Couch; Secretary, Department of Family and Community Services [2000] AATA 1 (5 January 2000)

Last Updated: 7 January 2000

DECISION AND REASONS FOR DECISION [2000] AATA 1

ADMINISTRATIVE APPEALS TRIBUNAL )

) No V1999/149

GENERAL ADMINISTRATIVE DIVISION )

Re SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES

Applicant

And KAY COUCH

Respondent

DECISION

Tribunal Mr B.G. Gibbs, AM, Senior Member

Date 5 January 2000

Place Melbourne

Decision The Tribunal sets aside the decision under review and substitutes therefor the decision as follows: (a) That during the period 10 April 1997 to 6 November 1999 the respondent was overpaid family payment in the sum of $3,484.80; (b) That the sum of $3,484.80 is a debt due to the Commonwealth; and (c) That the matter be remitted to the applicant with the direction that the sum of $3,484.80 is recoverable by the applicant.

(Sgd.) B.G. Gibbs

Senior Member

CATCHWORDS

SOCIAL SECURITY - Family payment - whether overpayment - whether rate of payment properly calculated - whether debt should be written off or waived - decision set aside

Social Security Act 1991 - ss.885, 1069-H18, 1236, 1237AAD

Re Stuart and Secretary, Department of Social Security (AAT 12626, 17 February 1998)

Re Secretary, Department of Social Security and Pyke (1998) 51 ALD 417

Re Secretary, Department of Social Security and Cox (AAT 13050, 2 July 1998)

REASONS FOR DECISION

5 January 2000 Mr B.G. Gibbs, AM, Senior Member

INTRODUCTION

1. This is an application by the Secretary, Department of Family and Community Services, hereinafter referred to in these reasons as "the Department", for review of a decision of the Social Security Appeals Tribunal ("SSAT") dated 8 January 1999.

2. The decision of the SSAT was to set aside the decision of a (Centrelink) delegate of the Department dated 12 October 1998.

3. The decision of the delegate was to raise and recover a debt of $3,484.80, being family payment ("FP") paid to Mrs Kay Couch, the respondent in these proceedings, for the period 10 April 1997 to 6 November 1997, on the grounds that Mrs Couch provided an incorrect estimate of her combined income.

4. The decision of the delegate was affirmed by an Authorised Review Officer ("ARO") on 12 November 1998.

5. In setting aside the decision of the delegate dated 12 October 1998, the SSAT decided to substitute that decision with a new decision "that there is no debt".

REPRESENTATION

6. At the hearing before this Tribunal the Department was represented by Mr D. Perdon, Administrative Law Team, Centrelink. Mrs Couch was self-represented.

DOCUMENTATION

7. The Tribunal had before it documents ("the T documents") lodged by the Department pursuant to section 37 of the Administrative Appeals Tribunal Act 1975.

8. The Tribunal also had before it a written submission prepared by the Welfare Rights Unit, Legal Aid, on behalf of Mrs Couch. The submission was lodged with the Tribunal on 29 November 1999 and a copy was made available to the Department prior to the commencement of the hearing.

WITNESSES

9. The only person to give oral evidence at the hearing was the respondent, Mrs Couch.

ISSUE

10. The issues before the Tribunal are as follows:

* Was Mrs Couch's FP rate worked out having "regard" to an amount of income for a tax year that was an amount estimated by Mrs Couch?

* If it was, was Mrs Couch's income for that tax year more than 110% of the amount estimated by Mrs Couch?

* Was Mrs Couch overpaid FP during the period in question?

* If there is a debt, should all or any of it be waived or written off?

BACKGROUND

11. In a Statement of Facts and Contentions lodged with the Tribunal, the Department conveniently set out the facts relevant to this matter. Those facts, which Mrs Couch confirmed are not in dispute, are as follows:

* Mrs Couch was in receipt of FP. She and her husband were self-employed in a trucking business which they sold in October 1996;

* Mr Couch was in receipt of newstart allowance ("NSA") thereafter, and Mrs Couch became exempt from the FP income test during that period;

* Mrs Couch was sent a recipient notification notice ("RNN") on 30 December 1996, which prescribed a number of notifiable events, one being a requirement that she notify the Department within 14 days if her husband returned to work;

* Mr Couch returned to salaried work in March 1997, as a truck driver. The Department was notified accordingly and Mr Couch's NSA was cancelled. A FP request for details was sent to Mrs Couch;

* The income review was returned on 8 April 1997 having been signed by Mrs Couch and her husband on 1 April 1997. The form contained the following statement and responses:

"As (NSA) has now stopped we need to work out whether your current amount of FP needs to change... To help us work this out we need your and your partner's income and details.

What was your taxable income in 1995/96? - "($7,814)"

Have any of these changes happened to ... your partner in the 1996/97 financial year?... started...work? - "(tick) 11/3/97"

If your combined taxable income has changed since the 1995/96 financial year, we may use your most recent income to work out how much you can be paid ... What do you estimate your taxable income for the 1996/97 financial year will be? - "($17,500)".

If your actual income is 110% more than your estimate for 1996/97 you may have to repay any overpayment that results.

If I have provided an estimate of our income, I agree that my FP is to be recalculated if our actual income is more than 110% of my estimate and that I may have to repay any overpayment that results."

* The Department considered both Mrs Couch's 1995/96 income and her 1996/97 income estimate and determined that her continuing FP should be assessed on her 1995/96 income;

* The respondent was sent a RNN on 8 April 1997, which advised that her FP was based on a combined income of $7,814;

* A data match with the Australian Taxation Office after 31 August 1998 indicated that Mrs Couch's combined 1996/97 taxable income was $58,260. Mrs Couch's FP was re-assessed from payday 20 November 1997 and a FP debt of $3,484.80 raised for the period 10 April 1997 - 6 November 1997, being the difference between the FP received by Mrs Couch and the FP she would have received if her correct 1996/97 income had been maintained as her FP assessment during that period;

* Mrs Couch requested review on the basis that the sale of their truck had resulted in an unexpected increase in their taxable income. If that profit had not been included, the taxable income of Mrs Couch and her husband would have been $32,182;

* The SSAT set aside the debt on the basis that Mrs Couch's 1996/97 income estimate had never formed the actual basis of her rate of FP;

* An amount of $346.19 has been recovered to date by deductions from Mrs Couch's ongoing FP entitlements. Recovery has been deferred pending the outcome of these proceedings.

THE DEPARTMENT'S CONTENTIONS

12. The Department's contentions, which are likewise set out in a Statement of Facts and Contentions, are as follows:

* The payment of FP in a calendar year is normally subject to an income test on combined taxable income in the previous financial year, that is, the rate of FP in 1997 was normally based on 1995/96 income (sections 1069-H2, -H3, -H8, -H13, -H14 of the Act). However, FP recipients whose husbands are in receipt of NSA are exempt from the FP income test during the NSA period (section 1069-H1). This exemption applies to Mrs Couch between October 1996 to March 1997;

* A husband's return to work is a notifiable event for FP purposes (section 1069-H6) and in the present application the Department acknowledges that that notifiable event was notified;

* However, once a notifiable event has occurred, section 1069-H18 requires comparison between the previous financial year income, that is 1995/96, and an estimate (sections 1069-H10 to -H12) of the current financial year income, that is 1996/97, to determine if the tests in section 1069-H18 are met and which financial year should be the basis for the ongoing FP rate after the notifiable event;

* In March/April 1997 the Department had regard to both Mrs Couch's 1995/96 income of $7,814 and her estimate of 1996/97 income of $17,500. While a notifiable event had occurred (section 1069-H18(a)) and the 1996/97 estimate of $17,500 exceeded 110% of the 1995/96 income of $7,814 (110% of $7,814 is $8,595) (section 1069-H18(b)(i)), the 1996/97 estimate of $17,500 did not exceed 110% of Mrs Couch's income free area (section 1069-H18(b)(ii)). In 1997 Mrs Couch's income free area was $24,598 and 100% of $24,598 is $27,057. As only two of the three grounds in section 1069-H18 were made out, Mrs Couch'' 1995/96 income of $7,814 remained the basis of the calculation of her FP rate in 1997, rather than her 1996/97 income estimate of $17,500.

* However, the Department contends that the SSAT erred in finding that unless an estimate actually formed the basis of the rate of FP paid, then "regard" was not had to that estimate "in working out the rate of FP" as these expressions are used in section 885(a) of the Act to create an under-estimated FP debt. Mrs Couch's actual 1996/97 income was $58,260, whereas her estimate was $17,500. If Mrs Couch had provided a better and/or higher 1996/97 estimate in March/April 1997, that is over $27,057, then her FP would have been based on the 1996/97 estimate, rather than the 1995/96 income;

* If the SSAT's position was applied in all cases, FP recipients whose estimate of income was high enough to change their appropriate financial year, but not accurate enough to avoid an overpayment, would be clearly disadvantaged compared to those FP recipients whose estimate was not high enough to change the appropriate tax year but was just as inaccurate, if not more so;

* No special circumstances (other than financial hardship alone) has been advanced such that recovery should be waived in whole or part (section 1237AAD). Neither should recovery be written-off for a period as the debt is not irrecoverable at law and Mrs Couch is in receipt of social security payments from which deductions could be made, without severe financial hardship as that latter expression should be interpreted in respect of persons who approach the Act for support (section 1236).

THE RESPONDENT'S CONTENTIONS

13. As I have indicated, a written submission prepared by the Welfare Rights Unit, Legal Aid, was received in evidence. That submission sets out a number of contentions on behalf of Mrs Couch. It will be noted that in doing so two earlier cases determined by the Tribunal are cited: Re Stuart and Secretary, Department of Social Security (AAT 12626, 17 February 1998) and Re Secretary, Department of Social Security and Pyke (1998) 51 ALD 417. After confirming that the facts of this matter are not in dispute, the submission goes on to state:

"2. Ms Couch submits that the SSAT made the correct decision in relation to the base year because the grounds on which the base financial year may have been altered were not satisfied. In particular, Centrelink did not have regard to her estimate, as is a requirement to change the estimate under s885.

3. Further there was a major obligation to use or follow the estimate to work out the rate in applying s885.

"Having regard to" - the two approaches

In reaching its decision in this case, the SSAT considered the two approaches indicated in the cases, and favoured the approach taken in Stuart. The Tribunal quotes Stuart in part at paragraph 16:

In Stuart DP Forgie said - 'In the context of the scheme of family payments, it can only be said that regard has been paid to an estimate when it has formed the basis, or part of the basis, upon which the rate of payment has been assessed.' In Pyke, a different approach was taken, and it was held that it was sufficient to 'take into account or consider' the estimate.

The AAT in Pyke favoured this weaker interpretation of 'regard' on the following grounds:

'XXI: The normal meaning of the term 'regard to', in the view of the AAT in the context of s885 is to take into account or consider. This means that before determining the rate of family payment the applicant had to consider the respondent's estimate of income ...'

In paragraph 17 of Ms Couch's case, the SSAT set out its reason for preferring the approach taken in Stuart:

'17. The Tribunal prefers the approach taken in Stuart. Firstly, this is consistent with the two explanatory memorandum Social Security (Family Payment) Amendment Act 1992 and Social Security Legislation (Family Measures) Amendment Act 1995, both of which refer to an estimate in 'working out' a rate of payment. Second, although Pyke is a later case, it does not refer to Stuart or the explanatory memorandum.

"Having regard to" - Ms Couch's submission

Ms Couch submits that the approach taken in Stuart is the preferable approach. This is because it is the most consistent with achieving sound decision making. Sound decision making in Ms Couch's view, contains the following elements: clear legislation, strict compliance with legislation, guidelines which achieve the objectives of the legislation, and the appropriate application of those guidelines.

In the social security context, rates calculators are there to set a maximum legal rate of payment, and to determine in a consistent way how that rate is arrived at. In administering beneficial legislation, they secure for the recipient a rate which is determined more objectively. However, this can only occur if the appropriate tools are developed and implemented to ensure that people do in fact receive their maximum legal rate.

In the case of estimates, they are available to ensure that those with dependent children can have access to payments in respect of dependent children during periods when recipients are unable to prove actual earnings.

For Centrelink they provide one basis on which to establish the correct rate, often in the absence of other substantiating information. Within this context, it becomes imperative that once Centrelink is satisfied that the estimate is reasonable in the circumstances (as is required in 1069H12), Centrelink then uses this information to make the best decision about the rate.

From the point of view of sound decision making, a decision-maker would only want to reject an estimate if they were not satisfied of its reasonableness. However, once satisfied (a pre-condition under 1069H12), it makes sense to use it to determine the rate, and indeed, it is reasonable to expect a delegate to do so.

It is also unclear for what other purpose a decision maker might have regard to an estimate, if they did not intend to use it in formulating the rate. To reiterate, there is no question of the validity of the estimate at this stage - it has already been accepted as reasonable.

The fact that the estimate is expected to be used by the Delegate is outlined in the Explanatory Memorandum to the Social Security Legislation Amendment (Family Measures) Bill 1995:

'New Point 1069-H11 : Notice estimating income

Normally, the family payment income test would have regard to the income of a person as assessed by the Commissioner of Taxation. This point would allow a family payment recipient to give the Department an estimate of his or her taxable (and other) income where no assessment by the Commissioner is available.'

Turning now to consider the meaning of 'having regard to' in relation to s.885, the approach taken in Stuart is more consistent with sound decision-making. This is because this section provides for a departure from the base year in particular circumstances. In order to ensure consistent decision making, the delegate would need to be satisfied that the grounds for departing from usual practice were warranted. Section 885 sets out the preconditions for this departure, and they were not satisfied in this case."

SUBMISSIONS

14. Mr Perdon made a number of submissions in response to those made on behalf of Mrs Couch as set out above.

15. As explained by Mr Perdon, FP is normally based on the person's taxable income in the previous year. In the Act this is referred to as "the base year". Thus a person's FP in 1997 would normally be based on that person's 1995/96 taxable income.

16. Circumstances may, however, arise which require the "base" year figure to be re-examined.

17. The first circumstance is when the person requests that a current financial year estimate be used, usually where the person has a decrease in income. This did not occur in the case of Mrs Couch, where there was an increase in income between the "base year" and the current financial year.

18. The second circumstance is where there has been what is called a "notifiable event", that is to say where something has occurred that makes the current financial year income likely to be higher than the "base year". It is not in dispute that a notifiable event occurred in respect of this matter, namely Mr Couch's return to work in March 1997. Nor is it disputed that the Department was notified accordingly.

19. Having been thus notified, the Department was put on notice, as it were, that a recalculation may be required under the Act, to compare whether FP should continue to be made on the 1995/96 financial year estimate, or whether a re-assessment should be made and payment made on the current (1996/97) financial year.

20. Because at the time of the notifiable event the financial year 1996/97 was still current, the Act allows the Department to accept an estimate by Mrs Couch as to what will be the taxable income in that financial year. Where an estimate thus given is accurate, or within 110 per cent of being accurate, no debt will arise. However, where the estimate later turns out to be more than 110 per cent of the estimate provided, FP should be recalculated over the base period as if the actual income had been used (section 885).

21. As explained by Mr Perdon, in March 1997, when Mr Couch returned to work, the Department was faced with either using the "base year" (1995/96) taxable income, or using Mrs Couch's estimate in respect of the current financial year (1996/97). In this connection, section 1069-H18 of the Act states as follows:

"1069-H18. If:

(a) a notifiable event occurs in relation to a person; and

(b) the person's income for the tax year in which the notifiable event occurs exceeds:

(i) 110% of the person's income for the base tax year; and

(ii) 110% of the person's income free area;

the appropriate tax year, for the purpose of applying this Module to the person for the remainder of the family payment period, is the tax year in which the notifiable event occurs."

22. As indicated, a notifiable event occurred in respect of this matter.

23. As to the second requirement of section 1069-H18, that requirement was satisfied in that the "base year" income was $7,814, whereas the estimate was $17,500, which is more than 110% of $7,814.

24. As to the third requirement of section 1069-H18, the "income free area" is the amount of income a person can have before FP is affected.

25. In 1997 Mrs Couch's "income free area" was $24,598. Because the estimate of $17,500 was under the "income free area", the Department in March 1997 chose to retain the 1995/96 "base year" figure as the basis of the FP calculation.

26. It was Mr Perdon's assertion that the Department, however, did have regard for the current financial year (1996/97) estimate, before discarding it for the purposes of actually making the FP calculation.

27. In asserting thus, Mr Perdon invited the Tribunal's attention to certain documents which, he said, supported the contention.

28. The first document was the "Family Payment/Childcare Assistance Request for Income and Asset Details" form (T6, p17), being the review form lodged by Mrs Couch in which she recorded the 1995/96 "base year" taxable income and the estimated taxable income for the current 1996/97 financial year. The form is date-stamped as having been received by the Department and is endorsed in manuscript "Re-assess FPA on '96 income". It is understood this entry was made by a departmental officer.

29. It was Mr Perdon's submission that because in 1997 Mrs Couch's "base year" was 1995/96, there was no requirement for a re-assessment unless the departmental officer looked at the current financial year estimate and decided that it was non-affecting. Mr Perdon asserted that the word "re-assess" means that the departmental officer has looked at both year's income and decided to re-assess still on the "base year" income.

30. Mr Perdon next referred the Tribunal to a computer print-out (T9, p24), submitting that the document shows the income totals held at various times in respect of Mrs Couch's FP.

31. In addressing the content of the print-out, Mr Perdon stated:

"Now what it shows is that the notifiable event was in March 1997, so the left hand column says 'date of effect' and they have both got 26 March '97 which is when that review form was issued to you. If you go across to the next column it talks about financial years and they are obviously the two we are talking about. The next column is headed C and P and that stands for customer and partner. The next column shows the source of the income and IND stands for income declared and EST stands for estimate and the final column, the taxable income column shows the figures that were on that review form.

So as at March 1997, the Department recorded both figures, the base year 1995-96 figure and the estimate current financial year 1996-97 figure and chose to use the base year figure, the lower figure because that section in the Act that I read out earlier, 1069-H18 did not allow the Department to use the estimate. There was no way it could use the estimate at that time."

32. Another document to which attention was invited was a similar computer print-out (T22, p51). Mr Perdon explained the function of the document in the following terms:

"The columns show when the date of effect was. Again that is the date of issue of the review form. The financial years are self explanatory. There are those income totals, the $7814 that you gave for the base year and the $17,500 that are for the estimate. The difference in this screen is that it actually shows which figure will affect your family payment at any particular time and the first column there, FPA stands for family payment basic rate and the 'n's are for no and the 'y''s for yes. So the computer system in March 1997 had both your figures. It had the $7814 and it had the $17,500 and it has put a 'y' against the lower figure because that was the figure on which the calculation was actually paid and it shows an 'n' meaning non-affecting figure because that estimate you gave didn't activate that section 1069-H18."

33. Mr Perdon further stated that the Act provides that once the financial year finishes and the person's tax return is lodged, the Department is entitled to look at the accuracy of the estimate and that, if the estimate is more than 110 per cent out, section 885 of the Act is applicable. That section states as follows:

"885.(1) If:

(a) in working out the rate of family payment payable to a person, regard is had to the person's income for a tax year; and

(b) the income to which regard was had consisted of an amount estimated by the person; and

(c) the person's income for that tax year is more than 110%of the amount of the income on which the determination of the rate of family payment was based;

the person's rate of family payment is to be recalculated on the basis of that income."

34. As pointed out by Mr Perdon, the situation was that whereas the combined taxable income for 1996/97 was estimated at $17,500, the sale of the truck increased the combined taxable income to $58,000. Mr Perdon then went on to submit:

"So in those circumstances, even though there is no suggestion that you put in a false estimate because obviously people don't know what is going to happen between the estimate and the end of the financial year is that your estimate was well over 110 per cent and in that regard the Department is entitled to use that figure to recalculate because if you had put in an estimate closer to $58,000 or $32,000 or anything really, then that is the basis on which your family payment should have been made during 1997.

So what the Department is saying is that regard was had to your estimate because it was looked at, even though it did not actually form the basis of the calculation at the time and various dictionaries and decisions of this Tribunal say that "regard to" means to look at or to take account of and there are those three pieces of evidence to show that the Department did take account of an estimate, that is the stamp done by the officer on the form and two computer print-outs, especially the second one which shows that the computer was recognising the estimate as a non-affecting estimate right the way through from March 1997."

35. It was the Department's contention that had the correct figure been used throughout 1997, Mrs Couch would have received $3,484.80 less in FP than she actually received, and because the estimate was not within 110 per cent of the correct figure, the Department is entitled to seek recovery of the overpayment.

36. As indicated earlier, in making submissions on behalf of Mrs Couch, the Welfare Rights Unit, like the SSAT, referred to Re Stuart and Secretary, Department of Social Security (AAT 12626, 17 February 1998) in which this Tribunal held that, in the context of the scheme of family payments, it can only be said that regard has been paid to an estimate when it has formed the basis, or part of the basis, upon which the rate of payment has been assessed.

37. It was the Department's submission, however, that in Re Stuart there was no recipient letter sent to Mrs Stuart before her notifiable event occurred. Mrs Stuart went back to work, but the only recipient notification notices sent to her by the Department were after she returned to work. Thus there was no notifiable event as such, and that is why the Tribunal held that her current year estimate was not relevant to the FP calculation. In the case of Mrs Couch, however, a notice was sent prior to her husband's return to work, thus there was a notifiable event. This means that the current year estimate had to be considered, even if it was not used in the actual FP calculation. In this connection, Mr Perdon submitted that:

"So, in effect, the Department is saying that the Social Security Appeals Tribunal has taken that Stuart decision a little bit out of context because it is not exactly the same as the current situation. But there are two other decisions which the Department has also sent you, those decisions in Pyke and Cox and the Department is saying those two decisions are exactly on point here. We have had a notifiable event. The base year and the current year estimate have both been looked at. The estimate has not gone into the actual calculation but has then turned out to be over 110 per cent and in that case a debt must exist."

FINDING - WHETHER REGARD HAD FOR CURRENT YEAR ESTIMATE

38. I find from the material before me that in this matter a notifiable event occurred in 1997, and that the Department had regard for both the "base year" (1995/96) income and current year (1996/97) estimate. Because only two of the three grounds pursuant to section 1069-H18 were met (see paragraph 12 above), Mrs Couch's "base year" income of $7,814 remained the basis of the calculation of her FP rate in 1997, rather than her current year estimate of $17,500.

39. I further find that, as submitted by the applicant, the facts in Re Stuart differed in comparison with this matter, in that in the former no notifiable event as such occurred. That being so, I have concluded that Re Stuart should not be followed.

40. It will have been noted that Mr Perdon cited two authorities: Re Secretary, Department of Social Security and Pyke (1998) 51 ALD 417 and Re Secretary, Department of Social Security and Cox (AAT 13050, 2 July 1998) .

41. As Mr Perdon correctly pointed out, the factual circumstances in respect of both these decisions are identical to those of Mrs Couch in that there was a notifiable event. Regard was had for both the "base year" income and the current year estimate. The estimate was not used in the FP calculation and exceeded 110 per cent (section 1069-H18).

ADVICE OF DEBT

42. On 12 October 1998 the Department advised Mrs Couch in writing (T12, p29) as follows:

"The reason for your debt

In April 1997 you asked to be paid Family Payment based on an estimated 96/97 income of $17,500. Your base year (95/96) had been even lower $7,814 so as indicated in your letter of acceptance to pay on details supplied Centrelink paid you on the condition that your taxable income in 96/97 or 96/97 or 97/98 would not exceed $8,595.40. Taxation assessed your 96/97 as $58,260. The excess payment recieved [sic] 10/04/97 to 06/11/97 are [sic] recoverable."

In its advice the Department also provided details of her resultant debt, being in the amount of $3,484.80.

43. In the circumstances of this matter I find that the amount of $3,484.80 is a debt due to the Commonwealth (section 1223(3)).

WHETHER DEBT SHOULD BE WRITTEN OFF OR WAIVED

44. Sections 1236(1), 1236(1A), 1236(1B), 1236(1C), 1236(2), 1236(3) and 1237AAD of the Act set out the circumstances in which a debt due to the Commonwealth may be written off or waived.

45. In a written submission made on behalf of Mrs Couch, the Welfare Rights Unit stated as follows:

"In the event that the Tribunal believes that a debt exists, Ms Couch submits that the debt should be waived on the basis that she did not knowingly cause the overpayment, and that special circumstances, primarily of a non-financial nature warrant this action.

In relation to Ms Couch's actions, she believed that she was doing everything in her power to meet Centrelink's requirements. Her estimate varied considerably from her actual income due to circumstances beyond her control. It was this sale which boosted the income.

In relation to the special circumstances of her case, she submits that the application of the debt recovery provisions would produce an unreasonably harsh result due to the anomalies within the law, for which she is not responsible. In particular, she is not responsible for the complexities of family payment legislation, whereby a debt could occur in some circumstances involving the use of an inaccurate estimate but not in others.

In addition, she submits that her family circumstances at the time were special, and also contribute to the unreasonableness of the application of debt recovery provisions. The nature of the business was, by the time of sale, having a significant detrimental effect on the family. At the time, she had a baby, a toddler, and a child in the early school years. Her husband was working six days a week, and was sleeping on the seventh. The business involved him undertaking return trips to Sydney and Brisbane without relief. This stressful occupation created major problems for him in terms of his family relationships and in terms of his wellbeing.

Notwithstanding that the sale of the business was the only appropriate decision to be made in the circumstances, the situation was made worse by an eventual tax bill that they were not forewarned about by their accountant. This bill caused major disruption, and was not easily resolved.

Secondary Recommendation

That the AAT waive any debt found to be in existence in this matter due to the special circumstances of the case."

46. In the circumstances of this matter the only basis on which write-off might occur is where Mrs Couch has no capacity to repay the debt (section 1236(1A)(b). However, if a debt is recoverable by means of deductions from a person's social security payment, the person is taken to have a capacity to repay the debt unless recovery by that means would cause the person severe financial hardship (section 1236(1C).

47. It cannot, in my view, be said that Mrs Couch has no capacity to repay the debt. It is understood that both she and her husband are now employed and FP is currently being paid based on a 1998/99 financial year estimate of $53,000 in respect of both her and her husband.

48. There is no suggestion in this matter that the debt resulted wholly or partly from Mrs Couch or another person knowingly making a false statement or false representation. Nor is there any suggestion that Mrs Couch or another person knowingly failed or omitted to comply with a provision of the Act.

49. That being so, the question of whether the debt should be waived depends upon whether there are special circumstances (other than financial hardship alone), that make it desirable to waive, and if it is more appropriate to waive than to write-off the debt or part of the debt.

50. While it is clear that Mrs Couch has experienced difficulties as set out on her behalf in the submission prepared by the Welfare Rights Unit, I am unable to identify special circumstances that make it desirable to waive the debt.

DECISION

51. The Tribunal will set aside the decision under review and substitute therefor the decision that in the period 10 April 1997 to 6 November 1997 Mrs Couch was overpaid FP in the sum of $3,484.80 which amount is a debt due to the Commonwealth and recoverable by the Department.

I certify that the 51 preceding paragraphs are a true copy of the reasons for the decision herein of Mr B.G. Gibbs, AM, Senior Member

Signed: Judith Holt, Associate

Date of Hearing 29 November 1999

Date of Decision 5 January 2000

Applicant Mr D. Perdon, Centrelink

Respondent Self-represented