income during the whole or a part of a particular instalment period of the person;
the person is taken to earn, derive or receive, on each day in that instalment period, an amount of employment income worked out by dividing the total amount of the employment income referred to in paragraph (d) by the number of days in the period.
Section 1073C of the Social Security Act then stated that:
1073C Fortnightly or yearly expression of attributed employment income
If, in accordance with the operation of section 1073B, a person is taken to earn, derive or receive a particular amount of employment income on each day in an instalment period:
(a) the rate of the person’s employment income on a fortnightly basis for that day may be worked out by multiplying that amount by 14; and
(b) the rate of the person’s employment income on a yearly basis for that day may be worked out by multiplying that amount by 364.
An “instalment period” is defined at section 23 of the Social Security Act to mean a period determined by the Secretary under section 43 of the Social Security Administration Act to be an instalment period of the person. Subsection 43(1) of the Social Security Administration Act states that a social security payment is to be paid in arrears and by instalments relating to such periods, not exceeding 14 days, as the Secretary determines.
Secretary, Department of Social Services and FTXB
As noted above, section 1073B of the Social Security Act, in force at the time of the claimed overpayment, provided a method for daily attribution of employment income earned, derived or received by a person. At the time the AAT first review decision was made, concerns had been raised by the Commonwealth Ombudsman about the use of “income apportionment” using section 1073B, which resulted in Centrelink apportioning income across two instalment periods impacting social security rates and, in the Ombudsman’s view, potentially leading to unfair debts against customers.[2]
[2] Commonwealth Ombudsman, ‘Lessons in Lawfulness: Own motion investigation into Service Australia’s and the Department of Social Services’ response to the question of the lawfulness of income apportionment before 7 December 2020’, August 2023.
The AAT at first review considered, as part of its written reasons for decision, the concerns raised in the Ombudsman’s report and the way in which the debt had been calculated using section 1073B of the Social Security Act. The AAT at first review found (at [49]) that section 1073B is triggered by a finding of fact about employment income earned, derived or received in an instalment fortnight and that, once a finding is made, the provision operates to deem earnings to be evenly distributed over that fortnight. The AAT considered that apportionment is a mechanism for reaching a finding of fact about earnings in an instalment fortnight and is a separate exercise, undertaken prior to any application of section 1073B. The AAT was satisfied that the overpayment calculated, using apportionment, was correct, that the Respondent owed a debt to the Commonwealth in the amount of $3,541.55 and that the amount was recoverable by Centrelink.
Subsequent to the AAT first review decision being made in this matter, and prior to the hearing of this matter, the General Division of the AAT, constituted by the President and two Senior Members, proceeded to make its decision in the matter of Secretary, Department of Social Services and FTXB (Social services second review) [2024] AATA 3021 (FTXB).
The respondent in FTXB had been in receipt of youth allowance and, between July 2014 and June 2015, had been receiving casual employment income. The AAT noted in its decision that the Tribunal was constituted by a panel of three on the basis that the issues to be decided in the matter had arisen in many other cases governed by point H23 prior to amendments that had occurred in the legislation on 7 December 2020. The AAT also noted that the written reasons provided were more detailed than would ordinarily be required as a result of the potential assistance the decision may provide other similar cases governed by the terms of point H23.
The relevant provisions in the youth allowance calculator in section 1067G of the Act noted that the allowance is a daily rate, worked out by dividing the fortnightly rate calculated according to the Rate Calculator by 14. Point H23 of the Rate Calculator required that: “Subject to points 1067G-H23A, 1067G-H23B, 1067G-H24 and 1067G-H25 and section 1073, ordinary income is to be taken into account in the fortnight in which it is first earned, derived or received”. While the rate calculator in FTXB required a fortnightly rate, as opposed to the annual rate relevant to the calculation of disability support pension, findings of the AAT in FTXB regarding the interpretation of “earned, derived or received” makes the decision of relevance in the present matter.
The AAT in FTXB found that the time at which a person earns ordinary income is when the person becomes legally entitled to the income (at [136]); that ‘earned’ for the purposes of point H23 when a person becomes legally entitled to it means that ‘earned’ cannot be equated with ‘accrued’ (at [138]); and that when the person becomes legally entitled to income will depend upon the legal arrangements that apply in relation to the employment relationship (at [139]). The AAT found that a person derives income when they have a present legal entitlement to it (at [143]). The AAT noted that the analysis required in respect of each income amount of a person is to be framed as follows (at [150]):
In which of the person’s instalment periods did they first:
(a)become legally entitled to the income amount, where the income amount is of a kind that can be described as being earned; or
(b)become legally entitled to the income amount, where the income amount is not of a kind that can be described as being earned but can be described as being derived; or
(c)receive the income amount?
The AAT in FTXB noted that (at [157]):
Where an employer complies with the law (including tax law), a precise date upon which an employee receives a wage will usually be capable of being ascertained from the employer’s business records and documents in the possession of an employee, such as payslips and bank statements. A precise date upon which an employee earns a wage (in the sense of becoming legally entitled to the wage) will be capable of being ascertained from the legal arrangements governing the relationship between the employee and their employer. The date will be readily identifiable if a written contract of employment, a statue or an award specifies it. If no document exists which expressly sets out the applicable arrangements, in many cases, those arrangements will be capable of being inferred from other documents. Such other documents include payslips and bank statements. Further, oral evidence from an employee (or another person with whom they worked) around a workplace’s practices and arrangements concerning rostering, timesheets and pay cycles may corroborate documentary records or indeed be sufficient on its own to identify when an income amount was earned.
The AAT went on to provide illustrative examples (at [158]). Of particular relevance are the following examples, relating to casual employment arrangements:
(a)Jane Smith works casual hours Monday to Friday and is paid on Friday evening. In the absence of any other evidence, it may be inferred that the legal arrangement between her and her employer is that she becomes legally entitled to be paid every Friday for any work she performed in the previous five days. Jane is not entitled to be paid on any day other than Friday for any work she performed on any such other day and therefore, for the purposes of point H23, she does not earn a wage prior to the Friday. For the reasons discussed at [138] above, Jane may be accruing days for which she will be paid, but these accruals do not crystalise into a legal entitlement until each Friday.
(b)John Brown works casual hours Monday to Sunday and is paid on the Thursday of the following week. In the absence of any other evidence, it may be inferred that the legal arrangement between him and his employer is that he becomes legally entitled to wages every Sunday for any work he performed during the period Monday to Sunday. For the purposes of point H23, John earns income for each Monday to Sunday period (in the sense of becoming legally entitled to the income) on the Sunday and that income is paid (and thus received) on the following Thursday.
……
(f) As a result of income matching, the Secretary has reason to believe that Jerry Summers underreported his employment income 10 years earlier. Jerry informs the Secretary that he worked as a casual employee for a company for three months during a university vacation, and recalls that he never worked on weekends. The Secretary ascertains that the company has since been deregistered and none of its employment records are available. The Secretary obtained Jerry’s bank statements which showed that, for the three-month period, the same amount was deposited in Jerry’s account by the company every Monday at 9:00am, except for weeks which contained a public holiday. For the latter weeks, the amount deposited was 80% of the usual amount. In the absence of any other evidence, it may be inferred that Jerry worked 5 days per week except for public holidays and that he was paid on Mondays for the work performed in the period Monday to Friday of the previous week. For the purposes of point H23, Jerry earned his income from the company every Friday.
The Tribunal accepts that the matter of FTXB has been appealed to the Full Federal Court, with a hearing having been conducted in early March 2025 and a decision by the Court still pending at the time the Tribunal has proceeded to make its decision in this matter. The Tribunal has ultimately decided to proceed while the Court decision remains pending because of the consistency in the two sets of calculations provided by the Applicant. The Tribunal has also had regard to its obligations in section 9 of the ART Act when making a decision to proceed to finalise the matter without awaiting the outcome of the Court appeal.
The Applicant’s position
The Applicant submits that the legal reasoning in FTXB is incorrect, including the reasoning of the AAT with respect to the meaning of the word “earned”. The Applicant submits that the correct interpretation is that income is earned when income-producing activities are completed, that is, when a person performs the work. The Applicant further submits that where available evidence does not establish the instalment period in which employment income was earned, but establishes the instalment period in which it was received, the income must be taken into account when it is received.
The Applicant noted in its written submissions that it had performed provisional recalculations of the Respondent’s debt, which led to the following results:
(i) A disability support pension debt of $3,658.07 for the period 9 July 2014 to 20 January 2015 if the Applicant’s approach is followed; and
(ii) A disability support pension debt of $3,658.08 for the period 9 July 2014 to 20 January 2015 if the approach in FTXB is used.
The Applicant noted in its written submissions that an appeal from the decision of FTXB remains pending before the Full Federal Court. However, given the debt amount remains the same (with a negligible difference of one cent between the two calculations), the Applicant did not seek to submit that the Tribunal need await the outcome of the appeal.
The Applicant submits that there is no basis on which to write off or waive the debt in this matter and that the debt is recoverable. The oral submissions of the Applicant at the hearing were consistent with the written submissions provided to the Tribunal in respect of its position about the calculation of the overpayment and that there are no grounds to waive or write off the debt.
The Respondent’s position
The Respondent provided written submissions to the Tribunal that were also consistent with the oral submissions of the Respondent’s representative at the hearing. The Respondent submits that the position of the AAT at first review is incorrect and, in particular, that its approach in “assuming uniform daily earnings across pay periods, allocating them to a pension fortnight without evidence of actual work dates” was incorrect. The Respondent noted, in written submissions provided to the Tribunal, that such an approach was inconsistent with the AAT decision of Judd and Secretary, Department of Social Services [2022] AATA 727, where the AAT noted (at [71]-[73]) that:
With respect to this particular debt, the historical employment records of the Applicant’s former employer Blue Care, clearly state the periods the Applicant worked with respect to the payments she received.
The Respondent has contended that, in circumstances where the available evidence does not permit the Respondent to identify the particular date on which employment income was earned, they have taken the approach of recognising the income at the point at which it was first received by the Applicant (by reference to the relevant pay date).
Regarding the calculation of this debt, respectfully, the Tribunal could find no basis in the Respondent’s submissions as to why the income of the Applicant was taken into account on the day it was first received in the corresponding Agency pay period fortnight, and not apportioned by the number of days in the pay period the income was earned, pursuant to section 1073B(1)(d) of the Act which was in force at the time.
The Respondent submitted that Judd underscores the requirement that income attribution must reflect evidence of what an amount was earned, derived or received and not “arbitrary or speculative assumptions”.
The Respondent also submits that the position of the AAT in FTXB is incorrect. In respect of FTXB, the Respondent submitted that:
The Tribunal’s view in FTXB was that the income is realised when the recipient becomes legally entitled to it. The Tribunal introduced a contractual lens absent in Module E’s text, which the respondent contends is misaligned with the definition of section 8(1) of the Act, which disjunctively states ‘earned, derived or received’, requiring a factual, not assumed basis for determination.
The Respondent submits that the ‘yearly basis’ requirement in Module E amplifies the need for evidence and that, where there is no specific evidence of when income was ‘earned, derived or received’ during a debt period, the debt calculation is invalid pursuant to section 1223 of the Social Security Act because, in the Respondent’s submissions:
(a)Evidentiary precision is a shared and inherent requirement;
(b)Section 1073B of the Act unified the need for a factual trigger; and
(c)The core principles the respondent seeks to establish transcend module specific language. The Act’s beneficial purpose favours recipients across modules.
Does the Respondent owe a debt to the Commonwealth?
Copies of a “Transaction History Report” provided by the Respondent to Centrelink confirm that the Respondent was in casual employment between July 2014 and January 2015. The report indicates that the Respondent was paid fortnightly and that his gross and net earnings varied widely each fortnight. The Tribunal accepted the written submissions of the Respondent’s representative that the Respondent’s casual employment involved variable shifts, no fixed schedule and fluctuating hours and days each week. The Tribunal accepted that the Respondent’s remuneration was structured on an hourly basis, was supplemented by casual loadings and overtime payments and that he was paid fortnightly on Thursdays, with each payment covering work performed in the preceding pay period, which ran from Monday to Sunday of the prior two weeks.
The Respondent was sent correspondence by Centrelink dated 18 June 2014, including a Reporting Statement, which set out the requirement for the Respondent to report every two weeks on specified dates as set out in the notice. The statement noted that the Respondent was required to report as follows:
For this Centrelink Reporting Period Report on this day
11 Jun 2014 to 24 Jun 2014 Tuesday 24 Jun 2014
25 Jun 2014 to 8 Jul 2014 Tuesday 8 Jul 2014
9 Jul 2014 to 22 Jul 2014 Tuesday 22 Jul 2014
23 Jul 2014 to 5 Aug 2014 Tuesday 5 Aug 2014
6 Aug 2014 to 19 Aug 2014 Tuesday 19 Aug 2014
20 Aug 2014 to 2 Sep 2014 Tuesday 2 Sep 2014
The Reporting Statement also noted that:
What you must report for each Centrelink Reporting Period
• If any circumstances have changed (see the list on the back of this page for details)
• If you were employed:
• The business where you worked.
• The amount you earned for work done in the Centrelink Reporting Period that relates to the day you need to report. The amount reported must be the amount earned before tax and other deductions such as salary sacrifice. You must report even if you have not received some or all of the pay yet.
• The number of hours you worked.
The Respondent gave evidence, when asked about the reporting of his income in the period under review, that he had had to calculate his income per hour and per day and that he had found it a “messy” process. The Respondent told the Tribunal that his intention had been to be as accurate as possible and that no two fortnights had been identical and any errors were not intentional. The Respondent gave evidence that he had reported on a Monday for a payment due to be received the following Thursday. He could not enter additional hours, so would add the amount to the next fortnight.
When the above correspondence was put to the Respondent, he stated he did now recall reporting on Tuesdays. The Tribunal accepted the observations made by the Applicant at hearing that the reporting requirements were for reporting in arrears, not in advance as the Respondent had asserted in his evidence at the hearing.
The Tribunal accepted that the Respondent was contacted by a customer service officer on 29 September 2014 in relation to his employment. The “DOC” record for that contact reflects that the customer service officer confirmed with the Respondent that he understood the difference between gross and net income, that he understood how to declare earnings in the correct fortnight and that he understood the requirement to report fortnightly prior to payment. When this contact was put to the Respondent during the hearing, the Respondent indicated he could not recall the specific conversation and what was discussed and that in hindsight he can see that his pay period and the reporting period were not synchronised, but he would be quite annoyed if it was suggested that he knowingly did something. The Tribunal accepted the Respondent could not recall the specific conversation given 11 years have now passed since the conversation. The Tribunal accepted, however, that the description in the “DOC” record reflected what was discussed with the Respondent about his earnings and reporting requirements in September 2014.
The Respondent was also asked, during the hearing, about the several fortnights he had reported gross earnings of $254.65, despite fortnightly fluctuations in his gross pay. The Respondent stated that the only thing he could recollect was that he had had a shift pattern. The Respondent also submitted that there was a stop to his reporting and when it started up again, the system would look at the last entry and substitute the last entry. When it was observed that there were nine occasions where earnings of $254.65 were advised to Centrelink, the Respondent stated in response that it would have been a restart of the reporting system; he was at a loss to explain how the figures came in individually. The Respondent accepted the submission put to him at hearing by the Applicant that, on the Applicant’s analysis, he had declared $4,758.17 in the period under review and had earned $11,502.32. The Tribunal accepted the Applicant’s oral submissions at hearing that, by way of either approach being used, there were discrepancies between what the Respondent reported his earnings to be and what earnings are disclosed by the payslip information contained in the documents.
Having regard to the “Data collected for screen EANS” information provided by the Applicant to the Tribunal, the Tribunal does accept that there was under-reporting of income by the Respondent in the period from July 2014 to January 2015. In consequence, the Tribunal considers the Respondent was overpaid disability support pension in that period and must consider the best evidence before it as to the quantum of any overpayment.
The Tribunal has carefully considered the submissions of the Applicant and Respondent in this matter relating to the preferable approach to the calculation of any overpayment. The Tribunal has ultimately considered that it is most appropriate to follow the guidance decision of FTXB in assessing when the Respondent’s income is assessable for the purposes of his rate of disability support pension in the period under review. In the absence of any judicial authority to the contrary, the Tribunal considers that, at the time it has proceeded to make its decision, the matter of FTXB provides the most persuasive and authoritative interpretation of the way in which “earned, derived or received” should be interpreted. Given the approach the Tribunal intends to follow, the Tribunal did not accept the submissions of the Respondent that, absent specific evidence of when amounts were earned, derived or received, the debt is invalid such that there is no overpayment at all.
The Applicant has noted in its written submissions that the FTXB approach to recalculation of the debt was undertaken as follows:
The provisional recalculation using the methodology adopted by the AAT in FTXB (Annexure A) assessed the respondent’s employment income on the basis that it was earned on the last day of each fortnightly pay period. It has been inferred that that is the date on which the respondent became legally entitled to his income (applying the construction preferred by the AAT in FTXB that employment income is earned when the person’s legal entitlement to it arose: see FTXB at [188]). The income has been assessed in the instalment period in which the last day of each fortnightly pay period fell. This is demonstrated by the “Verified Earnings Details Sheets” at page 6.
By using this approach, the Tribunal accepts there is an overpayment totalling $3,658.08 for the period 9 July 2014 to 20 January 2015.
Subsection 1223(1) of the Social Security Act recognises that a debt to the Commonwealth exists in the following circumstances:
(1) Subject to this section, if:
(a) a social security payment is made; and
(b) a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;
the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.
The Tribunal notes the submissions made on behalf of the Respondent that the debt notices issued to the Respondent were not valid and that, in these circumstances, the “actions in raising the debt and the calculations with respect to the debt were unlawful or invalid. Accordingly, any demand notice with respect to the debt would not be valid as no debt lawfully or validly existed”. The Respondent referred in written submissions to section 1229 of the Social Security Act, which provides for “Notices in respect of debt” and states as follows:
(1) If a debt by a person to the Commonwealth under the social security law has not been wholly paid, the Secretary must give the person a notice specifying:
(a) the date on which it was issued (the date of the notice); and
(b) the reason the debt was incurred, including a brief explanation of the circumstances that led to the debt being incurred; and
(c) the period to which the debt relates; and
(d) the outstanding amount of the debt at the date of the notice; and
(e) the day on which the outstanding amount is due and payable; and
(ea) the effect of sections 1229A and 1229B; and
(f) that a range of options is available for repayment of the debt; and
(g) the contact details for inquiries concerning the debt.
(2) The outstanding amount of the debt is due and payable on the 28th day after the date of the notice.
(3) The Secretary may give more than one notice under subsection (1) in relation to a person and a debt of the person.
The Tribunal did not accept the submissions of the Respondent that any invalidity in a notice issued to the Respondent about recovery of an overpayment invalidates the overpayment itself. Subsection 1223(1) of the Social Security Act is clear that, in circumstances where a person receives the benefit of a social security payment and is not entitled to that payment for any reason, there is a debt due to the Commonwealth. There is no associated requirement for notification of the overpayment in section 1223 of the Social Security Act to validate that a debt to the Commonwealth exists. Subsection 1223(1) is subject to the remainder of section 1223 of the Social Security Act and the remaining sections set out circumstances in which an overpayment is not a debt due to the Commonwealth. These include matters such as payments made due to computer error and do not include circumstances where an invalid notice of a debt has been issued to a Centrelink recipient. Given the findings of the Tribunal on these submissions, the Tribunal did not proceed to examine the notices issued to the Respondent as to their compliance with section 1229 of the Social Security Act.
The Tribunal finds that the Respondent owes a debt to the Commonwealth in the amount of $3,658.08, pursuant to section 1223 of the Social Security Act.
Is the debt recoverable by Centrelink?
Having determined that there is a debt due to the Commonwealth by the Respondent, the Tribunal then considered whether the debt is able to be written off for a period of time, whether it is able to be waived, or whether it must be recovered.
Write off
Subsection 1236(1A) of the Social Security Act states that a debt may be written off for a period of time if, and only if:
(a) the debt is irrecoverable at law; or
(b) the debtor has no capacity to repay the debt; or
(c) the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d) it is not cost effective for the Commonwealth to take action to recover the debt.
Subsection 1236(1B) states that a debt is taken to be irrecoverable at law if, and only if:
(b) there is no proof of the debt capable of sustaining legal proceedings for its recovery; or
(c) the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or
(d) the debtor has died leaving no estate or insufficient funds in the debtor’s estate to repay the debt.
Subsection 1236(1C) then states that a debtor is taken to have a capacity to repay the debt by way of deductions from a social security payment, deductions under section 84 of the A New Tax System (Family Assistance) (Administration) Act 1999 (the Family Assistance Administration Act) or setting off under section 84A of the Family Assistance Administration Act, unless recovery by those means would result in the debtor being in severe financial hardship.
In written submissions provided to the Tribunal, the Applicant noted the following relevant case law in relation to the question of “severe financial hardship”, which is not defined in the legislation.
In Re Lumsden and Secretary, Department of Social Security (1986) 10 ALN N225, the Tribunal held that a person’s entire financial position would need to be materially less than the current rate of pension for a person to be in severe financial hardship.
In L and Department of Social Security (1995) 38 ALD 176, the Tribunal observed that (at [66]):
In summary, I consider that matter relating to the personal financial hardship of the individual are always relevant in any decision as to write off under subsection 1236(1). Retrospective considerations may occasionally be relevant. The essential inquiry will always be whether recovery is a feasible proposition, bearing in mind the financial means and obligations of the individual concerned. Will recovery cause such personal hardship as to run contrary to the beneficial nature of the legislation?
In Re Stubbs and Secretary, Department of Families and Community Services [2003] AATA 729, the Tribunal stated (at [20]) that:
Severe financial hardship, while not implying destitution, goes beyond straitened financial circumstances and imports a need for the particular case of a person to include financial suffering of a severe or extreme nature.
The Tribunal finds that the debt is recoverable at law, the Respondent’s whereabouts are known and it is cost effective for the Commonwealth to take action to recover the debt.
As to whether the requirements in paragraph 1236(1A)(b) of the Social Security Act are met, the Tribunal accepted that the Respondent has repaid part of the debt and that, at the time the Applicant’s written submissions were prepared, had an amount of $1,006.52 outstanding from the amount originally raised. The Tribunal also accepted, from the Applicant’s submissions, that the Respondent had been repaying the debt by way of fortnightly withholdings from his Centrelink payment of between $30 and $45, from October 2018 to August 2023.
The Respondent provided a Statement of Financial Circumstances to the Tribunal, which set out the following information:
·He receives $2,038 per month in Centrelink payments;
·Out of this amount, his monthly household expenses include mortgage of $746.22, council rates $89, water/sewage rates $71, house and contents insurance $78.87, electricity $150, phone and internet $62.50 and mobile phone $15;
·His monthly transport-related expenses include car registration $57.37, car insurance $34.50, petrol $170 and car repairs $150.
The monthly expenses estimated by the Respondent total $1,624.46, leaving just over $400 per month after necessary expenses identified by the Respondent. The Tribunal finds that the Respondent would not be in severe financial hardship if required to make further repayments towards the debt at a reasonable rate. The Tribunal finds that the Respondent has capacity to repay the debt and that none of the legislative requirements for write off of the debt for a period of time are met in this case.
Waiver – Administrative error
Section 1237A of the Social Security Act requires that a debt be waived if the following circumstances are met:
(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.
As noted by the Applicant in written submissions provided to the Tribunal, the requirement for the provision to be enlivened is that administrative error by the Commonwealth is the sole cause of any portion of the debt, as noted in Ward and Secretary, Department of Family and Community Services [2000] AATA 212, where the AAT noted (at [47]) that:
This means that the Secretary’s duty to waive does not extend to those debts which are attributable to errors or other factors which are independent of the Commonwealth’s administrative error. It makes no difference that those other errors or factors are minor. If those other errors or factors follow as a result of the Commonwealth’s administrative error (i.e. they are incidental to the Commonwealth’s error), then it may be that the debt is attributable solely to the Commonwealth’s administrative error.
The Tribunal found on the evidence before it that the debt has arisen due to the Respondent under-reporting his gross income from employment over a seven-month period. The debt is not due to sole administrative error and cannot be waived under section 1237A of the Social Security Act.
Waiver – Special circumstances
Section 1237AAD of the Social Security Act provides that a debt may be waived where:
(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.
The Applicant and Respondent drew the Tribunal’s attention to the following case law, relevant to the interpretation of special circumstances discretion.
In Re Ivovic and Director General of Social Services (1981) 3 ALN N95, the Tribunal stated (at [45]) that:
The reference to special circumstances ‘by reason of which’ a person liable “should be released” requires, in our view, that there must exist in the circumstances of the case, a factor or factors which justify the making of an exception in whole or in part to the principle of liability which the SS Act otherwise establishes…Thus whilst keeping the dominant principle of [recovery of debt] in mind, [the decision maker] must nevertheless be prepared to respond to the special circumstances of any particular case by reason of which strict enforcement of the liability created by the section would be unjust, unreasonable or otherwise…
In Beadle and Director-General of Social Security (1984) 6 ALD 1, the Tribunal observed (at 3) that:
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 Groth v Secretary, Department of Social Security (1995) 40 ALD 541, the Federal Court stated (at 545) that:
The phrase ‘special circumstances’, it has been said, although imprecise is sufficiently understood not to require judicial gloss.…
and for present purposes it is sufficient to observe that it would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case. That was, I consider, the only enquiry to be undertaken in this case. It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary…
In Secretary, Department of Social Security v Hales (1998) 82 FCR 154, the Federal Court noted (at paragraphs 162C-G) that:
The concept of special circumstances is broad. A constellation of factors, including financial circumstances, may fall within it. The express exclusion of financial hardship alone as a special circumstance is an indicator that it would otherwise be included. This gives some measure of the range of circumstances which will qualify as special…
The evident purpose of s 1237AAD is to enable a flexible response to the wide range of situations which could give rise to hardship or unfairness in the event of a rigid application of a requirement for recovery of debt. It is inappropriate to constrain that flexibility by imposing a narrow or artificial construction upon the words…But to anticipate the limits of the categories of possible cases by imposing on the language of the section a fetter upon its application which is not mandated by its words, is to erode its useful purpose.
In Boscolo v Secretary, Department of Social Security (1999) 90 FCR 531, the Federal Court (at 536) noted that:
The core of the requirement for ‘special circumstances’ or ‘special reasons’ is that there be something unusual or different to take the matter the subject of discretion out of the ordinary course: Minister for Community Services and Health v Chee Keone Thoo [1988] FCA 54; (1988) 8 AAR 245 at 261-262; [1988] FCA 54; 78 ALR 307 at 324 (Burchett J). But that does not require that the case be extremely unusual, uncommon or exceptional: Secretary, Department of Social Security v Hodgson [1992] FCA 338; (1992) 37 FCR 32; 108 ALR 322. In Beadle the Full Court, having concluded that the term “special” was sufficiently well understood not to require a judicial gloss said the matter was one for the decision-maker, in that case the Director-General of Social Security.
In Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25; 100 ALD 9, the Court stated (at [33]) that:
I also note that the authorities have emphasised time and again the importance of maintaining flexibility in determining what constitutes special circumstances. The danger is that the test will be overstated if the word “exceptional” is emphasised. It was not the intention of parliament to confine the exercise of the discretion to an exceptional case. There is less risk of overstatement if the words “unusual” or “uncommon” are emphasised. Those words indicate, correctly in my view, the fact that there must be something that distinguishes the case form the ordinary or usual case. It may not be easy to postulate the ordinary or usual case other than in quite general terms and, in doing so, close attention must be given to the particular statutory context.
In Timothy Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114, the AAT stated (at [80]) that:
… ‘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 DP 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 system of administration of the SS Act does not visit any injustice for many if not all social security recipients but it did not lead to any injustice or unfairness on Mr Davy that is not visited, or potentially visited, upon all other recipients of social security payments under the Act. Therefore, I am not satisfied that there are special circumstances that make it desirable to waive the debt under s 1237AAD of the Act.
The Applicant noted that, in considering this ground for waiver, the Tribunal is not limited to considering the Respondent’s circumstances during the relevant period or at any other time and may include consideration of his current circumstances (Shi v Migration Agents Registration Authority (2008) 235 CLR 286 at [99]). Further, there is nothing in the legislation that limits consideration to the Respondent’s circumstances at the time of the original decision, the authorised review officer’s decision or the AAT decision at first review (Skinner and Secretary, Department of Social Services [2015] AATA 569).
The Respondent’s legal representative provided detailed written submissions to the Tribunal about the Respondent’s circumstances and submitted that his circumstances are “sufficiently unusual uncommon or exceptional” to distinguish the Respondent’s case and take it out of the ordinary. The Respondent’s representative submitted that, in the Respondent’s circumstances, it would be unfair, unintended or unjust to require him to repay the debt. The Respondent’s legal provided the following written submissions in support of their assertion that special circumstances are met in this case (paragraph numbering and footnote references deleted):
(a) His financial hardship;
The respondent’s financial situation causes distress as he is solely reliant upon the DSP as his sole source of income. His monthly DSP income of $2,038.80 is the only financial support available to him. The respondent is otherwise unable to work and earn any further source of income. His monthly expenses amount to $1,624.46 which includes only his essential living costs such as utilities, food, transportation and significant medical expenses pertaining to his disabilities. Given the narrow margin between the respondent’s income and expenses, the respondent experiences financial hardship. Repayment of the debt would significantly exceed his monthly expenses which could potentially lead to the sacrifice of necessary living expenses.
The respondent owns a 50% share in his principal place of residence and a vehicle valued at $4,850.00. The respondent contends that a forced sale of his home or vehicle in order to pay the debt would exacerbate his vulnerability, leaving him without a secure place to live and transportation means, which may further worsen his mental and physical health due to the stress and trauma associated with losing these items.
The respondent contends that payment of his debt, given his ongoing financial hardship and the severe impact it would have on his well-being would be unfair and unjust.
(b) His health conditions;
The respondent has been diagnosed with Generalised Anxiety Disorder, Depressive Disorder and Adjustment Disorder with mixed anxiety and depressed mood. The respondent has been engaged with [Dr H], Consultant Psychologist for long term treatment, since 2008. This treatment has focused on chronic, severe stress, anxiety and depression. In a report dated 4 March 2025, [Dr H] has provided the following opinions in relation to the respondent’s health concerns:
i.[The Respondent] has experienced severe trauma, and he is being treated for post-traumatic stress,
ii.He has complex medical issues, as well as chronic anxiety, depression and trauma symptoms,
iii.He has been diagnosed and treated for cardiovascular illness,
iv.He is currently having complex dental surgery,
v.His conditions are chronic and permanent and will require long-term treatment for the foreseeable future,
vi.He remains fragile, reactive and vulnerable.
The respondent contends that the above ongoing and complex health issues amount to a special circumstance which may make the debt desirable to be waived on the basis to alleviate undue hardship and provide the necessary relief to focus on his health and well-being.
(c) His inability to work; and
The respondent is unable to work. [Dr C], General Practitioner has advised in a report dated 3 March 2025 that ‘due to his age and complex medical and psychological issues…unlikely to be able to engage in paid work’. Further, the respondent’s long-term Consultant Psychologist, [Dr H] has stated in a report dated 4 March 2025 that, “[The Respondent] is unable to work at all, due to the severity of his psychological symptoms (and his medical treatments). He will not be capable of work in the foreseeable future”.
The respondent contends this medical assessment of [Dr C] and [Dr H] indicates that he is not in a position to support himself through employment and as such, is unable to meet the financial obligations associated with the debt.
(d) His subjective stress experienced as a result of the raising of this debt.
The respondent has experienced ‘extra stress’ as a result of this debt and the associated proceedings. [Dr C], General Practitioner, has advised in a report dated 3 March 2025 that the respondent is undertaking ‘ongoing psychological treatment with psychologist [Dr H] in regard to stress related to Centrelink dispute”. And that, “the sooner the matter settle[s] the better for the patient’s wellbeing’.
Further, the respondent’s long-term Consultant Psychologist [Dr H] has provided the following opinion:
[The Respondent] has experienced severe stress regarding his Centrelink debt and his appeal. His symptoms were severe (as measured by DASS) for stress, anxiety and depression. He struggled to cope with severe sleep deprivation and feelings of threat and loss of safety. He reported severe financial distress.
….[The Respondent] is fragile and emotionally reactive to any increases in stress. The issue with Centrelink have caused him severe distress, which has required an increased focus on treatment. It is likely he is going to require ongoing treatment regarding his current issues with Centrelink, as well as ongoing treatment for all his previous trauma and illness.
The respondent contends these opinions of [Dr C] and [Dr H] highlight the serious mental and emotional toll the debt has had on the respondent. The raising of the debt and the prolonged uncertainty surrounding the matter continues to affect the respondent’s mental health and exacerbates his existing conditions. On this background, the respondent contends a waiver of the debt is desirable.
The Respondent gave evidence at the hearing that he was granted disability support pension for a number of medical conditions. He suffers from depression, anxiety and post-traumatic stress disorder which was exacerbated in his 40s and which the Tribunal accepted related to childhood trauma, some details of which the Respondent provided at hearing. He has a number of genetic conditions including Type 2 diabetes, hypertension, angina, and more recently has diagnoses of poor functioning of his heart muscle and diverticulitis brought on by additional stress over the past eight years with Centrelink. He is currently undergoing major dental work.
The Respondent gave evidence that he has been seeing the same psychologist since around 2010. On his better days he is able to self-care, undertake chores around the house and go out in the evening to avoid crowds. On a bad day he struggles to get out of bed and would not eat until late afternoon and would not shower. He described that stress triggers his mental health symptoms. He suffers from varying degrees of panic attacks. He has a small trusted group of friends and has friends overseas due to having worked overseas. In response to a comment in his psychologist’s report that he has experienced neighbourhood trauma, he stated that he has neighbours who are racists and would rather not live on a street with someone like him; it has been very difficult and police have had to intervene. Things have settled down as some of the neighbours have moved, but there have been vexatious claims, for example, that he has tried to run them over in the street.
The Respondent also told the Tribunal at hearing that he has not worked since 2015. He saw a psychiatrist around 2012 or 2014 as his GP thought it might be helpful to see if medication could assist him. He is only prescribed Valium at present and doesn’t take it daily; his medication costs amount to $30 per month and he has minimal outlay for his other conditions; the current dental work he is undergoing is covered through a government plan. He was hospitalised for his mental health condition in 2015 or 2016.
The Respondent provided the Tribunal statements for two bank accounts from July to September 2024, showing minimal amounts coming into and out of the accounts over the three-month period. The Respondent also provided two letters prepared by his treating psychologist and the Tribunal accepted that the letters provided information that was consistent with the evidence given by the Respondent at hearing about his mental health conditions.
The first letter prepared by the psychologist is dated 28 January 2025 was prepared for the non-publication submissions made on behalf of the Respondent and referred to above. In the letter, the psychologist confirms that the Respondent has been treated by the psychologist under Medicare GP Mental Health Care Plans for 17 years and that he was initially treated under an EAP scheme for work issues. The psychologist states that the Respondent has been diagnosed with generalised anxiety disorder, depressive disorder, adjustment disorder with anxiety and depression and elevated anxiety and depression subsequently. The psychologist states that the Respondent’s presentation is consistent with chronic anxiety and depression and with post-trauma symptoms and that he requires regular, ongoing treatment to manage his symptoms.
A second letter was prepared by the Respondent’s psychologist, dated 4 March 2025, and provided some of the same details as those outlined directly above. In addition, the psychologist states that treatment has focused on chronic, severe stress, anxiety and depression and that recently the Respondent had experienced severe trauma and is being treated for post-traumatic stress. The Respondent was described as having complex medical issues as well as chronic anxiety, depression and trauma symptoms, having been diagnosed and treated for cardiovascular illness and having complex dental surgery “that complicates the clinical picture”. His mental health conditions were described as chronic and permanent and he was described as requiring long-term treatment for the foreseeable future. As noted above, the psychologist referred to severe neighbourhood trauma as a result of which the Respondent has felt threatened and unsafe and for which he had received assistance from police to maintain his safety. He was described as remaining fragile, reactive and vulnerable. The psychologist stated that the Respondent is unable to work at all due to the severity of his psychological symptoms and medical treatments and that he will not be capable of work in the foreseeable future. The psychologist also refers to severe stress experienced by the Respondent due to the Centrelink debt and the Tribunal proceedings and to the Respondent having reported severe financial distress.
The Tribunal accepted from the material provided to it that the Respondent has been diagnosed with mental health conditions and physical health conditions and that he has attended a psychologist on a long-term basis for support for his mental health conditions. The Tribunal accepted that the Respondent’s current income is solely his Centrelink pension, that he is unable to work at present or in the foreseeable future and that he has experienced a level of stress associated with the debt and corresponding Tribunal proceedings. However, the Respondent has previously made payments towards the debt by way of withholdings and his current level of income exceeds his stated expenses. Given these matters, the Tribunal did not accept that the Respondent may be forced into a sale of his home or vehicle if required to make further payments towards the debt. Nor did the Tribunal accept the written submissions of the Respondent’s representative that the Respondent has significant medical expenses pertaining to his disabilities on the basis that this was not borne out by either the Statement of Financial Circumstances or the oral evidence of the Respondent at hearing.
While accepting the Respondent has medical conditions, is currently reliant on Centrelink payments, is unable to work and has faced a level of stress over the raising and recovery of the debt and these proceedings, the Tribunal was not persuaded that these circumstances are unusual or uncommon, or that they put the Respondent’s circumstances in a range of circumstances that would make it desirable to waive the debt in this matter. The Tribunal finds that the Respondent had the benefit of amounts to which he was not entitled due to his under-reporting of his income and that there would be little hardship if reasonable withholdings were made from his Centrelink payments to recover the remainder of the debt. Having weighed up all of the factors relevant to the exercise of the special circumstances discretion, the Tribunal has decided to decline to exercise this discretion on the basis that it is not satisfied that the threshold is met for finding special circumstances in this case. Waiver of the debt under section 1237AAD of the Social Security Act is not available to the Respondent in this matter.
There are no other provisions for waiver of the debt that are relevant to the circumstances of this matter and, given this, the Tribunal has concluded that the debt in this matter is recoverable by Centrelink.
DECISION
The Tribunal sets aside the decision under review and substitutes its decision that:
There is a disability support pension debt to the Commonwealth in the amount of $3,658.08 for the period 9 July 2014 to 20 January 2015; and
The debt is recoverable by Centrelink
| Date of hearing: | 20 March 2025 |
| Solicitors for the Applicant: | Mr M Sherman of counsel |
| Solicitors for the Respondent: | Mr M Murray of counsel Instructing solicitor Ms K Bloomfield, Legal Aid (Qld) |
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