XTRM; Secretary, Department of Social Services and (Social security second review)
[2025] ARTA 1029
•14 July 2025
XTRM; Secretary, Department of Social Services and (Social security second review) [2025] ARTA 1029 (14 July 2025)
Applicant/s: Secretary, Department of Social Services
Respondent: XTRM
Tribunal Number: 2024/3884
Tribunal:Senior Member J Walsh (second review)
Place:Brisbane
Date:14 July 2025
Decision:The decision under review is set aside and, in substitution, the Tribunal decides that the Respondent owes a debt to the Commonwealth in the amount of $45,845.59 for the period 1 October 2012 to 4 September 2023 and that this debt is to be repaid.
Statement made on 14 July 2025 at 5:49pm
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: SOCIAL SECURITY – DSP debt based on increases to partner’s periodic compensation not taken into account – where AAT misled as to partner’s receipt of a compensation affected payment at the relevant time – debt found to exist – whether waiver due sole administrative error available – whether special circumstances exist which make it desirable to waive recovery – finding waiver not appropriate and debt is to be repaid – decision under review set aside.
Legislation:
Social Security Act 1991, ss 1223, 1237A, 1237AAD
Social Security (Administration) Act 1999, ss 66A, 237Cases:
Secretary, Department of Social Security v Hales [1998] FCA 219:Statement of Reasons
Background
The Applicant Secretary seeks review of a first review decision made by the Administrative Appeals Tribunal (AAT) on 3 May 2024 which determined that the basis of a significant disability pension support (DSP) debt said to be owed by the Respondent was incorrect and remitted the matter to the Secretary for reconsideration in accordance with directions. The Secretary applied for second review by the AAT on 7 June 2024.
On 14 October 2024, the AAT was replaced by the Administrative Review Tribunal (ART). AAT applications for review not finalised before that date transitioned to the ART to be considered and finalised in a manner the ART considered efficient and fair: clause 24, Schedule 16 to the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024. As far as possible, such applications were to be continued under the ART legislation.
The subject debt arose because the Respondent’s husband had been receiving weekly workers’ compensation payments and increases to those payments had not been taken into account in the DSP paid to the Respondent over many years. The AAT found that her husband was not qualified for and receiving a compensation affected payment (a defined term which included sickness allowance) at the time of the accident which gave rise to his entitlement to periodic compensation payments. According to the AAT, this meant that assessing these weekly compensation payments as ordinary income in the debt calculations was wrong, since section 1174 of the Social Security Act 1991 (Act) applied and required a different and more favourable treatment in the circumstances. The AAT set aside the debt decision and remitted it for reassessment. The reasons for and terms of decision also indicate the AAT purported to set aside a decision to cancel the Respondent’s DSP. There is no evidence before me of any such cancellation decision having been made; I accepted the Secretary’s assurance there had been no cancellation decision that I needed to consider.
The debt
At hearing, the evidence established that the Respondent’s husband had successfully applied for and was in receipt of sickness allowance from May 2002. He received workers’ compensation payments subsequent to a serious fall from a roof on 23 September 2002. He was still receiving sickness allowance payments at that time. His sickness allowance was cancelled some time later, after he commenced receiving weekly workers’ compensation.
I accept that the Respondent’s husband was qualified for and receiving a compensation affected payment, namely sickness allowance, at the time of the event which gave rise to his entitlement to compensation payments, his fall on 23 September 2002. It follows that paragraph 1174(1)(c) of the Act is not satisfied so that section 1174 does not apply. I should add I consider there was no fault in the AAT finding to the contrary. The Secretary accepted that the material provided to the AAT did not include evidence of the Respondent’s husband’s receipt of sickness allowance. Since the Secretary’s obligation was to provide to the AAT all material relevant to the DSP debt decision, this was a serious failure which resulted in the AAT being misled on the point. The Respondent also gave evidence before the AAT that her husband was not on any Centrelink payments at the time of his accident in September 2002, contrary to the true position. It is unsurprising that the AAT made the finding it did in the circumstances.
The Respondent received DSP from February 2011, based on injuries she sustained in a car accident many years ago. DSP is an income-tested payment. Where a person is partnered, the income test provisions in the Act take account of any income received by both members of a couple. Since section 1174 does not apply, I find the weekly compensation payments received by the Respondent’s husband fell to be assessed as ordinary income. This is the basis upon which the debt here of $45,845.59 for the period 18 September 2012 to 4 September 2023 was originally calculated. The Secretary’s representative, Ms Vetter, explained that the start date of the debt should be 1 October 2012, being the first date in the evidence from GIO Insurance of the amount of periodic workers’ compensation here relevant; the amount of the debt remained the same. Section 1223(1) of the Act provides, in general terms, that an overpayment for any reason is a debt due to the Commonwealth. The reason the Respondent was overpaid for more than 10 years was that Centrelink, in assessing her DSP entitlements, was unaware of the true level of her husband’s workers’ compensation payments. The Respondent explained these payments were indexed twice yearly. She did not advise Centrelink of these increases because she did not understand she was required to do so; she thought that Centrelink was somehow automatically notified of the increases by other means. I am satisfied the Respondent incurred a debt in the sum of $45,845.59 in the circumstances.
Consideration
The real issue in this case is whether waiver of recovery of some or all of the debt owed by the Respondent is appropriate. A decision to waive recovery means repayment is not required.
As noted above, the Respondent received DSP from February 2011. She was sent several notices relevant to the debt period which included obligations on her to notify Centrelink of certain matters likely to affect her DSP payments. The notices were sent by post and the Respondent accepted she would have received them in the ordinary course. I note there are deeming provisions in the Social Security (Administration) Act 1999 (Administration Act) and the Acts Interpretation Act 1901 which operate to deem service in any event: see subsection 237(1) of the Administration Act as to notices of decision and sections 28A and 29 of the Acts Interpretation Act as to notices which include recipient obligations. There were two forms of obligation particularly relied upon by the Secretary. Notices sent to the Respondent dated 17 February 2011 and 2 May 2011 required her to notify Centrelink within 14 days of certain things if they happened or were likely to happen. The list of matters requiring notification included “if your combined income, not including financial investments or maintenance, increases”. The Secretary submitted that when her husband’s weekly compensation payments increased, the Respondent’s combined income increased. Her failure to notify of this increase was a failure to comply with her notification obligations. I am not persuaded by that analysis. Whilst many in the community will understand that the income of each partner in a marriage or marriage-like relationship affects their social security entitlements, I consider the words in these notices have to be given their ordinary meaning. Commonly understood, a person’s combined income is apt to encompass the total of their income from each of their sources of income; a person’s combined income would not ordinarily include their partner’s income. In terms, the “combined increased income” obligation makes no specific reference to the Respondent’s husband’s income. This can be readily contrasted with the immediately following obligations to notify listed in the notices: “you or your partner start work or go back to work…”; “you or your partner stop work…”; “you or your partner start any form of profession, business, trade or self-employment…” etc. For completeness, I also mention the further obligation to notify relating to receipt of compensation: “If you receive any compensation: you must tell us within 7 days if you or your partner become aware that you will receive or have received compensation”. This obligation is directed to receipt of compensation by the Respondent and not her husband. Since she did not receive compensation payments herself, there was no failure to comply in this respect. It follows I do not accept that the Respondent failed to comply with obligations concerning her income under these notices.
Further notices dated 11 November 2013, 9 October 2018 and 25 July 2023 sent to the Respondent included an obligation to notify Centrelink within 14 days if “your or your partner’s gross income changes.” It is clear her husband’s weekly workers’ compensation payments were income which changed twice-yearly due to indexation. When asked why she did not notify Centrelink in response to these notices, the Respondent explained she understood from the notices that only changes to income from employment had to be advised. This understanding was wrong. A fair reading of these notices shows the obligation to notify was of broad import; the explanatory information in the notices referred to income from a variety of sources, including pensions, annuities, rent, regular gifts and regular payments. I am satisfied the Respondent failed to comply with her obligations under these notices to notify of increases to her husband’s weekly compensation payments.
The evidence revealed the Respondent and her husband own their own home; there is no money owing on the property. Their combined income currently exceeds their expenses, as detailed by the Respondent, by more than $1,000 per month. She is managing to put money away into what she referred to as a “future fund”; their accumulated savings were more than $15,000. She explained her husband had been offered a settlement which would result in his weekly compensation payments being commuted to a lump sum. They would then have to meet his ongoing medical expenses themselves. She indicated they were unlikely to accept this offer, in which case his weekly payments would continue for about two more years. After that, he would have to go onto the age pension which is at a lower rate than he currently receives. The funds put away will help meet the cost of increasing expenses in the future, given their combined income will be reduced.
Should the debt be repaid?
Write-off, or a temporary delay in recovery, under section 1236 of the Act is only available in limited circumstances specified in subsection 1236(1A), none of which applies in this case. In particular, I am satisfied that the Respondent has a present capacity to repay over time and that deductions from her ongoing DSP payments would not cause her severe financial hardship.
In addition to my analysis of the relevant notices sent to the Respondent, subsection 66A(2) of the Administration Act provided that a person such as the Respondent was required to notify of any event or change of circumstances which might have affected her payment. Plainly, the periodic increases to her husband’s weekly compensation payments might have affected (and have affected) the Respondent’s DSP payments. It follows she was required by section 66A to notify of these increases. Her failure to do so was a breach of her obligations under section 66A of the Administration Act.
One of the requirements before waiver of any proportion of a debt under subsection 1237A(1) of the Act is open here is that the proportion of the debt be solely attributable to Commonwealth administrative error. In the circumstances, I find that waiver under subsection 1237A(1) is not open, since the Respondent’s debt was caused by her failure to notify Centrelink of periodic increases to her husband’s weekly compensation payments; it was not caused by sole Commonwealth administrative error. Had she notified Centrelink of these increases in a timely manner, as required, she would not have been overpaid during any of the debt period.
The Respondent’s case is really about waiver under section 1237AAD of the Act, given her “special circumstances” to use the language in this provision. Putting to one side other criteria, the essential test in this context is whether there are special circumstances (other than financial hardship alone) that make it desirable to waive recovery of the whole or part of the Respondent’s debt: subparagraph 1237AAD(b). Special circumstances here are understood to mean circumstances that are unusual or uncommon and which might warrant a departure from the general rule that overpaid public monies should be repaid. The Respondent’s position is she didn’t understand she was required to notify Centrelink of increases to her husband’s weekly compensation payments. Any failure on her part was unintentional. She said she had always done whatever Centrelink asked of her. She relied on a number of difficult and unfortunate general circumstances, including illness, injuries, the deaths of loved ones, numerous medical appointments and significant related travel, her extensive history of providing care to those close to her, especially her husband, and the stress caused by the subject debt. She wanted to challenge any decision she should repay the debt “on a point of principle”.
The Respondent accepted my observation that her financial circumstances were better than many who rely solely on social security payments. She agreed she could afford the previous repayments by way of $20 per fortnight withheld from her pension. However, she nevertheless considered the debt decision and any requirement to repay to be unfair; she was seeking a compassionate overall assessment of her case. She referred to the stress of having the outstanding debt to deal with.
During the hearing, I noted that there was reference to an earlier carer payment debt of $1,071.99 the Respondent had incurred in May 2010: T6, p 39. The basis for this debt was not apparent. At the conclusion of the hearing, I made directions including that the Secretary provide material to explain the basis of this earlier debt. The Secretary subsequently provided information and documents which establish that not all of the Respondent’s husband’s income had been taken into account in assessing her payments between March 2005 and October 2009. The debt notice dated 20 May 2010 explained that the basis of the debt was that the “correct amount of your partner’s compensation” had not been taken into account.
In her written response, the Respondent referred to her difficult and unfortunate personal and family circumstances leading up to and including October 2009 when her mother passed away. She maintained any oversight or failure was not knowing or reckless or intended to deceive. She repeated her submission seeking waiver on the basis of her unusual and, I infer, special circumstances.
Having incurred an earlier debt based on her husband’s weekly workers’ compensation payments not being correctly assessed, it might have been expected that the Respondent should have been alive to the need to notify Centrelink of periodic increases to his payments thereafter. Certainly, given the basis for the earlier debt, there seems to be no rational basis for her understanding the increases to her husband’s payments were somehow automatically notified to Centrelink by other means. It was her obligation to inform Centrelink of these increases. Her failure to do so in relation to the debt I am considering leaves open the possibility of finding that the Respondent knowingly failed to comply with her notification obligations in this context. Such a finding would preclude the availability of waiver under section 1237AAD of the Act: see subparagraph 1237AAD(a).
I considered whether to hold a further hearing to hear evidence from the Respondent on this issue. I am certainly reluctant to make any adverse finding of knowing failure without taking that step. Ultimately, given the view I have come to, I decided it was unnecessary to make a specific finding on this issue.
In the circumstances, I am prepared to proceed on the basis that the Respondent’s failures to notify Centrelink of increases to husband’s payments were not knowing or intentional. However, that does not mean recovery should be waived. The Respondent has had the benefit of overpaid monies in a large total sum over a lengthy period. This no doubt contributed to the family’s improved financial circumstances compared with more difficult earlier periods, involving bankruptcy in the past, which the Respondent referred to at hearing.
The starting point under the Act is that overpaid public monies should be repaid. As the Federal Court observed in Secretary, Department of Social Security v Hales [1998] FCA 219:
"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."
I have carefully considered the Respondent’s submissions and supporting material. Whilst I accept that the Respondent and her husband experienced several difficult and stressful circumstances before and during the debt period, I am not satisfied that these matters, individually or collectively, are such as to make it desirable to waive recovery of any part of the debt. Apart from notices she received, the 2010 carer payment debt, being based on her husband’s workers’ compensation payments, should have put her on notice of the need to keep Centrelink informed of increases to his payments during the debt period from 2012 onwards. Given the Respondent’s failure to notify of increases to her husband’s weekly payments over a protracted period caused the debt and her clear capacity to make appropriate repayments, this is a case where I consider there is no proper basis to depart from the general principle that overpaid public monies should be repaid.
For completeness, I am satisfied there are no circumstances in this case which might justify a finding of special circumstances under section 1184K of the Act to treat the Respondent’s husband’s compensation payments as having not been made.
Conclusion
I am satisfied that the Respondent was overpaid DSP in the amount of $45,845.59 for the period 1 October 2012 to 4 September 2023 and that this amount constitutes a debt owed to the Commonwealth. I find there is no proper basis to write-off recovery of the debt. I am also satisfied there is no proper basis to waive recovery of the whole or any part of the debt. This means the Respondent is required to repay the debt in full.
Decision
The decision under review is set aside and, in substitution, the Tribunal decides that the Respondent owes a debt to the Commonwealth in the amount of $45,845.59 for the period 1 October 2012 to 4 September 2023 and that this debt is to be repaid.
Date of hearing: 10 June 2025 Date final submissions received: 8 July 2025 Solicitor for the Applicant: Ms J Vetter, HWL Ebsworth Lawyers Respondent: In person
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