Lloyd and Secretary, Department of Family and Community Services [2000] AATA 95 (14 February 2000)

Last Updated: 13 March 2000

DECISION AND REASONS FOR DECISION [2000] AATA 95

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N1999/580

GENERAL ADMINISTRATIVE DIVISION )

Re CHERYL ETHEL LLOYD

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Ms S M Bullock, Member

Date 14 February 2000

Place Sydney

Decision The decision under review is affirmed.

(Sgd S M Bullock)

..............................................

Member

CATCHWORDS

SOCIAL SECURITY - family payment/family allowance - overpayment, debt, notifiable event - estimate of income - waiver of debt - administrative error - special circumstances

Social Security Act 1991 - ss 6, 838, 872, 873, 885, 1067G-F12, 1069-H5, 1069-H6, 1069-H13, 1069-H14, 1069-H16, 1069-H17, 1069-H18, 1223, 1237, 1237A, 1237A(1A), 1237AAD

Re Gerhardt and Secretary, Department of Employment, Education and Training (AAT 10941, 17 May 1996)

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

Secretary, Department of Social Security v Hales (1998) 82 FCR 154

Groth and Secretary, Department of Social Security (1995) 37 ALD 797

Re Colaiacolo and Secretary, Department of Social Security (AAT 2109, 24 April 1985)

REASONS FOR DECISION

Ms Sue Bullock, Member

1. This is an application for review by Mrs Cheryl Ethel Lloyd ("the Applicant") against a decision of the Social Security Appeals Tribunal ("the SSAT") made on 8 April 1999, that Mrs Lloyd should repay a debt of $563.70 of Family Payment and Family Allowance for the period 13 November 1997 to 8 October 1998. The SSAT decided there was no sole administrative error by the Department of Family and Community Services and no grounds to waiver the debt because of special circumstances. The SSAT's decision affirmed a decision of an Authorised Review Officer ("ARO") of the Department of Family and Community Services made on 23 November 1998 (T24). The original decision of a delegate of the Department of Family and Community Services ("the Respondent") was made on 21 October 1998 that Mrs Lloyd had been overpaid Family Payment and Family Allowance in the amount of $563.70.

2. A hearing was held before the Administrative Appeals Tribunal ("the Tribunal") in Sydney on 19 October 1999. Mrs Lloyd provided oral evidence, as did her husband, Mr Donald Murray Lloyd. Mr Lloyd also represented Mrs Lloyd. The Department was represented by Ms S Fahey, Departmental Advocate. The Tribunal took into evidence documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 and the following exhibits:

Exhibit Number Description Date

A1 Letter to Mr C Freeman, Administrative Law Section, Centrelink from Mr D Lloyd. 7 July 1999

A2 Letter to Administrative Law Section, Centrelink from Mr D Lloyd. 15 July 1999

A3 Extract from Department of Social Security Publication, "You and Your Family" entitled "Family Payment". December 1996

R1 Respondent's Statement of Facts and Contentions. 21 July 1999

R2 Centrelink Commonwealth Government Payment Rates. 20 September - 31 December 1997

Issue

3. The issues to be determined in this matter are:

* Whether Mrs Lloyd, the applicant, owes a debt of $563.70 to the Commonwealth for overpayment of Family Payment and Family Allowance between 13 November 1997 and 8 October 1998.

* If a debt is owed to the Commonwealth, are there any grounds for the non-recovery of the debt?

Legislation

4. A determination of this matter requires consideration of the provisions of the Social Security Act 1991 ("the Act").

5. Qualification for Family Allowance is defined in section 838 of the Act and as relevant, states:

"Qualification for individual family allowance

838(1) A person is qualified for family allowance if:

(a) the person has at least one FA child; and

(b) the person is an inhabitant of Australia; and

(c) the person's income for the relevant family allowance period does not exceed the person's income ceiling; and

(d) the value of the person's assets does not exceed $376,750."

6. For the purposes of Family Allowance, it is defined in subsection 838(4) as follows:

"838 (4) For the purposes of this section, a person's income for a particular family allowance period is the sum of:

(a) the person's taxable income for that period; and

(b) the person's adjusted fringe benefits value for that period; and

(c) the person's target foreign income for that period; and

(d) the person's net rental property loss for that period."

7. Section 6(1) of the Act defines the Family Allowance period and as relevant states:

"family allowance period, in relation to a person who is receiving family allowance, means:

(a) in relation to the year in which the person first receives family allowance - the period that starts on the day on which the person starts to receive family allowance and ends on the next 31 December; or

(b) in relation to any other year - the period that starts on 1 January in that year and ends on 31 December in that year."

8. Section 1067G-F12 defines a parent's assessed taxable income as:

"1067G-F12 A parent's assessed taxable income for a tax year at a particular time is the most recent of:

(a) if, at that time, the Commissioner of Taxation has made an assessment or an amended assessment of that taxable income - that taxable income according to the assessment or amended assessment; or

(b) if, at that time, a tribunal has amended an assessment or an amended assessment made by the Commissioner - that taxable income according to the amendment made by the tribunal; or

(c) if, at that time, a court has amended an assessment or an amended assessment made by the Commissioner or an amended assessment made by a tribunal - that taxable income according to the amendment made by the court."

9. Sections 1069-H13 and 1069-H14 provide the means to ascertain the appropriate base tax year for working out the rate of Family Payment relevant in 1997 and accordingly, this was the financial year ending 30 June 1996:

"Appropriate tax year

1069-H13 Subject to the following provisions of this Submodule, the appropriate tax year for a family allowance payday is the base tax year for that payday.

Base tax year

1069-H14 The base tax year for a family allowance payday is the tax year that ended on 30 June in the calendar year that came immediately before the calendar year in which the payday occurs.

Example:

A family allowance payday occurs on 25 January 1995 - this day occurs in the calendar year 1 January 1995 to 31 December 1995 - the calendar year that came immediately before this one is the calendar year 1 January 1994 to 31 December 1994 - the base tax year is the tax year that ended on 30 June 1994 (ie the year of income that began on 1 July 1993)."

10. Section 1069-H16 provides that the appropriate tax year can be changed when an assumed notifiable event occurs and states:

"Change to appropriate tax year because of assumed notifiable event

1069-H16 If:

(a) an assumed notifiable event in relation to a person occurs after the end of the base tax year and before the beginning of the family allowance period; and

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

(i) 110% of the person's income for the base 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 from the beginning of the family allowance period, is the tax year in which the assumed notifiable event occurs."

11. Sections 1069-H17 and 1069-H18 are also relevant and provide:

"Change to appropriate tax year because of effect of assumed notifiable event on income for later tax year

1069-H17 If:

(a) an assumed notifiable event occurs in relation to a person after the end of the base tax year and before the beginning of the family allowance period; and

(b) point 1069-H16 does not make the year in which the event occurs (the event tax year) the appropriate tax year; and

(c) the person's income for the tax year that follows the event tax year is likely to exceed:

(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:

(d) the part of the family allowance period in which the event occurs that comes after the end of the event tax year; and

(e) the next family allowance period after the one referred to in paragraph (d);

is the year that follows the event tax year.

Change to appropriate tax year because of notifiable event

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 allowance period, is the tax year in which the notifiable event occurs."

12. Section 1069-H5 defines an assumed notifiable event as any event that an approved claim form states is an assumed notifiable event and, as relevant, states:

"Assumed notifiable events

1069-H5 An event is an assumed notifiable event for the purposes of the application of this Module in respect of a person if a family allowance claim form approved by the Secretary that was lodged by or on behalf of the person states that the event is an assumed notifiable event for the purposes of this Module."

13. It should be noted that section 1069-H6 confirms that a notifiable event is that as set out in subsection 872(1) of the Act. As relevant, section 1069-H6 states:

"Notifiable events

1069-H6 An event is a notifiable event for the purposes of the application of this Module in respect of a person if a notice given to the person under subsection 872(1) states that the event is a notifiable event for the purposes of this Module."

Section 872(1) states:

"872 Secretary may require notice of the happening of an event or a change in circumstances

872(1) The Secretary may give a recipient of family allowance a notice that requires the recipient to inform the Department if:

(a) a specified event or change of circumstances occurs; or

(b) the recipient becomes aware that a specified event or change of circumstances is likely to occur.

..."

14. Section 873 of the Act refers to recipient statement notices and as relevant provides:

"873 Secretary may require recipient to give particular information relevant to payment of family allowance

873(1) The Secretary may give a recipient of family allowance a notice that requires the recipient to give the Department a statement about a matter that might affect the payment of the family allowance to the recipient.

873 (2) Subject to subsection (2A), a notice under subsection (1):

(a) must be in writing; and

(b) may be given personally or by post; and

(c) must specify how the statement is to be given to the Department; and

(d) must specify the period within which the recipient is to give the statement to the Department; and

(e) must specify that the notice is a recipient statement notice given under this Act.

873 (2A) A notice under subsection (1) is not invalid merely because it fails to comply with paragraph (2)(c) or (e)."

15. Section 885 of the Act deals with the re-calculation of family allowance when regard is had to an estimate of income and that estimate is not within 110% of a person's actual income. As relevant, section 885 states:

"885 Recalculation if income exceeds 110% of estimated amount

885(1) If:

(a) in working out the rate of family allowance 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 allowance was based;

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

885 (2) For the purposes of this section, a person's income for a particular tax year is the sum of:

(a) the person's taxable income for that year; and

(b) the person's adjusted fringe benefits value for that year; and

(c) the person's target foreign income for that year; and

(d) the person's net rental property loss for that year.

..."

16. Section 1223 deals with debts owed to the Commonwealth and specifically subsections 1223(3) and 1223(4) provide:

"Recalculation of amount of family allowance

1223(3) Subject to subsection (4), if:

(a) an amount (the received amount) has been paid to a person by way of family allowance; and

(b) the person's rate of family allowance is recalculated under:

(i) section 884 (amendment of assessable income); or

(ii) section 885 (underestimate of income); or

(iii) section 886 (failure to notify notifiable event); and

(c) the received amount is more than the amount (the correct amount) of the family allowance payable to the person;

the difference between the received amount and the correct amount is a debt due to the Commonwealth.

Family allowance recoverable after end of tax year

1223(4) If:

(a) family allowance is paid to a person in a tax year; and

(b) apart from this subsection an amount of family allowance would become recoverable under subsection (3) before the end of the tax year; and

(c) the amount would be recoverable because of:

(i) an increase in the person's income; or

(ii) an underestimate of the person's income;

the amount is recoverable only after the end of the tax year."

17. Under the Act, there are a number of provisions which allow for the non-recovery of a part or whole of a debt in certain circumstances.

18. Section 1237 states:

"1237 Power to waive Commonwealth's right to recover debt

Secretary's limited power to waive

1237(1) On behalf of the Commonwealth, the Secretary may waive the Commonwealth's right to recover the whole or a part of a debt from a debtor only in the circumstances described in section 1237A, 1237AA, 1237AAA, 1237AAB, 1237AAC or 1237AAD.

..."

19. A debt may be waived if it arises solely from administrative error and, as relevant, section 1237A states:

"1237A Waiver of debt arising from error

Administrative error

1237A(1) Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.

1237A (1A) Subsection (1) only applies if:

(a) the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or

(b) if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;

whichever is the later.

..."

20. Section 1237AAD allows the Secretary to waive a debt in "special circumstances" and, as relevant, states:

"1237AAD Waiver in special circumstances

The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:

(a) the debt did not result wholly or partly from the debtor or another person knowingly:

(i) making a false statement or a false representation; or

(ii) failing or omitting to comply with a provision of 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."

Background

* Mrs Lloyd was born on 22 November 1951. She attained the New South Wales School Certificate, leaving school aged 16 years. Thereafter, Mrs Lloyd attended North Sydney TAFE College where she completed a one year secretarial course.

* Mrs Lloyd worked as a secretary for approximately 4 years before marrying Mr Donald Murray Lloyd on 30 September 1972 (T7).

* Mr and Mrs Lloyd have four children. At the time of the hearing, Justine was aged 25 years; Stephanie, aged 23 years; Stuart, aged 20 years and Penelope, aged 18 years. Penelope and Stuart still live at home. Penelope undertook her New South Wales Higher School Certificate in 1999 and Stuart was studying for his Bachelor of Economics Degree at Sydney University.

* In 1992, Mrs Lloyd returned to work as an assistant manager in the St Ives High School Canteen. Mrs Lloyd worked in this position for approximately 4 years.

* In about November 1996, Mrs Lloyd commenced work as a shop assistant in a newsagency.

* Mr and Mrs Lloyd lodged a Family Payment claim on 13 November 1997 (T7), noting that Mrs Lloyd had changed jobs on 11 November 1996 and Mr Lloyd had changed jobs on 15 July 1997 (T7, p40). These events were noted on the claim form as "assumed notifiable events" under section 1069-H5 of the Act.

* Mr and Mrs Lloyd provided estimates of their total taxable income in the Family Payment Claim Form for the 1997/98 year of $25,000 for Mrs Lloyd and $36,000 for Mr Lloyd, totalling a combined estimated taxable income of $61,000 (T7, p40). On the side of the form next to the handwritten estimates of income provided by Mr and Mrs Lloyd, was a printed, boxed notation:

"if your actual income is 10% more than your estimate you may have to repay your Family Payment and/or Childcare Assistance."

* Mrs Lloyd was paid Family Payment and Family Allowance over the period 13 November 1997 to 8 October 1998 commencing at the rate of $23.40 per fortnight from the pay day on 20 November 1997. This Family Payment/Family Allowance was calculated using the estimate of income provided by Mr and Mrs Lloyd of $61,000 (T11).

* On 14 November 1997, Mrs Lloyd was sent a Departmental letter advising of her Family Payment and also that she must advise the Department within 14 days if her and Mr Lloyd's combined income increased beyond $67,100 in the 1996/97 or 1997/98 financial years (T11).

* On 24 July 1998, Mrs Lloyd received a Departmental letter advising that her Family Allowance was $23.50 per fortnight. Mrs Lloyd was advised, amongst other things, that she must tell the Department within 14 days if her combined income increased beyond $67,100 in the 1997/98 or 1998/99 financial years (T12).

* In a "Review of Your Family Allowance Childcare Assistance" form, signed on 19 October 1998 by Mr and Mrs Lloyd, Mrs Lloyd advised her taxable income for 1997/98 was $22,929 and Mr Lloyd's income for 1997/98 was $44,818, a total of $67,747 (T13), which was greater than 110% of the estimated income of Mr and Mrs Lloyd.

* A Departmental review of Mrs Lloyd's Family Allowance was undertaken and on 21 October 1998, an overpayment of $563.70 was calculated, which was considered by the Departmental Delegate to be a debt owed to the Commonwealth (T14).

* On 6 November 1998, a Departmental delegate wrote to Mrs Lloyd affirming the decision to raise and recover a debt arising out of an overpayment of Family Allowance (T21).

* Mrs Lloyd sought review of the Departmental delegate's decision by an ARO who subsequently affirmed the delegate's decision, advising of this decision by way of letter of 23 November 1998 (T24).

* Mrs Lloyd sought a review of the ARO's decision by the SSAT on 8 December 1998 (T25) noting:

" 'Commonsense' Grounds for Appeal

If we had estimated our 1997/98 income to be slightly higher, say $62,000, then our Family Payment would have been unchanged but we would not have to make any repayment whatsoever.

It is unfortunate that people should be "penalised" or disadvantaged because they made a low estimate of their income if a higher estimate would have given the same Family Payment.

In other words when Family Payment debts are calculated, people should in effect be deemed to have made the highest estimate consistent with the level of Family Payment received.

This is the effect of the legislation when the estimated income is less than the 'income free area', which is the income at which the maximum Family Payment is payable. In this case no repayment is required as long as the actual income does not exceed 110% of the income free area. For example if the income free area is $23,400 then people who estimate their income to be $21,000 are treated the same as those who estimate their income as $23,400. Clearly the intent of the legislation is that they should not be penalised for making the lower estimate where this did not result in a higher rate of payment.

We are asking that the same principle be applied in our situation for the sake of consistency as well as "natural justice".

...

I suggest that the Commonwealth made an administrative error in not explaining how Family Payment debt is calculated when there is estimated income. It was not an error by a specific clerk, but more an error in the procedures that they were given to follow.

Our income fluctuates greatly and it is hard to estimate in advance with any accuracy. At 13/11/97 the basic Family Payment for one child was payable for estimated incomes under about $65,000. Our income for 1997/98 was just as likely to be $65,000 as $61,000. If I had known then how Family Payment debt is calculated I certainly would have made a higher estimate and no debt would be payable now, so the debt is solely attributable to the lack of advice from the Commonwealth.

To support the view that the Commonwealth was in error in 1997, I would point out that they have since started to provide just this sort of information to clients receiving Family Payment with estimated income. On 19/10/98 we advised Centrelink of our estimated income for 1998/99 and were sent a photocopy of a new brochure called "Estimating your income for Family Allowance" which explained exactly how Family Payment debt is calculated. By then it was too late to help us.

...

Section 1237AAD allows a debt to be waived if there are special circumstances. 'Special' means 'unusual, uncommon or exceptional'. The following circumstances together make our case unusual etc

* Our Family Payment for [sic] was based on estimated income.

* Our estimated income was less than the maximum possible, but was within the range for the minimum Family Payment.

* Our actual income was more than 110% of our estimate.

* Our actual income was between 100% and 110% of the maximum possible estimate to qualify for Family Payment.

* The date we applied for Family Payment was before the new brochure explaining the calculation of Family Payment debt with estimated income.

* Our income fluctuates greatly from time to time and it is hard to estimate accurately in advance: 1995/96 $33,457; 1996/97 $50,138; 1997/98 $67,747; 1998/99 (estimated) $22,500.

Arguably the legislators did not foresee this combination of circumstances or chose not to complicate the legislation by trying to treat all unusual cases properly. Section 1237AAD was created to enable special cases to be treated on a reasonable basis. I submit that in our case it would be reasonable to adopt a method consistent with the treatment of income estimates less than the income free area. This means in effect deeming that we estimated our income to be the largest that would qualify for the minimum Family Payment, as illustrated in the example above." (T25, pp96,97)

* Following the SSAT's decision on 8 April 1999, affirming the ARO's decision, Mrs Lloyd made an application for review by the Tribunal on 21 April 1999. In a letter of 20 April 1999, accompanying the application for review, Mrs Lloyd wrote that she was seeking a waiver of the debt on the grounds of administrative error and also waiver on the grounds of special circumstances. Mrs Lloyd also pointed out that there was an error in the SSAT's decision that was critical to the SSAT's argument. In this regard, Mrs Lloyd wrote that the SSAT's error was in the last sentence of paragraph 29 when it wrongly stated that Mrs Lloyd's combined 1996/97 income of $50,138 was under the income free area of $24,000. Mrs Lloyd argued that this error, if corrected, would mean that for payments of Family Payment before 1 January 1998, the 1996/97 year would be the appropriate tax year under section 1069-H16 and then section 1069H17 would not apply. This would then result in an administrative error by Centrelink, particularly in relation to the part of the debt arising for payments made before 1 January 1998. Further, Mrs Lloyd submitted in her application for review to the Tribunal that such an error would "void" the Departmental letter of 14 November 1997 under section 873 of the Act in which Mrs Lloyd was notified of the $67,100 income limit for 1997/1998 (T1).

* Mrs Lloyd's ground for appeal to the Tribunal on administrative error by the Department was that it did not give sufficient information to Mr and Mrs Lloyd when they made their application for Family Payment/ Family Allowance based on an estimated income. Mrs Lloyd noted that she was not told how any possible future Family Payment/ Family Allowance debt would be calculated. She noted that where a Family Payment/ Family Allowance recipient has a range of possible incomes which all qualified for the basic Family Payment/ Family Allowance, then it was in the best interests of the recipient to use the highest estimate in the range and Mrs Lloyd should have been informed of this by the Department. Mrs Lloyd suggested that the sole cause of the Family Payment/Family Allowance debt was the lower than necessary estimate submitted by her husband and herself and the sole cause of Mr and Mrs Lloyd providing that particular estimate was the lack of Departmental advice. Without this advice there was a debt and had there been more advice, no debt would have arisen.

* The special circumstances relating to her case which Mrs Lloyd noted in her application for review involved the combination of a number of factors. In this regard, Mrs Lloyd wished the Tribunal to consider that the combination of providing estimated income which was later compared to actual income, created a situation where the debt would have been eliminated by a higher estimation. Further, another aspect which was unusual and in the legislative sense, "special" was the extreme difficulty Mr and Mrs Lloyd had in estimating the family's income accurately. Each of those factors was unusual but the combination was most unique and unusual and therefore should trigger the exercise of the discretion to waiver the debt in the special circumstances of the case (T1).

* An amount of $563.70 has been repaid to the Department by Mr and Mrs Lloyd.

Evidence of Mrs Lloyd

21. Mrs Lloyd explained to the Tribunal that Mr Lloyd handled all of the Family Payment/Family Allowance matters. In this regard, Mr Lloyd calculated all the estimates of income and in such circumstances, Mrs Lloyd told the Tribunal that it was only fair and proper, and her wish, that he should provide the principal evidence on these matters.

22. The process adopted by Mr and Mrs Lloyd in relation to Family Payment/Family Allowance was that Mrs Lloyd would "briefly" read the Departmental forms and letters and Mr Lloyd would then read, discuss and if necessary explain the letters and their requirements to her and complete whatever details were necessary. Mrs Lloyd stated that she had no input into the calculation of the estimates. Once claim forms were completed by Mr Lloyd, Mrs Lloyd would read over them but she did not check the figures. Letters which came from the Department addressed specifically to Mrs Lloyd, she would be the first to read completely, including the information contained on the reverse of the letters.

23. During the period under review, Mrs Lloyd had commenced work as a shop assistant in a newsagency in about November 1996. In about March 1997, when her employer became seriously ill with bowel cancer, Mrs Lloyd worked extended hours, working 36 hours per week. Mrs Lloyd stated that these extra hours resulted in an increased income, but also in increased stress on the family because of her absence. It was such an unexpected change, Mrs Lloyd noted, which lasted from March 1997 until at least October 1998 or later. Mrs Lloyd told the Tribunal that she was thrown in at the "deep end" and, at the time, felt that she was more at work than at home.

24. Mrs Lloyd noted that the family was further under stress because Mr Lloyd was also working very hard and that consideration of their financial matters may not have received his or her full attention.

Evidence of Mr Lloyd

25. Mr Lloyd told the Tribunal that his date of birth is 8 November 1943. Mr Lloyd attained the New South Wales Leaving Certificate in 1960, aged 17 years and then attended the University of Sydney, completing a four year Bachelor of Science Degree with Honours. Mr Lloyd then undertook a postgraduate correspondence course in Actuarial Studies from the London based Institute of Actuaries. Mr Lloyd was working full time at that time with the MLC insurance company. The actuarial course was completed in 1972. Mr Lloyd's full-time work at MLC was in the computing field, which continued from 1964 until 1988 despite him being qualified as an actuary. It was later in life, in 1988, that Mr Lloyd commenced actuarial work in the superannuation industry, but while still employed by MLC. He continued to work as an actuary until 1994. In 1994, Mr Lloyd was retrenched from MLC following a partial sale of the company's business. Since being retrenched, Mr Lloyd had not worked regularly, he told the Tribunal. An actuarial agency occasionally finds work placements for him or he is able to obtain contract work himself by word of mouth. Mr Lloyd told the Tribunal that he also has a small self-employed actuarial business involving the signing of certificates for allocated pension funds.

26. Mr Lloyd stated that his income for 1998/99 was between $8,000 and $9,000 because his temporary work had "dried up". Mr and Mrs Lloyd's combined income was approximately $27,000 . Mr Lloyd stated that the family owns their home outright and they have no debts.

27. Mr Lloyd was questioned about the claim form for Family Payment lodged on 13 November 1997 and signed by both Mrs Lloyd and himself (T7). On page 36 of the T documents and at Point 44 of the claim form, Mr and Mrs Lloyd had signed the claim form "Statements" acknowledging:

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

28. Mr Lloyd told the Tribunal that he did not specifically recall signing this document but he and his wife should have read the statement and "we should take responsibility for having read that" (Transcript p18). Mr Lloyd stated that he understood the meaning of statement.

29. Mr Lloyd told the Tribunal that he found it difficult filling out the claim form linking the specific facts of his and Mrs Lloyd's situation to the questions detailed and required by the form. Mr Lloyd noted that he did not contact the Department for clarification or assistance in relation to any of these difficulties he experienced in relating and fitting his particular circumstances to the requirements of the form. Mr Lloyd also stated that at the time, he thought the process of claiming Family Payment/ Family Allowance was simple and he understood it.

30. The claim form had a section related to "notifiable events". Mr and Mrs Lloyd noted two notifiable events on the form. In this regard, it was detailed that in November 1996, Mrs Lloyd had changed employment and that Mr Lloyd had changed employment on 15 July 1997. These changes reflected Mr Lloyd taking up a temporary work assignment and Mrs Lloyd commencing work at a newsagency. These two circumstances resulted in an improvement in the family's overall financial situation, Mr Lloyd explained. Mr Lloyd told the Tribunal that there was another change in his circumstances on the 5 November 1997, when he commenced a second work assignment. Mr Lloyd agreed that this change was not notified to the Department, despite this event occurring before the lodging of the claim form for Family Payment. The new work assignment on 5 November 1997, represented a further improvement in the family's financial situation. It was Mr Lloyd's expectation at that time, that the contract commenced on 5 November 1997 would continue for a period of 5 or 6 weeks. In fact, he continued with this work for nearly three months. Mr Lloyd could not explain to the Tribunal why he chose to inform the Department on the claim form of a change in circumstances on 15 July 1997, but not of the change of 5 November 1997. He reiterated his previous explanation that the claim form format did not really fit his work circumstances and he completed it in the best way he could. Mr Lloyd noted that the filling in of the form was a "bit arbitrary". Despite not recording the event of 5 November 1997, Mr Lloyd stated that he had included the income from this work in the estimate income provided to the Department.

31. The further problem noted by Mr Lloyd in completing the claim form was the difficulty he had in estimating his income. Mr Lloyd stated that his income was irregular and that consideration of previous years' incomes provided no guidance, as the figures were always variable, depending on the number of work assignments he undertook, the period of employment and the rates of pay. Mr Lloyd told the Tribunal that his professional knowledge, expertise and experience as an actuary provided no assistance to him in estimating his combined income because he could not predict any future changes of circumstances which might impact upon the estimate. Mr Lloyd stated that the process of estimating income was not only difficult but the process/concept of picking a figure that was the most probable estimate was flawed. Mr Lloyd explained that none of the estimated figures would be more probable than another, posing the question to the Tribunal in relation to his circumstances of having irregular income, "Would Mr and Mrs Lloyd have been entitled to choose an estimate which was in their best interests?". Mr Lloyd did acknowledge to the Tribunal that he had made an estimate of income based on his knowledge at the time of undertaking a 5 or 6 week assignment in November 1997. He did not tell the Department that this assignment had occurred, nor that it went longer than he had expected and Mr Lloyd queried whether, in fact, he was obliged to notify the Department of such circumstances.

32. Mr Lloyd conceded that in February 1998, when the November 1997 work assignment had concluded, he might have been aware that his income was higher than he had estimated, if he had done a projection at that time. Mr Lloyd stated that if he had done a projection, he should have been aware that the income would be about $67,000, but whether it was actually going to exceed $67,100 would depend, Mr Lloyd noted, upon precisely what happened. If the combined actual income did exceed $67,100, it would only be by about $600 or $700 (Transcript p31). Mr Lloyd noted that he certainly was aware when he completed his and Mrs Lloyd's tax returns of the increase in actual income beyond estimated income. Mr Lloyd noted:

"I would have been aware, I would have been aware well before June [1998] that that was going to be a close thing, but I didn't know that we actually exceeded it until I did the final sums." (Transcript p31)

33. Mr Lloyd noted that if ultimately his and Mrs Lloyd's combined income exceeded $67,100, then they would have to repay money to the Department and if it did not, they would not. Mr Lloyd stated, however, that he did not appreciate the concept that the Department added 10% onto the estimated income. He thought that if his combined actual income exceeded the income limit of $65,743, which was the "ceiling", he would get nothing and if his income exceeded 110% of the estimate, then the matter would be reviewed, but of course, it would reach $65,743 first, he told the Tribunal.

34. Mr Lloyd agreed that he had read the Departmental letters sent to Mrs Lloyd after Family Payment/Family Allowance was granted. Referring to the letter to Mrs Lloyd of 14 November 1997 (T11), which indicated Mrs Lloyd was being paid Family Payment on an estimate, Ms Fahey referred to the fact that the letter also required Mrs Lloyd to inform the Department within 14 days if the combined income exceeded $67,100 in 1996/97 or 1997/98. Mr Lloyd agreed that he understood the contents of the letter but noted:

"... The Department has or had a fairly authoritarian way of doing things where they simply require you to give them certain information and they will act on it in whatever way they think is appropriate. So they didn't tell me what they do if it happened but they just required me to tell them if the circumstance arose." (Transcript p19)

35. Mr Lloyd stated that neither Mrs Lloyd nor himself notified the Department of their combined income being in excess of $67,100 until October 1998, because they only exceeded the amount by $647 and it was not clear until Mr and Mrs Lloyd's tax returns were calculated, including the results of deductions and income, that they were aware that the limit had been exceeded. Further, Mr Lloyd noted that nothing in the Departmental correspondence alerted him to the fact that $67,100 was 110% of the family's combined estimated income. Mr Lloyd explained that he completed the tax returns in September 1998 and:

"... At that stage I did or should have realised that I had exceeded it but, it was in October which was the next month that I notified the Department." (Transcript p20)

36. Mr Lloyd reiterated the difficulty in precisely knowing when his actual income exceeded his estimated income, stating:

"Well, it was obviously going to be higher than I estimated but whether it was going to be higher than the 110 per cent, in fact it finished up at 111 per cent of what I estimated. Now, whether it was going to be - our income for the whole year was going to be in excess of 110 per cent wasn't clear until I did the sums at the end.

...

Well I knew that it was above $67,100 in total, sorry, I knew it was above $61,000 - I knew it was $61,000. I didn't know whether our total income for the year, taking into account Cheryl's earnings for the rest of the year hadn't been completed yet and our interest income, less our deductions that I hadn't worked out yet, I didn't know whether that was all going to come out above $67,100 or not. But it was quite a strong thing in the end. And of course if I had said my estimate, my estimated income is now $67,000 or thereabouts, Family Payment would have ceased immediately. Is that what I'm expected to do ...

... I didn't really understand greatly, as I explained in one of the letters, at that stage the Department seemed to be taking the attitude that they'd tell me what information they wanted and they'd like you to give the information and they decide what to do about it. So I didn't really know the implications of these things. I did learn later on a lot about how this works, but I didn't know very much at the time." (Transcript p26-27)

37. Referring to his letter of 15 July 1999 (Exhibit A2), Mr Lloyd explained that reading the claim form and the Department of Social Security's 1996 publication "You and Your Family", he believed that Mrs Lloyd was eligible for Family Payment only if income was less than $65,743. When Mr Lloyd came to page 16 of the claim form, he realised that if a family's income is 10% more than the estimated income, then he may have had to repay Family Payment/ Family Allowance to the Department. Mr Lloyd wrote:

"If both these were true it would follow that if our income was over $65,743 then we would not be entitled to keep the benefit regardless of whether our income exceeded our estimate by 10%. In our case, and for everybody in the minimum family payment range, it would follow that only the first condition would be relevant. The second condition would be important for families receiving more than the minimum family payment.

...

I hope this rather long explanation shows how, despite careful analysis of all the information given to me by the DSS, I did not understand our entitlements when I made the income estimate or while we were receiving the benefit. The reason for my lack of understanding was not just that the information from the DSS was given in a form that was too hard to assimilate, but further that overall their advice was positively misleading." (Exhibit A2)

38. Mr Lloyd stated that faced with a range of possible incomes, with no possible means of estimating the most likely income, for no particular reason he stated that he chose an income estimate at "the lower end" when, in fact, it had been in his interest, he realised later, to choose an estimate closer to $65,743. By the time Mr Lloyd had completed the 32 page claim form, he stated that he had forgotten about the "10% rule" and was "entitled to do so", given the paucity of information provided by the Department in the face of a complicated and complex form.

39. When Mrs Lloyd received the Departmental letter of 14 November 1997, which detailed the requirement to inform the Department within 14 days of any excess in income beyond $67,100, Mr Lloyd stated that he did not realise that this figure was 110% of his estimated income. He noticed that this amount was above the $65,743 but thought that the $67,100 figure was due to the Department taking into account indexation.

40. Mr Lloyd stated that it was only after Mrs Lloyd received a Departmental letter of 22 October 1998 (T15, T16), that he realised that he would have been entitled to receive a benefit if he had made an estimate of income up to $65,743, instead of the estimated income of $61,000 he had provided. In this Departmental letter regarding the 1998/99 income limit, the content and format of that letter was very different to previous Departmental correspondence in that it did explain that the limit was 10% more than the estimate. Mr Lloyd submitted that this letter had attached a brochure "Estimating Your Income for Family Allowance" including examples. Information supplied by the Department between July 1998 and October 1998 had greatly improved, Mr Lloyd stated and he then concluded that the more recent information was now adequate. Unfortunately, the change in information had been too late to assist Mrs Lloyd and himself in properly estimating their income.

41. In relation to special circumstances, Mr Lloyd stated that there were no financial or health matters which could be considered as a special circumstance in Mrs Lloyd's and his case. Mrs Lloyd suffers from a chronic back condition, requiring treatment through physiotherapy and chiropractic intervention but Mr and Mrs Lloyd are able to cope with this. Mr Lloyd suffers from asthma but, again, he did not consider that this condition was prohibitive in either a financial or any other sense. There were no debts owed by Mr or Mrs Lloyd.

42. In answer to a question from Ms Fahey as to whether or not Mr Lloyd considered not claiming for Family Payment/ Family Allowance, given the warning on the claim form about having to repay any monies if the actual income was higher than 110% of the estimated income, Mr Lloyd replied that he did not consider that. Specifically, Mr Lloyd stated:

"I didn't fully appreciate the 110 per cent element but where you are in a position where your income might be over the ceiling or might be below the ceiling, if you don't claim and it turns out that your income is below the ceiling, then you miss out completely. There is no way of going back afterwards and saying, well, I should have been eligible for this benefit. On the other hand if you claim and it turns out you are not entitled to it, then you give it back. So where you are in the situation where there's a range of possible incomes and some of them will entitle you to the benefit and some of them wouldn't. It seemed to me that the appropriate thing to do was claim on the basis of one of the lower possibilities so as not to miss out on the benefit all together if ultimately I was entitled...

I provided an estimate underneath the ceiling on the basis that if I didn't get any more work then I'd be entitled to it and if I did get further work then I'd probably have to pay it back...

Yes, I understood that I may have to pay it back but I didn't understand precisely the circumstances when I have to pay it back." (Transcript pp37,38)

Submissions

43. Mr Lloyd submitted that there were three areas for submission namely, that the debt should be waived on the basis of sole Departmental administrative error. Secondly, because of the special circumstances in the case and finally also because of the error made by the SSAT at paragraph 29 in its decision.

44. In relation to the error of the SSAT, Mr Lloyd referred to an error of fact when the SSAT wrote that Mr and Mrs Lloyd's 1996/97 income of $50,138 was under the income free area of $24,000. The SSAT then found in its decision based on section 1069-H17 that Mrs Lloyd's income in the year following the year in which the assumed notifiable event occurred (1997/98) needs to be compared with the income in the base year of 1995/96. The SSAT found that:

"Section 1069-H16 provides that to change the tax year, Mrs Lloyd's income for the year in which the assumed notifiable event occurs (in this case 1996/97) must exceed 110% of the person's income for the base year (1995/96) and the income free area. With an assumed notifiable event on 11 November 1996, the Tribunal needs to compare Mrs Lloyd's income in 1996/97 with 1995/96. This comparison shows that although Mrs Lloyd's income in 1996/97 exceeds the income in 1995/96 by 110%, it is under the income free area." (T2, paragraph 29, p10)

45. Mr Lloyd submitted that the income as referred to by the SSAT was not under the income free area at all and accordingly, since the SSAT had stated how complicated the legislation was in relation to Family Payment/ Family Allowance, then given that it had itself make an error, there could be no confidence that the SSAT had made the correct overall decision.

46. Referring to his letter of 7 July 1999 (Exhibit A1), Mr Lloyd noted that he specifically wanted the Tribunal to look at the definition of an "assumed notifiable event", as referred to in section 1069-H5 of the Act. Mr Lloyd contended that the wording in the claim form in relation to assumed notifiable events made no specific reference to the definition contained in the Act and that the wording may be slightly different in the Act as compared to the claim form (T7). Accordingly, although perhaps a technicality, Mr Lloyd questioned whether the events of November 1996 and July 1997 as noted by Mrs Lloyd and himself in the Family Payment claim form, may not have been assumed notifiable events under the Act. If this were the case, then the result could be there would be no debt owed by Mr and Mrs Lloyd to the Department.

47. Mr Lloyd also referred to subsection 6(1) of the Act as it related to the Family Allowance period and how the circumstances of people could be defined who had periods of Family Payment/ Family Allowance where the Family Payment/ Family Allowance was discontinued, as had occurred in Mr and Mrs Lloyd's case. Logically speaking, Mr Lloyd submitted, the Family Allowance period in respect of the November and December 1997 payments would not commence in November 1997 but 1 January 1997. Applying section 1069-H16 of the Act, then the July 1997 notifiable event had not occurred before the beginning of the Family Allowance period (ie 1 January 1997) and, therefore, the notifiable event in July 1997 would be excluded from consideration. In those circumstances, Mr Lloyd submitted that the appropriate tax year for the portion of the Family Payment/ Family Allowance received in 1997 would be the 1996/97 tax year and there would be no debt in relation to these payments. Thus, for payments before 1 January 1998, Mr Lloyd submitted then that the 1996/97 tax year would be the appropriate year under section 1069-H16 of the Act and section 1069-H17 would not be activated. Further, Mr Lloyd submitted that the Department's letter of 14 November 1997 (T11), under section 873 of the Act, advising of an income limit of $67,100 for the 1997/98 year, would be voided (Transcript p43).

48. Mr Lloyd further submitted that the Department's failure to advise Mrs Lloyd and himself of the implication of "various estimated incomes" is a serious administrative error. Mr Lloyd noted that he was annoyed with himself that he had not understood the "10% rule" and its consequences and was annoyed that the Department had not told him "what was going on". Mr Lloyd further noted that he had read the document, "Family Payment 1997" (Exhibit A3), and that an income of $65,743 would cause Family Payment/ Family Allowance to stop. In the claim form (T7, p40), Mr Lloyd had also noted that a re-calculation would occur if Mrs Lloyd's and his actual income exceeded 110% of the estimate provided. Mr Lloyd's contention is that estimated income did not matter because before the estimated income limit was reached, the actual ceiling income of $65,743 would be exceeded. Mr Lloyd submitted that he therefore did not pay much attention to the 10% rule and maintained that the Department had misled him into thinking this way. Not only did the Department fail to give Mr and Mrs Lloyd sufficient information, it actually gave them misleading information, Mr Lloyd submitted, and this constituted Departmental administrative error. The debt arose solely because of this administrative error by the Department. The fact that information contained in Departmental publications about these matters changed later in 1998, attested to the administrative error.

49. Referring to Re Gerhardt and Secretary, Department of Employment, Education and Training (AAT 10941, 17 May 1996), Mr Lloyd noted that Deputy President Forgie had determined that "solely" should be given its ordinary meaning of "only". Further, Mr Lloyd noted Deputy President Forgie's reasoning that if other errors or factors follow as a result of an error on the part of the Commonwealth, then it is the sole error of the Commonwealth that is at issue; other errors which were "incidental" and arising out of the Commonwealth error did not detract from there being sole administrative error by the Commonwealth. In Mr and Mrs Lloyd's case, Mr Lloyd submitted that if you accept that the Department made an administrative error, then his error of estimates was conditional on the original error made by the Department not to provide Mrs Lloyd and himself with proper and full information. In such circumstances, Mr Lloyd argued that the choice of his estimated income level reported in the claim form was an error made by himself as a consequence of the sole administrative error of the Department.

50. In relation to satisfying the other limb of the legislative provisions relating to sole Departmental administrative error, in that the payment must be received in good faith, Mr Lloyd contended that the actual combined income only exceeded the 110% estimate by the slightest margin. This established, in Mr Lloyd's mind, that Mrs Lloyd and himself had only realised "very late in the piece" that they were going to exceed the limit. This was primary evidence, Mr Lloyd submitted, of receiving the Family Payment/Allowance in good faith.

51. Mr Lloyd submitted that there was a combination of factors in this matter which, together, amounted to special circumstances. Mr Lloyd referred the Tribunal to Re Beadle and Director General of Social Security (1984) 6 ALD 1 at 3, in which Toohey J considered special circumstances to exist in situations which were "unusual, uncommon or exceptional". Mr Lloyd submitted that he would like to interpret those expressions as meaning "infrequently occurring". Mr Lloyd contended that he was in a situation where, if he had made a higher estimate, he may not have received a higher rate of Departmental benefit, but he would have had a lower probability of having to repay the overpaid Family Payment/ Family Allowance. Mr Lloyd submitted that the Department probably did not have any figures on what proportion of recipients of Family Payment/ Family Allowance would find themselves in his situation, but he contended that it would be only a small fraction of those who applied for Family Payment/ Family Allowance. In itself this was not an unusual situation, but Mr Lloyd submitted that it was its infrequency in occurring and the combination of circumstances which justified a finding of special circumstances.

52. Additionally, the difficulty of estimating his combined income was also a special circumstance. Being self-employed, with a variable income and having no precedent and trying to fit these factors to the prescriptions of the claim form, a process he likened to fitting a square peg in a round hole, Mr Lloyd submitted amounted to a special circumstance.

53. Mr Lloyd further contended that in relation to section 1237AAD of the Act, the legislators were aware that this legislation would produce the results they intended in the vast majority of cases, but recognised that there may be infrequently occurring cases where the legislation produced an undesirable result. Mr and Mrs Lloyd's circumstances was one of those infrequently occurring cases when the legislation produced an undesirable result and in which, on Mr Lloyd's submission, section 1237AAD should be activated to waive the debt.

54. Mr Lloyd saw the remedy in his case by relying on the "special circumstances" legislative discretion and not in making any representations to Members of Parliament to change the Law. Mr Lloyd submitted that legislative amendment would not provide him with the immediate results he required because he believed that there would not be very many votes in trying to amend the relevant legislation.

55. Mr Lloyd further submitted that there was another issue which he believed should result in there being a concession made to those at the higher end of the income scale who were applying for Family Payment/ Family Allowance. On this point, Mr Lloyd urged the Tribunal to consider the issue of people at the lower end of the economic spectrum being provided with a concession or treatment which allows them to obtain the maximum Family Payment. Mr Lloyd used the example of someone having an income free area of $24,000 and being able to estimate an income of $16,000. Such recipients of Family Payment/ Family Allowance would not have to repay any payment/ allowance unless the actual income exceeded 110% of $24,000 and not 110% of $16,000. Mr Lloyd submitted that this analogy had some merit in relation to himself and Mrs Lloyd who were at the higher end of the economic spectrum, in that they should be allowed the possibility of being deemed to have estimated their income at the highest level possible without losing the minimum Family Payment/ Family Allowance.

56. Mr Lloyd concluded that he did not revise his estimated income once he knew of the possible higher actual income, because if he had done so, then the Department would probably have decided that the Family Allowance should cease, even though his actual income may not, for the entire year, have exceeded $67,100.

57. Ms Fahey for the Department submitted that in relation to Mr Lloyd's concerns about errors in paragraph 29 of the SSAT's decision, that the SSAT had indeed made an error and should have applied section 1069-H17 and not 1069-H16.

58. Referring to Mr Lloyd's question about the definition of an assumed notifiable event, Ms Fahey submitted that an assumed notifiable event is an event for the purposes of the application of the Act, as set out in a Family Payment/ Family Allowance claim form approved by the Secretary, and which has been lodged by or on behalf of the person. Sections 1069-H5, 1069-H6 and 872 are relevant to the issue of notifiable events.

59. Referring to the actual claim form for Family Payment (T7, p40), the claim refers to events listed as assumed notifiable events under section 1069-H5 of the Act. The definitions contained in the Act and on the claim form in relation to assumed notifiable events are consistent, Ms Fahey submitted. The claim form sets out what constitutes assumed notifiable events and accordingly, Ms Fahey submitted that there was no error or difference in language between the Act and the claim form which would allow for the events of July 1997 and November 1996 not to be considered as notifiable events.

60. In relation to Mr Lloyd's submission about the Family Allowance period and the impact of discontinued payments, Ms Fahey submitted that under the Act, in relation to the year that a family first received Family Allowance, the Family Allowance period starts on the day in which a person commences to receive the Family Allowance and ends on the next 31 December or, in relation to any other year, the period starts on 1 January of that year and ends on 31 December of that year. Ms Fahey further submitted that the Family Allowance period stops when qualification ceases. Accordingly, if Family Allowance/Family Payment ceased in July 1997 but then recommenced in November 1997 then the new Family Allowance period commenced from the date of acceptance of the new claim, in Mrs Lloyd's case, from 20 November 1997 to 31 December 1997 and then a new Family Allowance period commenced from 1 January 1998.

61. Mr and Mrs Lloyd did not notify the Department about the notifiable event of 11 November 1996 until 13 November 1997. Under the provisions of the legislation, that notifiable event changed the appropriate tax year to the 1997/98 tax year. This is why the income estimate provided by Mr and Mrs Lloyd for the 1997/98 tax year was used for the period 20 November 1997 to 31 December 1997 and that is given force under section 1069-H18 of the Act for that part of the debt, Ms Fahey submitted. The second part of the debt, that is, from 1 January 1998 to 8 October 1998, is dealt with under section 1069-H16 of the Act because there are two notifiable events namely, on 15 July 1997 and 5 November 1997. Section 1069-H16 of the Act changes the base year to the event year. Because of the notified events, the base year changes the event year which in this case, was the tax year of 1997/98. Under normal circumstances, Ms Fahey submitted, what would have happened would be that the 1998 calendar year would have been the base year but because of the notifiable events, the base year changed to the event year, that is 1997/98 for which an estimated income had been provided by Mr and Mrs Lloyd. As Mr and Mrs Lloyd's estimated income was $61,000, but their actual combined income was $67,747, which is greater than 110% of the estimated income, then Family Payment was re-calculated with a nil entitlement. Because Mrs Lloyd was paid Family Payment/Family Allowance over and above that to which she was entitled, a debt was due to the Commonwealth arising out of the application of subsection 1223(3) of the Act.

62. Ms Fahey submitted that there is no sole Departmental administrative error because on the claim form there was information provided about the penalties of making an inaccurate estimate. On Mr Lloyd's own evidence, he had read the Department's information booklet and the claim form. If there were any problems or difficulties, as he mentioned he had, then Mr Lloyd should have contacted the Department, Ms Fahey submitted. Ms Fahey contended that it was not up to the Department to calculate and advise Mr Lloyd as to which estimate he should use. It was up to Mr Lloyd, as the person in the family responsible for such matters, to provide an accurate estimate. Ms Fahey conceded that if a person provided a higher estimate, he/she would have less possibility of incurring a debt, but that this fact could not be relied upon to encourage claimants to falsely provide income estimates.

63. Ms Fahey submitted that there is a risk inherent in providing income estimates, but that this is why the legislation allows for a margin of error of 10% above or below the estimate. In Mr Lloyd's case, the debt arose because an inaccurate estimate of income was provided in that Mr Lloyd underestimated his income. Ms Fahey submitted that the person who provides the estimate has the best idea of what the income is likely to be. It is the claimant's/recipient's responsibility to accurately estimate his/her income and to advise the Department of any change to this estimate.

64. In relation to there being special circumstances in Mr and Mrs Lloyd's case, Ms Fahey submitted that people who are self-employed or work irregular times apply for Family Payment/ Family Allowance all the time. There is nothing inherently special in that, Ms Fahey submitted. Further, there is a 10% margin for error allowed in the legislation so that the difficulties of estimating an income are taken into account. It was always open to Mr Lloyd to inform the Department of his underestimation of his income, to revise his income estimate, to seek clarification or indeed to cease payment of the allowance at any time. Ms Fahey submitted that Mr Lloyd made a number of assumptions about his income and the treatment of estimated and actual income and that these resulted in a debt.

65. Ms Fahey further submitted that there were no health, financial or other problems experienced by the Lloyd family which could be considered to be "special" in the legislative sense.

66. While acknowledging it was difficult for Mr and Mrs Lloyd to estimate their combined income because of the circumstances of Mr Lloyd's "volatile employment status", this was certainly acknowledged by the legislation. There were no other special circumstances as construed in Secretary, Department of Social Security v Hales (1998) 82 FCR 154, in Groth and Secretary, Department of Social Security (1995) 37 ALD 797 or Re Colaiacolo and Secretary, Department of Social Security (AAT 2109, 24 April 1985).

67. Accordingly, Ms Fahey submitted on the behalf of the respondent that the decision of the SSAT is correct and should be affirmed, concluding that the legislative provisions for the re-calculation of Family Allowance/ Family Payment, the calculation of an overpayment and debt to allow for the recovery/non-recovery of the debt had all been properly applied. Ms Fahey submitted that it is quite clear in this matter that providing an inaccurate estimate cannot be seen to be a special circumstance or an anomalous situation. Ms Fahey further contended that the law provides that if there has been error solely on the part of the Department, then the debt could be waived, but this was certainly not appropriate in the case before the Tribunal.

68. Ms Fahey concluded that the correct provisions relating to the rate calculators had been applied to Mr and Mrs Lloyd's circumstances; the correct financial years had been applied to the re-calculation of the Family Allowance in relation to notifiable events and assumed notifiable events. There was no administrative error and no special circumstances present in this case.

Findings

69. The Tribunal has come to a decision in this matter, taking into account the oral and documentary evidence, and by applying the legislation and the case law.

70. Mr and Mrs Lloyd provided frank oral evidence and were cooperative. Mrs Lloyd, the applicant, provided only brief evidence, choosing to rely on the evidence of her husband and his submissions, given that Mr Lloyd had the primary responsibility for management of Family Payment/ Family Allowance matters.

71. The payment of Family Payment and Family Allowance is governed by various provisions of the Act which are, in combination, complex. Various sections of the Act are applied according to the particular circumstances of the applicant. Changes in the applicant's circumstances may then trigger changes to the relevant years considered for the purposes of determining income, estimates and in relation to re-calculation of the qualification for Family Allowance/ Family Payment and the rates of payment of these allowances.

72. The Act also specifically deals with changes in circumstances called assumed notifiable events, which impact on qualification and calculation of rates of Family Payment/Allowance.

73. Mrs Lloyd reclaimed Family Payment on 13 November 1997, having previously ceased payment in July 1997. There is no dispute that Family Payment/ Family Allowance was received between 13 November 1997 and 8 October 1998.

74. On the claim form completed on 13 November 1997, Mr and Mrs Lloyd noted two things had changed. Mrs Lloyd had changed jobs on 11 November 1996 and Mr Lloyd had changed his position on 15 July 1997. Both these events, as noted at point 52 of the claim form (T7, p40), are assumed notifiable events under section 1069-H5 of the Act. The Tribunal finds that it is clear that these occurrences are notifiable events. The Tribunal also finds that another notifiable event occurred on 5 November 1997, when Mr Lloyd again changed his employment contract commanding another work assignment or contract. This event was not notified to the Department and should have been on the claim form. Further, Departmental letters sent on 14 November 1997 and 24 July 1998 were valid notices under sections 872 and 873 of the Act, requiring Mrs Lloyd to inform the Department of changed circumstances such as a change of jobs or an increase in income above the advised estimated income levels.

75. Applying subsection 6(1) of the Act, which defines the Family Allowance period, the Tribunal finds that because the claim was made on 13 November 1997, the Family Allowance period should be broken up into the periods from 20 November 1997, the date from which the first date of payment of the claim, until 31 December 1997 and from 1 January 1998 until 8 October 1998, when Family Allowance ceased.

76. In relation to the first short period of Family Payment, there was a notifiable event which occurred on 11 November 1996. The Tribunal finds that because this notifiable event was not notified until 30 November 1997, then this event changed the appropriate tax year to the 1997/98 year and thus it was appropriate under section 1069-H18 of the Act to use the estimate of $61,000 for the 1997/98 year to calculate qualification and payment for the period 20 November 1997 to 31 December 1997. The second part of the Family Payment/Family Allowance period occurs from 1 January 1998 until 8 October 1998. On 15 July 1997 and 5 November 1997, the Tribunal finds that two notifiable events occurred. As a result of this, section 1069-H16 of the Act is activated to change the base year to the event year which, in this case, is the 1997/98 tax year.

77. It is not disputed that Mr Lloyd provided an estimate of combined income of $61,000. The actual income for 1997/98 was $67,747 which is 1% greater than the 10% margin of error allowed. It matters not, in the Tribunal's view, that Mr Lloyd's actual income was only slightly over the allowable margin of error or significantly over the estimate.

78. Once Mr Lloyd's actual combined income for 1997/98 exceeded 110% of the estimated income for 1997/98, then the Family Payment/ Family Allowance had to be recalculated using actual income. Re-calculation of the Family Payment/ Family Allowance indicated that Mrs Lloyd was paid in excess of her entitlement and accordingly, a debt arose to the Commonwealth under subsection 1223 of the Act and is recoverable under subsection 1223(4) of the Act.

79. Accordingly, the Tribunal finds that Mrs Lloyd was paid in excess of her Family Payment/ Family Allowance entitlement between 13 November 1997 and 8 October 1998. The calculation of the overpayment is based on the correct application of the provisions of the Act as it relates to assumed notifiable events, re-calculation of Family Payment arising out of a notifiable event and re-calculation of Family Payment following the underestimate of income for the 1997/98 financial year. The Tribunal determines that the correct amount of overpayment is $563.70 and that this amount is a debt due to the Commonwealth under section 1223 of the Act.

80. Having so found, the Tribunal turns to consider the issue of recovery of the debt.

81. The Tribunal makes a number of general findings. Mr Lloyd presented as an intelligent, articulate man. He stated that he did not realise the significance of the "10% rule". The Tribunal notes that the claim form at two locations informs that if one's actual income is 10% more than estimated income, then the claimant may have to repay Family Payment/ Family Allowance. Further, the Tribunal notes Departmental letters sent to Mrs Lloyd on 14 November 1997 and 24 July 1998 specifically detail that she is being paid Family Payment/Family Allowance based on an estimated combined income and that if her income actually exceeded $67,100, then the Department should have been informed. Mr Lloyd stated that Mr and Mrs Lloyd did not inform the Department of any increase in their actual income despite, in February 1998, Mr Lloyd being aware that he had worked greater than the five to six weeks he had originally estimated and therefore logically, he was likely to be in excess of his estimated income of $61,000 and the 110% estimated income of $67,100. Mr and Mrs Lloyd chose not to notify the Department of this change in circumstances when they were obliged under the legislation to do so. Further, the Tribunal notes the inconsistency in Mr Lloyd's evidence that on the one hand he found the process of claiming Family Payment/ Family Allowance simple and one which he understood and his other evidence that he found it difficult to complete the claim form given his particular circumstances and trying to fit the facts as they related to Mr and Mrs Lloyd, "the square peg", into the round hole of the claim form. If Mr Lloyd was at all concerned or confused about the difficulty of providing the required information, he should have informed the Department and sought clarification. That he did not do so was to his peril. Further, when Mr Lloyd realised in February 1998 that he was probably in excess of his estimated income, he should also have notified the Department and either revised his estimate or sought clarification of his situation. Mr Lloyd's evidence was that he did not do this because he did not wish his Family Payment/ Family Allowance to cease.

82. The Tribunal makes the general point that the public purse is limited. Payment of various social security benefits, including Family Payment/ Family Allowance, is made only to those persons who are qualified and in Mr Lloyd's specific case, qualified in relation to their financial circumstances. To suggest that estimates of income should be artificially manipulated to the benefit of the claimant is not, the Tribunal suggests, what is intended in the spirit of the legislation. Claimants must provide truthful and accurate estimates of income based on the information available to them. This Mr Lloyd did but, with the benefit of hindsight, he considered that if he had artificially inflated his estimate on the claim form then he may not have incurred a debt. Mr Lloyd provided the estimate at the time on the best information he had and this is what was required of him. The Tribunal considers that Mr Lloyd had available to him all of the information required upon which to make an estimate of his income. The Tribunal does not consider that the Department misled Mr Lloyd or provided insufficient information. In so finding, the Tribunal acknowledges that the area of Family Payment/Family Allowance is complex. The Tribunal acknowledges that the information provided to claimants/recipients changed in late 1998, but does not consider that this amounts to Departmental administrative error.

83. It is clear that administrators of social security legislation must ensure that claimants and recipients are appraised of the consequences and implications of providing or not providing certain information. This, the Tribunal considers, was done. Further, claimants and recipients have responsibilities to comply with the legislation which governs the benefits or allowances which they seek. If Mr Lloyd had any confusion or misapprehension about the process he was embarking on, he should have sought clarification from the Department. Further, the Tribunal finds that it was not up to the Department to advise Mr Lloyd of the estimate he should provide to maximise his payability under the Family Payment/Family Allowance provisions. It was Mr Lloyd's responsibility to provide the Department, based on his own knowledge of his particular circumstances, with the estimate of his combined income. The Tribunal considers, based on Mrs Lloyd's evidence, that the probable situation which occurred during late 1997/ early 1998, was that both Mr and Mrs Lloyd were busy with their respective employments and had failed to properly consider and reflect upon their responsibilities for notification under the Family Payment/Family Allowance provisions. The Tribunal finds that Mr Lloyd erred in not keeping the Department informed of changes to his estimated income as he became aware of it and as was required of him under the Act. Accordingly, the Tribunal finds that there is no sole administrative error on the part of the Department in this matter.

84. Turning to the issue of special circumstances, this term has been defined in a number of Tribunal and Federal Court decisions. Generally speaking, special circumstances would be found in situations where circumstances were unusual, exceptional or uncommon and where not to apply the discretion contained in section 1237AAD of the Act would be unjust or unfair. There are no financial or health circumstances operating in Mr and Mrs Lloyd's situation which could be considered special. Mr Lloyd has asked the Tribunal to consider a combination or circumstances as special in his and Mrs Lloyd's case, being the difficulty in estimating their combined income, the lack of Departmental information or misleading information provided to Mrs Lloyd and himself in relation to estimating their income and the implications of providing various estimates. A further special circumstance was to be found, Mr Lloyd submitted, in the infrequency of people, such as himself, being self-employed and having a difficulty in estimating income. The Tribunal finds that none of these circumstances could be considered special in the legislative sense. There are many claimants in Mr and Mrs Lloyd's situation who are self-employed, who have irregular income and may have difficulty in estimating their income. That is precisely why the legislators, in their wisdom, allowed a 10% margin of error to be applied to the calculation of estimated income. The Tribunal itself has dealt with a number of such cases. That there is possibly a difficulty in estimating income is acknowledged, but this is not a special circumstance.

85. In relation to Mr Lloyd's submission that there should be a concession allowed for those people in his circumstance and that those self-employed or in receipt of irregular income be deemed to have estimated their income at the higher level, the Tribunal notes that this is not a matter which could be considered under the current legislative provisions for special circumstances and is one which Mr Lloyd may wish to take up in the Parliamentary arena.

86. In conclusion, while the Tribunal agrees that section 1237AAD of the Act was enacted to allow for unique, or unusual circumstances not covered by other provisions of the Act, in all of the circumstances and in combination, the Tribunal does not consider that Mr and Mrs Lloyd's circumstances in the legislative sense can be considered to be special. Therefore, the Tribunal determines that the debt of $563.70 cannot be waived in part or in whole under section 1237AAD of the Act.

87. In all of the circumstances and for the reasons set out above, the Tribunal affirms the decision under review.

I certify that the 87 preceding paragraphs are a true copy of the reasons for the decision herein of:

Ms S M Bullock, Member

Signed: .....................................................................................

Associate

Date/s of Hearing 19 October 1999

Date of Decision 14 February 2000

Counsel for the Applicant Mr D M Lloyd

Counsel for the Respondent Ms S Fahey, Departmental Advocate