Wilson and Secretary, Department of Education, Employment and Workplace Relations and Anor [2009] AATA 35 (19 January 2009)

Last Updated: 20 January 2009

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 35
ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2008/3587

GENERAL ADMINISTRATIVE DIVISION		)
	Re		AMANDA WILSON

Applicant

And

SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS & SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondents

DECISION

Tribunal

MS N BELL, Senior Member

Date 19 January 2009

Place Sydney

Decision

The decision under review is set aside and instead the Tribunal decides that the debt owed by Mrs Wilson to the Commonwealth should be waived.

...............................
MS N Bell
Senior Member

CATCHWORDS

SOCIAL SECURITY – Family Tax Benefit – Child Care Benefits – overpayments – debt due to the Commonwealth – debt waived – special circumstances as grounds for waiver – severer financial hardship not demonstrated – should waiver be refused – decision under review is set aside.

A New Tax System (Family Assistance) (Administration) Act 1999

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

Re White and Secretary, Department of Family and Community Services [2004] AATA 13.

REASONS FOR DECISION

19 January 2009

MS N BELL, Senior Member

1. Mrs Amanda Wilson received payments of Family Tax Benefit (FTB) and Child Care Benefit during the 2006/2007 financial year. The payments were calculated on the basis of estimates she had given of her and her husband’s income for that financial year. Those estimates did not include Mr Wilson’s net rental property loss in respect of two investment properties he owned in partnership with other members of his family. This omission was made by Mrs Wilson because of incorrect advice on the Family Assistance Office website and because of incorrect advice Mr Wilson was given in a telephone conversation with an officer of the Family Assistance Office to the effect that net rental property loss need not be included in income estimates. There is no dispute about these matters.
2. There is also no dispute that, because of the estimates given by her, Mrs Wilson was overpaid FTB and Child Care Benefit. Centrelink decided to raise and recover debts of overpayment of these benefits. There is no dispute about the amount of the overpayment, nor that it constitutes a debt owed to the Commonwealth. However, Mrs Wilson maintains that the debt should not be recovered.
3. There are, in effect, three bases on which recovery of a debt of overpayment of FTB or Child Care Benefit may be foregone:
   1. Write off (section: 95, of the A New Tax System (Family Assistance) (Administration) Act 1999 (FA Admin Act));

ii) Waiver due to sole administrative error (section: 97, FA Admin Act); or

iii) Waiver due to special circumstances (section: 101, FA Admin Act).

4. There is no dispute that write off of the debt is not available. Mrs Wilson has the capacity to repay the debt by instalments.
5. While there is no dispute that the debt is attributable solely to administrative error, section 97 of the FA Admin Act also requires, among other things, that the person would suffer severe financial hardship if the debt were not waived. There is no evidence to support that conclusion in Mrs Wilson’s case and no dispute that recovery would not result in hardship of that kind. Waiver under section 97 of the FA Admin Act is therefore not available to Mrs Wilson.
6. The remaining issue is whether there are special circumstances that make it desirable to waive Mrs Wilson’s debt.

WAIVER DUE TO SPECIAL CIRCUMSTANCES

7. Section 101 of the FA Admin Act provides:

101.  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 the family assistance law; 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.

8. There is no dispute that Mrs Wilson satisfies the requirement in section 101(a) of the FA Admin Act in that the estimates given by her were provided on the basis of the advice she and her husband received from the Centrelink website and from a Centrelink officer.
9. In relation to section 101(c) of the FA Admin Act, it has already been established that write off of the debt is not appropriate.
10. There remains the requirement in section 101(b) of the FA Admin Act.
11. In Secretary, Department of Social Security v Hales (1998) 82 FCR 154 the Federal Court held that “the exclusion of financial hardship alone as a special circumstance does not mandate its inclusion in the range of matters constituting such circumstances for the purpose of enlivening the Secretary’s discretion”. (at p.162)
12. Mr Wilson’s evidence was that he is currently employed on a continuing contract and earns in the vicinity of $65,000.00 per annum. Mrs Wilson is also employed on a contract basis and has a salary package of approximately $59,000.00 per annum. They have a mortgage on an investment property in which Mr Wilson has a 35% share. His indebtedness under that mortgage is approximately $230,000.00. Mr Wilson also has a debt of $20,000.00 being the shortfall after the sale of another investment property. In addition, they have a credit card debt of approximately $9,000.00. They rent their residential home.
13. These circumstances do not amount to financial hardship, but, following the decision in Hales, this is no bar to a finding of special circumstances were another special situation to be found.
14. Mr Wilson also gave evidence that his and his wife’s health is good and their two children, aged three and one, are well. He gave evidence of no circumstances that he considered out of the ordinary or exceptional except for Centrelink’s erroneous advice and his and his wife’s reliance on it. This, he submitted, constitutes the special circumstances of the case.
15. The question of whether administrative error should be included in a consideration of special circumstances was canvassed in the Tribunal’s decision in Re White and Secretary, Department of Family and Community Services [2004] AATA 13. In that decision the Senior Member said:

“39. Four, there must be “special circumstances" (other than financial hardship alone) that make it desirable to waive (s 101(c)). There is a particular circumstance in the present case that I consider sufficiently special to justify waiver under this section. This is the failure of the Centrelink officer to give Mrs White accurate advice in April 2001 and that officer's role in discouraging Mrs White from providing an estimate of her own income.
40. This was an issue in relation to waiver because of administrative error. Generally I see no role for matters of administrative error when considering this section of the FA Admin Act or s 1237AAD of the SSA. It seems to me clear that Parliament generally intended s 97 of the FA Admin Act and s 1237A of the SSA to “cover the field” in matters of possible waiver because of administrative error. However, I think the matter different where the special circumstance consists of bad advice from Centrelink. The policy and procedure manuals in the Department of Social Security as long ago as the mid-1980s accepted that incorrect advice provided by that department amounted to a special circumstance.”

16. The Senior Member then went on to cite a number of decisions in which erroneous advice from Centrelink was held to amount to special circumstances.
17. There are competing considerations here. The first is that a person who is not eligible to receive a benefit should not receive it and the public purse should be protected. The second is that waiver because of administrative error is dealt with specifically, with certain conditions, in section 97 of the FA Admin Act and it could be argued that section covers the field. The third consideration is that a government agency should not give incorrect advice to persons who rely on the agency for guidance. In particular, advice that appears on a website for widespread consumption and reliance must be accurate and carefully expressed. Erroneous advice on a website will reach many more people than will advice given in error by a single officer. Effective, efficient and fair administration is not promoted if an agency is protected from the consequences of its erroneous advice by reliance on a construction of the legislation it administers.
18. I agree with the view expressed by Senior Member Sassella in Re White. The structure of the FA Admin Act suggests that waiver due to administrative error should be considered distinct from waiver due to special circumstances. However, I do not consider that the inclusion of the circumstances of that error as a special circumstance is precluded where, as in this case, the error is of some unusual magnitude. Error in administration is not unusual. It may even be inevitable in an administration as large as the one charged with administering social security payments in Australia. However, the posting on the agency’s website, of erroneous advice about the provision of estimates used to calculate FTB, is an error with the potential to detrimentally affect many thousands of people. It did detrimentally affect Mrs Wilson who is now faced with the repayment of a substantial debt.
19. I consider these circumstances to be so special as to make it desirable to waive the debt.

DECISION

20. The decision under review is set aside and instead the Tribunal decides that the debt owed by Mrs Wilson to the Commonwealth should be waived.

I certify that the 20 preceding paragraphs are a true copy of the reasons for the decision herein of

Signed: .................................SGD....................................................

Associate: Felicia Daniele

Date/s of Hearing 22 December 2008

Date of Decision 19 January 2009

Representative for the Applicant Mr Jason Wilson

Representative for the Respondent James Larcombe, Legal Services Officer