Akhtarkhavari and Department of Family and Community Services [2000] AATA 55 (2 February 2000)

Last Updated: 4 February 2000

DECISION AND REASONS FOR DECISION [2000] AATA 55

ADMINISTRATIVE APPEALS TRIBUNAL )

) No. Q99/258

GENERAL ADMINISTRATIVE DIVISION )

Re FARANAK AKHTARKHAVARI

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Senior Member JA Kiosoglous MBE

Date 2 February 2000

Place Brisbane

Decision The Tribunal varies the decision under review so that the debt owed to the Commonwealth by the applicant is $6,937.64 not $13,511.24, $13,546.54 being incorrectly cited as the amount of the debt by the Social Security Appeals Tribunal.

(Sgd) JA Kiosoglous

SENIOR MEMBER

CATCHWORDS

SOCIAL SECURITY - overpayment of Parenting Allowance - whether the applicant had knowingly omitted or failed to comply with notices provided pursuant to the Social Security Act 1991 - Family Payment - overpayment - 4 discrete debts - 1. debt arising by way of automatic instalment - whether grounds existed for waiver - 2. debt arising by way of under estimate of taxable income - whether applicant notified that Parenting Allowance was to be included in estimate of taxable income - whether special circumstances existed to waive debt - 3. debt arising due to under estimate - method used to calculate entitlement - whether correct method used - 4. duplicate instalment arising upon payment of arrears - whether this amounted to administrative error allowing waiver - Partner Allowance - overpayment - received as partner was on Newstart Allowance - fortnightly forms destroyed - whether "reverse maths" could be used to calculate overpayment - whether grounds existed for waiver

Social Security Act 1991 - ss 885, 891, 950, 1069, 1223, 1224, 1237

Re Judd and Secretary, Department of Social Security 3 March 1998 AAT No 12671

Long Guan Chun v Minister for Immigration, Local Government and Ethnic Affairs (1996) 136 ALR 303

Secretary, Department of Social Security v Danielson (1996) 44 ALD 19

REASONS FOR DECISION

2 February 2000 Senior Member JA Kiosoglous MBE

1. The applicant, Faranak Akhtarkhavari (AAT Ref. No. Q1999/258), seeks a review of a decision of the Social Security Appeals Tribunal (SSAT) of 14 January 1999 (T2), which affirmed the decision of an Authorised Review Officer dated 16 October 1998 (T84), to raise and recover an overpayment of $13,546.54 of Parenting Allowance, Family Payment and Partner Allowance. In fact the debt is $13,511.24, a fact agreed to by the respondent.

2. The evidence before the Tribunal comprised the documents lodged pursuant to Section 37 of the Administrative Appeals Tribunal Act 1975 (T1 to T86), together with eight exhibits tendered by the parties at the hearing. The applicant also gave oral evidence and was represented and assisted by her husband, the subject of the other application (Q1999/224) which application was heard jointly with this current matter. Mr McQuinlan, a Departmental Advocate, represented the respondent (the Department).

3. The alleged overpayment is made up of four discrete debts:

* Parenting Allowance $4,336.30

* Additional Family Payment $8,378.40

* Family Payment $211.20

* Partner Allowance $585.34

4. The issue for the Tribunal to determine is whether the applicant received these payments in excess of her entitlement and whether all or parts of the overpayments are due solely to the administrative error of Centrelink staff.

Parenting Allowance

5. The Department accepts that departmental error contributed to the debt of $4,336.30 as when the applicant's husband notified Centrelink that he had commenced work this information was not noted on the applicant's record and she continued to be paid at the same rate. By a letter dated 7 August 1995 (T9/80) the Department advised the applicant that her Parenting Allowance would be reduced to $131.90 and paid from 17 August 1995. It was stated that fortnightly income of $283.03 had been used to arrive at this rate of payment. The letter also advised the applicant that she should contact Centrelink if her total income went over $283.03 per fortnight. The applicant and her partner were earning more than this at the time but she failed to advise Centrelink. The applicant was actually paid, despite the indication by the letter that she would be paid $131.90, $272 per fortnight and continued to be paid at this rate, or higher, until 13 February 1997.

6. Following access to the applicant's computer records on 12 December 1995, an adjustment was made to the amount of earnings the applicant was receiving and a letter was generated on 14 December 1995 (T11) which stated the applicant would be paid $282.20 every fortnight from 21 December 1995. The letter also informed the applicant that the rate of payment had been worked out using her and her partner's income and asked that she contact the Department within 14 days of a change in the level of either income. On the back of the letter it was stated that the fortnightly income of the applicant used to calculate the entitlement was $0.03. The income of her partner was recorded as being $0.00. The applicant and her husband were earning more than these amounts but the Department was not advised.

7. The applicant finished work with the ANZ Bank on 5 January 1996. She had no entitlement to Parenting Allowance between 17 August 1995 and 4 January 1996 due to her and her husband's income. Upon finishing work the applicant was eligible for payment of Parenting Allowance at the basic rate. As she failed to advise of her husband's income, she continued to be paid at the higher rate. Centrelink was advised of the applicant's husband's income on 29 March 1996 upon lodgement of a Family Payment "Request for Income and Assets Details" form (T13/89). At this point the applicant is considered to have satisfied her notification obligations and any payments after that day were considered to have been solely the result of administrative error on the part of the Department. Parenting Allowance continued to be paid until the applicant advised that she had commenced work on 30 January 1997. Centrelink waived recovery of the overpayment for the period 29 March 1996 to 30 January 1997.

Additional Family Payment

8. During the period 17 August 1995 to 21 December 1995 the applicant was paid $2,016 in additional family payment. Pursuant to Module D of Section 1069 of the Social Security Act 1991 (the Act), it was necessary for the applicant to be in receipt of a benefit to be qualified for this payment. This was the case and the applicant was automatically entitled to the payment during this period, as she continued to receive Parenting Allowance at the higher rate. Due, however, to the fact that the applicant was not entitled to Parenting Allowance for this period, she was not qualified for additional family payment.

9. On 29 March 1996 the applicant provided an estimate of combined taxable income for the 95/96 financial year (T13/89) of $28,560. This was revised on 18 April 1996 to $29,134 (T16/95). The applicant was paid on the basis of these estimates for the period 4 January 1996 to 19 December 1996. The applicant's actual combined taxable income was $38,731 (T64/229 & 231), which was more than 110% of the estimated amount. For the period 4 January 1996 to 13 February the applicant was paid $288 per fortnight whereas her entitlement was only $70.20. From 14 February 1996 to 19 December 1996 the applicant was paid $279.80 per fortnight whereas her entitlement was only $68.10. The total overpayment for the two periods is $6,362.40. Therefore the total debt of additional Family Payment is $8,378.40.

Family Payment

10. On Family Payment payday 11 April 1996 a duplicate Family Payment was made to the applicant. The Department concedes that this was the result of an error. The applicant's entitlement at that time was $68.10, although she was paid an additional $211.20 as a result of her incorrect estimate. The recovery of $68.10 has been waived but the debt of $211.20 remains.

Partner Allowance

11. During the period 23 January 1995 to 23 June 1995 the applicant's husband was receiving Newstart Allowance and the applicant was being paid Partner Allowance. The applicant's husband failed to correctly declare the applicant's earnings on his fortnightly forms; as a result the applicant received Partner Allowance of $585.34 in excess of entitlement. The fortnightly forms lodged by the applicant's husband have been destroyed.

12. The applicant and her husband both gave evidence at the hearing. From this evidence an overview of the family's circumstances can be gathered. The applicant and her husband came to Australia from India as refugees in 1984. They married in Australia and now have 3 children. They both have degrees from tertiary institutions, the applicant having a Bachelor of Science and her husband a Bachelor of Commerce, which were not recognised in Australia upon arrival. The applicant worked part time at the ANZ Bank at Toowoomba as a Customer Service Officer while Mr Akhtarkhavari undertook a Bachelor of Commerce at the local university in order to have his qualifications recognised in Australia.

13. The applicant is on the waiting list to have an operation to repair the ligaments in her feet and is currently being treated by a specialist for this condition. Each of the applicant's 3 children suffers from ear problems. The 2 younger children require operations to have grommets inserted and the remaining child's hearing is low and an operation may be required in the near future. The applicant does not work any more, her husband is working full time and upon the move to Brisbane from Toowoomba her job as a part time bank teller fell through. The applicant is looking for work and has recently completed a Tourism course. The applicant's husband, who works as an accountant for a company called Tomei at Jacobs Well, earns $700 a week gross, $36,000 per annum. He pays $175.10 tax per week and $31.50 a week in HECS. He gets $11.50 a week back for tax assistance. Mr Akhtarkhavari is sometimes forced to ask his employer to lend him money to help with expenses; withholding $50 a week from his wage pays this money back.

14. The applicant and her husband jointly own a house in Toowoomba. They receive $165 a week rent from the tenants, which covers the mortgage repayments of $604 a month. Insurance payments for this house amount to $300 a year. Rates for the house are $1,200 a year. The applicant and her husband pay $165 a week for the house they are renting in Brisbane. They state that they cannot live in the house at Toowoomba as Mr Akhtarkhavari's place of employ is in the Gold Coast area. The applicant and her husband do not want to sell the house at Toowoomba for a number of reasons. Firstly, they are uncertain as to what will happen in the future and if things do not go well they will have a house to go to. Secondly, the house, which they bought for $110,000, is currently valued at an amount less than this and they are reluctant to sell while this is the case. Thirdly, it is impossible to secure a loan to buy another house while the family has only one income. Finally, the applicant and her husband's background and values are such that holding onto the house is considered the only option while they are experiencing financial hardship.

15. All of the applicant's children are at school and the expenses incurred in paying for their books, excursions, music lessons and uniforms are considerable on a single wage. The applicant and her husband own 2 cars, a Ford and a Toyota, repayments for these being $45 and $85 a week respectively. The applicant states that it is necessary for the family to have 2 cars, as there is no public transport available for her husband to get to work. She also requires a car to pick the children up from school and in the event that she finds employment she will need a car. It costs $20 a week for petrol for each of the cars. Maintenance costs for the 2 cars amounts to approximately $100 every 3 months. Registration for both cars is $1,000 a year. Comprehensive insurance for the Toyota is about $350 a year, and for third party insurance for the Ford, $150.

16. The applicant and her husband both stated that they often have to rely on Credit Cards to pay for petrol, make the repayments due on the cars and to pay for medicine. Pharmaceutical products cost the family about $75 a month. The grocery bill for the family is $200 a week and clothing for the family works out to be an average of $30 a week. The applicant and her husband have 3 Credit Cards between them; they owe $2,000 on one and $800 on each of the others. The telephone bill ranges from $100 to $140 per quarter and the electricity bill ranges from $200 to $260 per quarter.

17. During cross-examination Mr McQuinlan asked the applicant if she had been trained to be careful about money in her role as a bank teller. The applicant stated that she had and that in her time in this role she had never experienced any problems. When asked if a second car was necessary the applicant stated that her husband needed one to get to work and she needed one to pick the children up from school. Upon Mr McQuinlan suggesting that the children could use the bus to get to and from school the applicant stated that they were too young and something terrible could happen to them. The applicant also indicated, upon being questioned by Mr McQuinlan, that she was currently receiving approximately $190 a fortnight in Family Allowance, $60 being deducted every fortnight to repay the debt to the Department.

18. Mr McQuinlan directed the applicant's attention to a letter from the Department to the applicant dated 7 August 1995 (T9) informing her that she would be paid $131.90 a fortnight in Parenting Allowance from 17 August 1995. Mr McQuinlan then asked the applicant if she was aware that there was an income test in determining the amount of benefit to be paid. The applicant stated that she was aware of this. The applicant further stated that she understood this letter to be confirmation of her phone call informing the Department that her husband had commenced work. Mr McQuinlan then asked the applicant if she had read the second last paragraph of that letter (T9) which provides:

"Please read the back of this letter carefully. It tells you about your Social Security rights and gives you more details about when you have to contact us."

19. The applicant stated that she had read this paragraph. Mr McQuinlan then directed the applicant's attention to the back of the letter and the top of the left-hand column, which indicated that the fortnightly income used to work out the applicant's entitlement was $283.03. Mr McQuinlan asked the applicant what she thought this was. The applicant stated that she could not be sure if she read this, as it was about 4 years since she had received the letter. Mr McQuinlan then stated that as the applicant had a background that required her to be careful with money it would follow that she would have read the back of the letter and detected the mistake that the Department had made. The applicant stated that she could not be certain if she had read the back of the letter; her husband was living in Brisbane and working at Jacobs Well and she was at Toowoomba alone with the 3 children, 2 of whom were babies then, and still working at the bank. Mr McQuinlan then asked the applicant if she had read the front of the letter. She stated that she had.

20. Mr McQuinlan asked the applicant if she knew what happened to her payments. She stated that she did not know. Mr McQuinlan submitted that they did not go down and in fact went up to $272 a fortnight on 17 August 1995. The applicant was referred to the record of payments (T48/193) and she was asked if she checked her bank account during this period, to which she replied that she had. Mr McQuinlan then put to the applicant that she would have realised she was receiving more money from the Department. She stated that she had called the Department but as the payments continued at the same level she thought she was entitled to the money she was receiving. When asked if she could recall whom she had spoken to, the applicant stated that she could not but remembered telling the Officer she was working two days a week and her husband was working full time. Other than that she stated she could not remember any other details of the conversation. Mr McQuinlan then suggested it was possible she did not make the phone call. In reply the applicant stated firmly that she had made the phone call. Mr McQuinlan then asked if it came as a surprise to the applicant that, the income of her family having almost trebled, she continued to receive the full amount of Parenting Allowance. In reply the applicant stated that she thought the Department had determined the amount they were to be paid at and they were looking at last year's income.

21. Mr McQuinlan also referred the applicant to a letter from the Department to the applicant dated 14 December 1995 (T11) that informed her that she would be paid $282.20 Parenting Allowance a fortnight from 21 December 1995. On the back of this letter it was indicated that the incomes used to work out the entitlement were $0.03 for the applicant, and $0.00 for her husband. Mr McQuinlan asked the applicant if she had read the back of this letter and she stated that she had not. Mr McQuinlan stated that this was unusual considering she was careful with money. The applicant, in reply, stated that in her mind she had thought, "OK, this is what I'm receiving", and did not read the back. The applicant further stated that the Department should have used data matching to determine whether or not she was being paid at the correct amount.

22. During cross-examination of Mr Akhtarkhavari, Mr McQuinlan asked when the family's Ford motor vehicle had been purchased, before or after the overpayment debt arose in July 1998. Mr Akhtarkhavari stated that the car had been purchased after the overpayment arose but that he needed a car so that he could get to work, as there was not any other way of commuting to work. Mr McQuinlan also asked Mr Akhtarkhavari if he earned $36,000 per annum and if he received overtime. Mr Akhtarkhavari confirmed that he earns $36,000 per annum but stated that he does not receive overtime. Mr McQuinlan also asked Mr Akhtarkhavari if the rent he and his wife received from the house at Toowoomba more than covered the mortgage repayments. Mr Akhtarkhavari stated that this was the case and that a little extra was also paid toward the principal.

23. The applicant contends that as Parenting Allowance was first introduced in July of 1995 it was not only new to the public but also to the Department and it is possible that errors could have been made by officers not yet familiar with the system. The applicant also contends the Department was informed of Mr Akhtarkhavari starting work and although the amount of payment they received altered she was not sure how the Department did this and it is not fair that the onus has shifted to her to prove the debt should not be raised. In regard the estimate of taxable family income provided for calculating payment of Family Allowance, the applicant contends that she did not know that Parenting Allowance was a taxable income. She further contends that since the Department was aware of the amount of Parenting Allowance she was being paid the Department should carry the blame for this error. The applicant further contended that special circumstances exist such that part or all of the debt should be waived. These are the financial difficulties her and her family are currently experiencing; the stress her and her husband are under as a result of the debt; the less than ideal health of her and her children; and the pressure and tension she experienced when on her own in Toowoomba for a number of months.

24. The respondent contends that the applicant has a total debt to the Commonwealth of $13,511.24 and that there are no grounds for waiver of this debt pursuant to Section 1237A of the Act, administrative error, or Section 1237AAD, special circumstances. Mr McQuinlan turned the Tribunal's attention to the Sections of the Act that support this outcome.

25. In regard to Parenting Allowance Mr McQuinlan stated that, pursuant to subsection 950(1) of the Act, as it then stood, the Department is able to give a recipient a notice that requires the person to inform the Department if a specified event or change of circumstances occurs, or is likely to occur. Subsection 950(5) of the Act further provides that the length of the notification period must end at least 14 days after the day on which the event or change of circumstances occurs; or the day on which the person becomes aware that the event or change in circumstance is likely to occur. Mr McQuinlan contended that the letters of 7 August 1995 (T9) and 14 December 1995 (T11) were notices issued under section 950 of the Act. Even though the Department failed to cross reference information from the applicant's husband's file in regard his starting work in August 1995 and March 1996, the obligation was still on the applicant to notify the Department of her family's total income as required by the notices. This was not done, as, Mr McQuinlan contended, the applicant did not read the back of the letters, which informed of this obligation. As a result an overpayment of Parenting Allowance of $4,336.30 occurred which Mr McQuinlan contended should be categorised as a debt caused partly by administrative error and partly by error on the applicant's part in failing to notify of her position in accordance with the letters. As such, Mr McQuinlan submitted that the applicant failed to comply with subsection 950(1) of the Act and a debt is due to the Commonwealth pursuant to subsection 1224(1) of the Act. Mr McQuinlan further stated that although the rate of payment was calculated pursuant to Section 1068 of the Act using incorrect income figures, this mistake was not due solely to administrative error and recovery cannot be waived pursuant to Section 1237A(1) of the Act, which requires that the debt be due solely to the administrative error of the Commonwealth and that the debtor received the payments in good faith, before a debt can be waived. Mr McQuinlan also drew the Tribunal's attention to the case of Re Judd and Secretary, Department of Social Security, 3 March 1998, AAT No 12671, for the purpose of defining the phrase "knowingly failing to comply".

26. In relation to whether or not special circumstances existed to enable waiver of all or part of the Parenting Allowance debt, Mr McQuinlan contended that there would be difficulties with the Tribunal making such a finding. He stated that the applicant and her husband describe themselves as middle class, their income is average and the applicant is still receiving $170 to $190 a fortnight in social security benefits. Mr McQuinlan further stated that the family seems to be coping with the cost of life, they have 2 cars, one of which was bought 6 months ago, and they own a property at Toowoomba. As such, Mr McQuinlan contended that the applicant's circumstances were not so uncommon, unusual or exceptional to warrant the application of Section 1237AAD of the Act. Mr McQuinlan contended that this was the case for each of the other debts also.

27. In relation to the Additional Family Payment, Mr McQuinlan stated that the debt runs from 17 August 1995 to 13 February 1997 and comprises two separate periods. The first period is from 17 August 1995 to 19 December 1995. Pursuant to Module D of Section 1069 of the Act, $2,016 was paid to the applicant during this period as she was being paid another benefit, namely Parenting Allowance at the low rate. Mr McQuinlan contended that the applicant was not entitled to this amount, as she was not eligible for Parenting Allowance due to the total income of her family. As the applicant received this amount automatically on the basis of her receiving another payment to which she was not entitled, the receipt of which was due partly to her own error, Mr McQuinlan contended that the debt could not be waived pursuant to subsection 1237A(1) of the Act.

28. The second period runs from 1 January 1996 to 13 February 1997, during which the payment was made in reference to the applicant's estimated income for the 95/96 financial year. Mr McQuinlan stated that the applicant's estimates of $28,560 on 29 March 1996 (T13/90) and $29,134 on 18 April 1996 (T16/99) were not within 110% of the actual verified amount of $38,731. Mr McQuinlan submitted that Parenting Allowance should have been included in the estimates provided and the Department was not in a position to check whether the applicant's estimate included Parenting Allowance. Mr McQuinlan further submitted that as Mr Akhtarkhavari has accountancy skills he should have checked the forms before they were sent. A recalculation of entitlement pursuant to Sections 885 and 891 leads to an overpayment raised under subsection 1223(3) of the Act. Pursuant to subsection 1223(3) of the Act, the difference between the amount received and the correct amount payable, $6,362.40, is a debt payable to the Commonwealth. As the debt was due to the miscalculation of the applicant Mr McQuinlan contended that subsection 1237A(1) of the Act could have no effect on this debt. As such, Mr McQuinlan contended that the total debt of $8,378.40 of Additional Family Payment was raised correctly and should stand.

29. In regards the duplicate Family Payment of $211.20, Mr McQuinlan contended that this arose due to administrative error when Centrelink, by an instalment issued on 7 May 1996 of $837.90, paid arrears back to and including the payday 11 April 1996. Mr McQuinlan also contended that the applicant had already received payment for this payday (Exhibit R3, page 2) and as a consequence she was overpaid and this is a debt pursuant to subsection 1223(2A) of the Act. This Section provides that if a person receives an instalment that has already been received and this amount is not arrears, then that amount is a debt payable to the Commonwealth. The debt was originally calculated to be $279.30, the Family Payment instalment the applicant received each payday, but as she was only entitled to $68.10 Family Payment at the time, the debt was reduced to $211.20, that part of the debt that was due to administrative error being waived pursuant to Section 1237A of the Act. Mr McQuinlan acknowledged that if one were to consider part of this overpayment to be due to administrative error it was hard to see how the whole of the debt could not be considered to be due to administrative error.

30. In regards the Partner Allowance debt Mr McQuinlan submitted that this debt represented excess entitlement during the period 23 January 1995 to 30 June 1995. He contended that the cause of this debt was Mr Akhtarkhavari's under-declaring the applicant's income on his fortnightly forms during the relevant period. Mr McQuinlan further contended that although the forms have been destroyed, there is evidence of income being under declared by looking at the record of Partner Allowance payments found (T40/182), using reverse maths to work out the income declared on a particular fortnight, and comparing this with the applicant's pay records (T37/172 and T38/175). Mr McQuinlan contended that the Federal Court decision of Secretary, Department of Social Security v Danielson (1996) 44 ALD 19, is authority for being able to use reverse maths to deduce the amounts of income declared based on payment records. Mr McQuinlan further contended that as there are a number of payments recorded during the period 23 January 1995 to 30 June 1995, it is improbable that keying errors would account for the difference between the amount of Partner Allowance the applicant was entitled to and the amount actually paid. Mr McQuinlan contended that the more likely reason for the overpayment was that Mr Akhtarkhavari declared net rather than gross income on the fortnightly forms. Consequently, Mr McQuinlan contended that the debt of $585.34 should stand.

31. The issue before the Tribunal is whether the four alleged debts totalling $13,511.24 should stand or there are circumstances existing such that all or part of these debts can be waived pursuant to the relevant provisions of the Act.

32. Turning first to the alleged debt of Parenting Allowance of $4,336.30 for the period 17 August 1995 to 29 March 1996. The Tribunal must determine whether the applicant's failure to read the back of the letters she received contributed to the continuing overpayment of the benefit and, if this is the case, whether special circumstances exist that may allow waiver of all or part the debt.

33. While the applicant stated that she rang the Department some time after 17 August 1995 when she realised she was receiving more money than the letter of 7 August 1995 (T9) indicated she would receive, the applicant did receive a further letter on 14 December 1995 (T11) informing her that she was to receive $280.20 a fortnight that also stated on the back that the combined income used to calculate this amount was $0.03. The applicant indicated during cross-examination that she had read the front of the letters of 7 August and 14 December and would have read the direction to the back of the letter on both of these letters. She also indicated that she could not recall whether she had actually read the back of the letters and attributed her possible omission to do so to the stress and pressure she was under while she was alone in Toowoomba caring for 3 young children and working. The case of Re Judd was distinguished from the current fact situation. In that case the Tribunal found that the applicant had not knowingly failed to comply with the notice provisions of the Act as the attention of the applicant was not properly drawn to the back of a letter which informed him of his rights and obligations. The sentences that were meant to draw the applicant's attention to the back of the letter in that case read as follows:

"Further information regarding your rights and obligations is set out on the back of this form. Please bring this notice with you when making enquiries."

34. Mr McQuinlan contrasted these with the relevant sentences appearing on the letters of 7 August 1995 (T9/80) and 14 December 1995 (T11/84):

"Please read the back of this letter carefully. It tells you about your Social Security rights and gives you more details about when you have to contact us."

35. Mr McQuinlan contended that the notice on the letters the applicant received were clear on the front in comparison to the notice in Re Judd. He also contended that as the applicant was well educated and had experience in the banking industry where care is required when it comes to money, it would be expected that the applicant would have looked at the back of the letter and it was not acceptable for her to contend otherwise.

36. The Tribunal accepts Mr McQuinlan's submissions and finds that the applicant's omission to inform the Department that her and her husband's income was greater than as stated on the back of the letters she received is one that can be attributed to the applicant. As such the Tribunal finds that the overpayment of Parenting Allowance is partially attributable to errors made by the Department and partly attributable to omissions made by the applicant and therefore finds that subsection 1237A(1) of the Act cannot be applied.

37. For special circumstances to exist to enable waiver pursuant to Section 1237AAD, the following conditions must be satisfied:

(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 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.

Note: Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth."

38. In this case it is not necessary to determine whether special circumstances exist as the applicant has failed to satisfy subsection 1237AAD(a)(ii), which requires that a person must not have knowingly failed or omitted to comply with a provision of the Act. By not reading the back of the letters the applicant has knowingly omitted to comply with a provision of the Act, consideration of whether special circumstances exist is not required by operation of the section and therefore waiver of the debt cannot be granted. The Tribunal therefore finds that the debt of $4,336.30 of Parenting Allowance is one that should remain.

39. The next debt to consider is the overpayment of Additional Family Payment. As to the first period 17 August 1995 to 19 December 1995 in the amount of $2,016 referred to by Mr McQuinlan, this amount was paid to the applicant by way of automatic instalments pursuant to Module D of Section 1069 of the Act on the basis that she was in receipt of Parenting Allowance. As the applicant was receiving Parenting Allowance that she was not entitled to by her knowingly omitting to comply with a provision of the Act, it follows that for the same reasons as for the Parenting Allowance debt, this debt cannot be waived pursuant to Sections 1237A and 1237AAD of the Act. The Tribunal therefore finds that the debt of $2,016 of Family Payment should stand.

40. The other part of the debt for Additional Family Payment is for the period 1 January 1996 to 13 February 1997 in the amount of $6,362.40. On an Income and Assets form dated 29 March 1996 (T13) the applicant provided an estimate of her income for the 1995/96 financial year of $4,560 and for her husband for the same period, $24,000. On 1 April 1996 the Department sent a letter to the applicant (T14) which provided, inter alia, as follows:

"The amount of Family Payment we pay you in 19 usually depends on your (and your partner's) taxable income from 1 July 19 to 30 June 19 . We cannot work out the correct rate of Family Payment to pay you. This is because either:

You have not been able to give us your (or your partner's) Tax Notice Assessment (TNA) with your claim for Family Payment

OR

you have not been able to give us taxable income details so that we can review your Family Payment.

There is an easy way for you to give us the information that we need. On the reverse of this letter is a form that you (and your partner) can fill in and send back to us. Once we get the completed form, we will send it to the Australian Tax Office (ATO). The ATO will tell us the amount of your (and your partner's) taxable income that was shown on your TNA(s). If you have not yet lodged your Income Tax Return(s), the ATO will give us your taxable income figures once your TNA has been prepared. "

41. The applicant completed the attached "Request to Provide Tax Return Information to the Department of Social Security " form (T14/92). The date this was received at the Department is unclear, as there is no departmental stamp indicating date of receipt. On 17 April 1996 a letter was sent to the applicant (T15) stating that she could not be paid Family Payment any more as she had not sent the information that was requested. The letter further stated that this had been decided under section 880 of the Act. On an Income and Assets form dated 18 April 1996 (T16) the applicant indicated, at question 6 of the form, that her partner had started or recommenced work on 1 August 1995. At question 8 of the form the applicant indicated that her estimated income for the 1995/96 financial year was $4,560 and for her partner, $24,574. She also indicated that her estimated income for the 1996/97 financial year was nil and for her partner, $28,000. At question 14 of the form the applicant failed to provide the taxable income for her and her partner for 1994/95, or an estimate of such income. Attached to this form was a handwritten letter from the applicant authorising the Department to access the necessary information from the ATO to enable the Department to process her Family Payment (T17).

42. By way of a letter dated 7 May 1996 (T18) the applicant was informed that she would be paid $279.30 Family Payment every second Thursday, starting on 23 May 1996. On the back of the letter it was stated that the combined income used to work out the rate of payment was $29,134. On 2 September 1996 the Department wrote to the applicant (T20). This letter, inter alia, provided:

"I am writing to you about your Family Payment.

The Department of Social Security regularly compares its records with those of other government agencies under a program called the Data-Matching Program. This program is authorised by an Act of Parliament, the Data-Matching Program (Assistance and Tax) Act 1990. I am writing to you under the provisions of section 11 of that Act.

Recent matching with the Australian Taxation Office suggests that there could be differences between the Tax Office's records of your and your partner's taxable income for the 2 financial year and the records held by this Department.

There may be a simple reason for the difference, but if the information from the Tax Office is right you may have been paid more Family Payment than you should have been.

To help clear this up, we need you to provide your and your partner's Tax Notice of Assessment issued by the Australian Taxation Office for the 1994/95 financial year. You can either post this information to the above address or bring it, with this letter, to the office shown at the top of this letter by 30 September 1996.

When we get the information requested we will work out whether or not your payments were right. If you do not reply by 30 September 1996 we will use the Tax Office's information about your income to work out whether or not your payments were right. If they were not right, you will have to pay back any moneys which was paid to you incorrectly."

43. On 5 September 1996 (T21) the applicant sent in the Tax Notice of Assessments for her and her husband for the 1994/95 financial year. Pursuant to these notices the applicant's taxable income for the 1994/95 financial year was $8,277 (T21/112) and for her husband, $16,270 (T21/111). On 21 October 1996 the applicant completed a "Review of your Family Payment and Childcare Assistance" form (T23), the purpose of which, as stated on the Question Guide (T22), was to gather information to work out the applicant's rate of Family Payment for 1997. At question 4 of the form the applicant indicated that the amount on her Tax Notice of Assessment for the 1995/96 financial year was $11,470, and for her husband, $27,261.

44. On 17 February 1997 the applicant rang the Department and informed that she had commenced casual work (T24). By a letter dated 17 February 1997 (T25) the Department thanked the applicant for advising of a change in her circumstances. The letter also stated that because of this it needed to be established whether or not the applicant was entitled to continue to receive the same rate of payment. The letter also told the applicant to complete the enclosed form and return it to the Department within 14 days, failure to do so possibly resulting in the cancellation of family payment. By a letter dated 19 February 1997 (T26) the applicant was told that she would be paid $70.20 for Pharan, Carmel and Ashkan every second Thursday, starting on 27 February 1997. The applicant and her husband filled out an Income and Assets form (T28) on 24 February 1997; the Department received this on 25 February 1997 (T28/135). At question 9 of the form (T28/138) the applicant indicated that she had started or recommenced work on 31 January 1997. Question 11 of the form stated: "Because of the change in circumstances that you told us about at Question 9, we need more details about your estimated taxable income for the financial year (1 July to 30 June) in which the change happened (1996/97 or 1997/98)." For 1996/97 the applicant indicated that her estimated income was $2,970, while that of her husband was $28,920. The applicant also indicated that she and her husband would receive an estimated $1,248 of taxable income each from real estate. The total estimated taxable income was $34,386. At question 18 the applicant also provided the amounts of her and her husband's taxable income for 1995/96 as shown on their tax notice of assessment. The amounts in these boxes are hard to make out but the Department had already had notification of these amounts by way of the review form, which was completed on 21 October 1996 and received by the Department on 24 October 1996 (T23/125).

45. By way of a letter dated 20 May 1997 (T30) the applicant was informed that recent data matching with the Australian Tax Office suggested that there could be a difference between the Tax Office's records of her and her partner's taxable income for the 1995/96 financial year and the records held by the Department. The letter stated that the Tax Office records for the 1995/96 financial year showed the applicant and her partner's taxable income to be $11,470 and $27,261, respectively and that the Department's records showed that the estimates of these amounts were $4,560 and $24,574. It was also stated that there could be a simple reason for this difference but that if the information from the Tax Office was correct the applicant could have been paid more than she should have been. The letter further stated that the applicant needed to provide her and her partner's tax notice of assessment for the 1995/96 financial year and if these were not provided by 23 June 1997 the Department would use the Tax Office's information to work out whether the payments were right.

46. By way of a letter dated 9 September 1998 (T71) the applicant was informed that the decision that an overpayment of Family Payment existed had been changed. The letter continued (i.a):

"This is because an error has been detected in the method used to calculated the debt. A Family Payment debt still exists for the period 17/8/95 to 13/2/97 as you were not entitled to Additional Parenting Allowance. I have looked at your query that you believe you were entitled to a higher rate of payment based on your circumstances at the time. The details used to calculate the original debt that related to these factors have been checked and found to be correct.

This means the amount of debt number 49114301 has been increased from $7,064.70 to $8,378.40 for the period 17/8/95 to 13/2/97."

47. An ARO affirmed this decision on 16 October 1998 (T85/274). The part of the ARO's letter that is relevant to the issue being considered stated (i.a.):

"On 29 March 1996 you provided an estimate of your combined income for the 95/96 financial year of $28,560. You revised that estimate on 18 April 1996 to $29,134. Your actual earnings were $38,731. As this amount was more than 110% of the estimated amounts the rate of FP must be recalculated using your actual income.

From 4 January to 19 December 1996 you were paid $279.80 per fortnight whereas the recalculation shows that you should only have received payments of $68.10. For the period 2 January to 13 February you were paid $288.00 whereas your entitlement was only $70.20. The total overpayment of FP for the two periods was $6362.40.

Section 1223(3) says that if Family Payment has to be recalculated under section 885, then any amount overpaid is a debt to the Commonwealth."

The calculations used to determine the Family Payment debt are found at T60 and T70, respectively.

48. The estimates that the applicant provided on 29 March 1996, $28,560 (T13/90) and 18 April 1996, $29,134 (T16/99), failed to include Parenting Allowance in taxable income. The applicant contends that this was not included, as she was not aware that it was taxable income for the purposes of the Act. The amount of taxable Parenting Allowance actually paid to the applicant for the 1995/96 financial year was $5,644.10, as stated on the Parenting Allowance 1996 Group Certificate (Exhibit A3). If this amount is added to the estimates provided one revises these estimates to $34,204.10 and $34,778.10, respectively. Actual income for the 1995/96 year was $38,737. 110% of both of the revised estimates yields figures of $37,624.51 and $38,225.91, respectively. These two amounts are below the actual income for the year and so an overpayment would still have eventuated if the applicant had included Parenting Allowance as taxable income. However, if the applicant was not properly notified that she was to include Parenting Allowance in her estimate of taxable income such that it could be said to be departmental error that caused the applicant to provide lower estimates than they would otherwise have been, the debt should be remitted to the Department for recalculation. This issue requires consideration of the notice the applicant was given of the inclusion of Parenting Allowance in taxable income.

49. On the form that the applicant provided her estimate of $28,560 the following format was used at question 6, Estimated Taxable Income for 1995/96 (T13/90):

"(If your combined taxable income has changed significantly since the 1994/95 financial year, we may use your most recent income to work out how much you can be paid.)

(Note: Income includes taxable income from government pensions or benefits.)

What do you estimate your taxable income for the financial year 1995/96 to be?"

50. Underneath this question space was provided for the estimates, the two boxes being marked "Your Income" and "Your partner's income". Underneath this the following was stated: "If your estimate is not within 10% of our actual income, you may have to pay any overpayment that results."

51. On the form that the applicant provided the estimate of $29,134 the following heading was printed above question 8 (T16/99):

"Estimated Income for the current financial year

Because of the change in circumstances that you told us about at Question 6, we need more recent details about your estimated taxable income for the current financial year (1 July to 30 June)."

52. The format of the question then was a statement "Please complete the following:" with four columns, one each for the person filling in the form and their partner for 1995/96 and 1996/97. The question has beside the columns different types of taxable income that the person filling in the form has to complete. The two types of taxable income that are relevant here are:

"Taxable income from government pensions or benefits (e.g. DSS payments, Veterans' Affairs pensions, Austudy, do NOT including Family Payment)",

and:

"Taxable income from your employer(s) (e.g. earnings, overtime payment, termination payment, long service)".

53. Underneath the question is a box stating: "If your estimate is not within 10% of your actual income, you may have to repay any overpayment of Family Payment and/or Childcare Assistance."

54. The meaning of the word "notified" was considered in relation to Section 478 of the Migration Act 1958 by Jenkinson J in Long Guan Chun v Minister for Immigration, Local Government and Ethnic Affairs (1996) 136 ALR 303 at 307:

"...in determining the proper construction of the word 'notified', so as to require, for example, that the communication be intelligible to the person adversely affected by the decision."

55. The form of 29 March 1996 (T13) asks the person filling in the form to include in their estimate taxable income from government pensions or benefits. For any person filling in the form it would be reasonable to assume that not all income from government pensions or benefits would be taxable. As such this form could not be said to intelligibly notify the person filling it out of the consequences of their failing to include their Parenting Allowance in their estimate of taxable income. The form of 18 April 1996 asks the person filling it out to provide an estimate of taxable income from government pensions or benefits and gives the examples of DSS payments, Veterans' Affairs pensions, Austudy, not including Family Payment. The same mistake could be made here. If one were to reasonably assume that not all income from government pensions or benefits were taxable one would not know which DSS payments in particular to include in their estimate and as such the form could not be said to intelligibly notify the person filling it out of the consequences of their failing to include Parenting Allowance in their estimate of taxable income.

56. As such, the calculation of the debt of Family Payment for the period 4 January 1996 to 19 December 1996 should be remitted to the Department on the basis that the estimates provided by the applicant on 29 March 1996 and 18 April 1996 include taxable Parenting Allowance.

57. The debt may not need to be remitted to the Department if there are special circumstances that can be found to exist to waive the debt or part of it pursuant to section 1237AAD. In this instance the applicant has not knowingly made a false statement or false representation (subsection 1237AAD(a)(i)), nor has she knowingly failed or omitted to comply with a provision of the Act (subsection (a)(ii)). As such it is open to the Tribunal to consider under subsection (b) whether special circumstances exist, other than financial hardship alone, allowing waiver of the debt under subsection (c). The leading case on the interpretation of the expression "special circumstances" is probably Re Beadle and Director-General of Social Security (1984) 6 ALD 1. In that case, the Tribunal said (i.a.) stated:

"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."

58. On the evidence of the applicant and her husband it is clear that the applicant and her family are experiencing financial hardship, their expenses outweighing Mr Akhtarkhavari's income. By operation of subsection (b) there needs to be more than financial hardship alone though. While the Tribunal acknowledges that the applicant would have been under a great deal of stress and pressure when she was in Toowoomba with her children alone, this cannot be taken into consideration here as the applicant had resumed living with her husband by the time the estimates of income were provided in March and April 1996. The applicant gave evidence at the hearing of how she was on the waiting list to have an operation to repair the ligaments in her feet and how her 2 younger children would require operations to have grommets inserted in their ears. She also gave evidence that her oldest child may need an operation to rectify his hearing problem in the near future. Considering the added expense and stress that these operations will mean to the family and, considering the further stress that having the remitted debt stand would mean, the Tribunal finds that there are unusual circumstances in existence such that the debt of Family Payment of $5,491.20 for the period 4 January 1996 to 19 December 1996 should be waived.

59. The debt of Family Payment of $871.20 for the period 2 January 1997 to 13 February 1997 also requires consideration. For 1997 the appropriate tax year for assessment of the applicant's rate of payment, by operation of points 1069-H11 and H12 of the Act, is the 1995/96 financial year. This remains the appropriate tax year despite the fact that the applicant had started work on 31 January 1997, a notifiable event for the purposes of the Act, as this did not change the base year pursuant to points 1069-H14 to H17. Point 1069-H13, "Current tax year to be retained for consecutive years in certain circumstances" also requires consideration:

"If:

(a) Family Payment is payable to a person:

(i) on the last Family Payment payday in one calendar year; and

(ii) on the first Family Payment payday in the next calendar year; and

(b) the person's Family Payment rate on the last Family Payment payday in the earlier of the 2 calendar years is worked out on the basis that the person's appropriate tax year is the tax year in which that payday occurs ( the "current tax year"); and

(c) the person's Family Payment rate on that payday was worked out on that basis because the person had made a request under point 1069-H19; and

(d) the person's income for the current tax year is less than the income for the base tax year;

the person's appropriate tax year, as from the beginning of the later calendar year, is the current tax year and not the base tax year unless the income for the base tax year is less than the person's income free area."

60. This is not applicable as subsection (b) is not satisfied as at the time the applicant was being paid on her estimate of the 1995/96 tax year and not the current tax year of 1996/97. By operation of the conjunctive requirements of the point, it therefore does not apply. The applicant had provided her and her partner's income, as on their tax notice of assessments for 1995/96, on 21 October 1996 (T23), the total of which was $38,731. The rate of payment for the period 2 January 1997 to 13 February 1997 should therefore have been calculated using the amount of $38,731. If the Department had used this amount there would have been no overpayment. As such, pursuant to Section 1237A of the Act, the overpayment of $871.20 of Family Payment for the period 2 January 1997 to 13 February 1997 should be waived.

61. The next debt that requires consideration is that of $211.20 of duplicate Family Payment, which arose as a result of a payment of arrears instalment of $837.90 on 7 May 1996 (Exhibit R3, page 2). A payment had been missed between 11 April 1996 and 7 May 1996 so on 7 May arrears were paid in the amount of $837.90, which is 3 times $279.30, the rate of entitlement the applicant was on at the time. As such the applicant received $279.30 which she was not supposed to. The rate the applicant was supposed to be receiving at the time was $68.10. The difference between $279.30 and $68.10, $221.20, is said to be a debt due to the Commonwealth. The Tribunal does not accept this line of reasoning. Subsection 1223(2A) of the Act deals with duplicate instalments and provides:

"If:

(a) an amount has been paid to a person by way of an instalment of a social security payment; and

(b) another amount ('the later amount') is paid to the person in respect of the same instalment; and

(c) the later amount is not a payment of arrears; and

(d) the later amount would not otherwise be a debt due to the Commonwealth;

the later amount is a debt due to the Commonwealth."

62. However, this debt has arisen solely because of administrative error and, given that the applicant received this payment in good faith, should be waived pursuant to section 1237A of the Act. The applicant should not have received the extra $279.30 at all, to say that part of the debt that the applicant was entitled to receive should be waived is absurd. Accordingly, the debt of $211.20 of duplicate Family Payment should be waived.

63. Turning finally to the debt of Partner Allowance of $585.34. This debt represents excess entitlement for the period 23 January 1995 to 30 June 1995. The applicant was in receipt of Partner Allowance from 23 January 1995 to 26 June 1995 (T40/182). The applicant was not required to lodge fortnightly forms for the payment of Partner Allowance as her husband had been in receipt of Newstart Allowance. He made declarations about his wife's income on his fortnightly forms and this affected the rate of Partner Allowance paid to the applicant. The fortnightly forms lodged by the applicant's husband for the period 23 January 1995 to 1 August 1995 have been destroyed. As such it is not possible to check whether the applicant's husband did indeed provide underestimates of his wife's income, leading to the overpayment. Mr McQuinlan contended that "reverse maths" could be used to calculate the amount that would actually have been declared using the payment records of the applicant for the relevant period. Authority for this method of calculation was garnered from the case of Secretary, Department of Social Security v Danielson (1996) 44 ALD 19. In particular Mr McQuinlan referred the Tribunal to an extract found at page 10 of the judgment:

"It was open for the AAT to find that, as a matter of mathematical logic, if the respondent received Newstart Allowance benefits in amount "X" for a given fortnight then, having regard to the way in which the amount of benefit payable to the respondent was calculated by the applicant, the respondent must have declared gross income in an amount "Y" in order to receive that benefit "X". By rejecting such method of proof and concluding that there was no evidence upon which to properly base findings as the amounts of gross income declared by the respondent on the continuation forms, the AAT erred in law. "

64. The Tribunal accepts that the debt has been correctly determined by the use of reverse maths and, given that it would be highly unlikely that this debt resulted from serial keying errors on the part of Centrelink staff, the Tribunal finds that the debt should stand, there being no grounds for its waiver. Special circumstances cannot be used to waive this debt as the applicant's husband has knowingly failed or omitted to comply with a provision of the Act (subsection 1237AAD(a)(ii)) by his supplying the wrong income figures for his wife.

65. Accordingly, the Tribunal finds that:

1. the debt of Parenting Allowance in the amount of $4,336.30 for the period 17 August 1995 to 28 March 1996 should stand;

2. the debt of Family Payment in the amount of $2,016 for the period 17 August 1995 to 21 December 1995 should stand;

3. the debt of Family Payment in the amount of $6,362.40 for the period 4 January 1996 to 13 February 1997 be waived;

4. the debt of $211.20 of duplicate Family Payment be waived; and

5. the debt of Partner Allowance in the amount of $585.34 for the period 23 January 1995 to 30 June 1995 stands.

66. As such, the decision of the SSAT of 14 January 1999 is varied such that the debt the applicant owes to the Commonwealth is $6,937.64, not $13,511.24, $13,546.54 being incorrectly cited as the amount of the debt by the SSAT.

I certify that the 66 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member JA Kiosoglous MBE

Signed: Denise Burton

Secretary

Date/s of Hearing 17.12.99

Date of Decision 2.2.00

Counsel for the Applicant

Representative for Applicant Mr K Akhtarkhavari (applicant's husband)

Counsel for the Respondent

Solicitor for the Respondent Mr R McQuinlan, Departmental Advocate