Salangsang and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 55 (27 January 2010)

Last Updated: 29 January 2010

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 55

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2008/3026

GENERAL ADMINISTRATIVE DIVISION		) No 2008/3031
	Re		DONNA AND PAUL SALANGSANG

Applicants

And

SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal

M J Carstairs, Senior Member

Date 27 January 2010

Place Brisbane

Decision

The Tribunal affirms the decision under review with respect to Donna Salangsang’s sickness allowance debt for the period 8 December 2003 to 14 March 2004. The Tribunal sets aside the decision under review as it relates to Paul’s Salangsang’s parenting payment (partnered) debt for the period 8 April 1999 to 24 July 2001, the debt being waived on the grounds of special circumstances. The Tribunal varies the decision under review as it relates to Paul Salangsang’s parenting payment (partnered) debt for the period 4 January 2002 to 17 June 2004, by waiving that part of the debt that represents overpaid parenting payments from 26 March 2004. That is, $1,873.46 is waived.

...................[sgd].........................

Senior Member

CATCHWORDS

SOCIAL SECURITY – sickness allowance – debt raised – failure to report income – special circumstances considered – decision under review affirmed

SOCIAL SECURITY – parenting payment (partnered) – debt raised – proof of debt – debt waived on grounds of special circumstances – decision under review set aside

SOCIAL SECURITY – parenting payment (partnered) – debt raised – misreporting of partner’s income – part of debt waived on grounds of special circumstances – decision under review varied

Social Security Act 1991 (Cth), ss 1223, 1224, 1228B, 1236, 1237, 1237AAD

Director- General of Social Services v Hales (1983) 47 ALR 281

Riddell v Secretary, Department of Social Security [1993] FCA 261; (1993) 42 FCR 443

Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541

Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435

Re McLean and Secretary, Department of Family and Community Services [2003] AATA 321

REASONS FOR DECISION

27 January 2010

M J Carstairs, Senior Member

1. Paul and Donna Salangsang have been receiving Centrelink payments for a number of years. They have a young family - two teenage children and a three year old – as well as now providing care at home for Mrs Salangsang’s elderly father. The various payments they have received from Centrelink over the years have reflected their family circumstances – parenting payments, family benefits, and in more recent time, carer payments. In the period I am looking at, Mrs Salangsang was the main breadwinner in the family
2. The matters in issue now concern debts that Centrelink raised in 2007:
   • for sickness allowance paid to Mrs Salangsang between 8 December 2003 and 14 March 2004 (the “sickness allowance debt”);
   • for parenting payment paid to Mr Salangsang between 8 April 1999 and 24 July 2001 (the “first parenting payment debt”); and
   • for parenting payment paid to Mr Salangsang between 4 January 2002 and 17 June 2004 (the “second parenting payment debt”).
3. From 1997 and throughout the period of these debts, Mrs Salangsang worked only for Noosa Shire Council as a counter officer, although I understand that after commencing studies in town planning from the University of New England she ultimately graduated with that qualification. Throughout the debt period, Mrs Salangsang worked part-time. It seems her hours varied from week to week and she received some overtime. Her income, in other words, was quite variable.
4. During this time, Mr Salangsang was telling Centrelink either that he would not be working at all and, it seems, was more heavily involved with home duties; or that he had limited earnings, low enough, I note, that he had been told he did not have to lodge tax returns[1]. These were earnings from his handyman business, Able Property Maintenance, recently renamed Noosa Heads Unit and Accommodation Maintenance.
5. These days Mr and Mrs Salangsang have reversed roles: she no longer works in paid employment but instead receives Centrelink carer payments for care she provides to her father. Mr Salangsang runs the seemingly still struggling handyman business. He said that its net returns were $11, 816 in the last tax year.
6. At some stage Centrelink carried out an audit on their payments and it became apparent that they had received more than they ought. Centrelink, after obtaining the full details of her earnings from 1999 onwards from that time. recalculated what they should have been paid from that time. Centrelink then took action to recover the overpaid amounts, this being by way of withholdings of $30 per fortnight from Mrs Salangsang’s current carer payments.

THE ISSUES

7. The issues are whether, with reference to the three periods identified, Mr and Mrs Salangsang have incurred Centrelink debts and whether, in each instance, these debts ought to be recovered. I shall look at each debt in turn, but firstly, it is appropriate to say something about the grounds upon which Mrs Salangsang, who conducted the case on behalf of herself and her husband, challenged these debts.

BACKGROUND MATTERS

8. Mrs Salangsang’s argument in essence was that they should not have incurred Centrelink debts because she and her husband have regularly updated information about their earnings. She believes that any error was on Centrelink’s part, with Centrelink having lost or misplaced information that was provided. She however did acknowledge that she has become more diligent with record- keeping after this experience.
9. Mrs Salangsang was confident that some of the documents which they had provided might yet be located if better searches were carried out. To this end she lodged a Freedom of Information (“FOI”) request. More documents became available as a result of her FOI request. This material tended to confirm that she was in the habit of providing Centrelink with her payslips from Noosa Shire Council on a somewhat regular basis. Other documents confirmed this as well.[2]
10. I adjourned the hearing to have Centrelink undertake further searches on Mrs Salangsang’s behalf, that is, in addition to what had come from her FOI application. Some additional documents were located, including more Noosa Shire Council payslips, although perhaps not as many as Mrs Salangsang firmly believes that she has given to Centrelink over the years.
11. I thought that it was likely that Mrs Salangsang had done as she maintained she had, that is by producing actual payslips and letters from her employer. She impressed me as honest and as a quite organised person. It also struck me that, having had the one employer for some ten years, she was unlikely to be confused about having regularly sought and provided payslips for Centrelink purposes and having approached Noosa Shire Council to provide her with letters for Centrelink purposes. There were a number of examples of this kind of correspondence amongst the documents.
12. I was also mindful that Mr and Mrs Salangsang were receiving Centrelink payments that normally do require regular updating of income – family tax benefit, and parenting payments. In that regard, it was her submission that Centrelink was unlikely to have kept paying them as they did over the years, without asking for proof of income. She also referred to several other kinds of claims made by the family during this time – these included a claim for Austudy; two claims for carer payments (the first with respect to care she had provided to her father-in-law prior to his death; the second for the care she now provides for her father); and a claim for sickness allowance several months before the claim the subject of her sickness allowance debt. In addition, Centrelink searches revealed Mrs Salangsang claimed parenting payment (single) in August 2001[3], and produced her then most recent payslip from Noosa Shire Council[4]. (However the records appear to show that Mr Salangsang was paid parenting payment single at this time, not Mrs Salangsang[5]). When they reconciled late in December 2001, it seems Mr Salangsang was simply transferred to parenting payment partnered without the need for a new claim. They provided new estimates of income at that time[6].
13. The salient point here is that all these claims would have required that Mr and Mrs Salangsang verify their income and assets. It also makes more understandable Mrs Salangsang’s sentiment that they were “always” updating Centrelink. I do accept that Mr and Mrs Salangsang were attempting to be accurate in that regard. This was not previously as evident as it now is, as a result of the additional searches that have been undertaken. For instance the original decision maker referred to there being only one occasion – on 13 May 2002 – when Mr or Mrs Salangsang verified their income with Centrelink. The Social Security Appeals Tribunal referred to three occasions – 31 May 1999, 1 August 2001 and 13 May 2002. The materials before me revealed a Centrelink summary (from the EANS screen) which showed eight occasions during the period of these debts when the Salangsang’s reported their income.[7] Now, in addition to those eight occasions, we know that this information had been provided when lodging other claims, as well there being other instances where payslips, bearing Centrelink date stamps, have been found.
14. Of course, simply providing relevant information for a particular claim does not of itself entitle Mrs Salangsang to a favourable outcome with respect to these debts. In Centrelink matters, timing is important, as is whether a claim is granted or not. Some of these claims were not granted (the first sickness allowance; the Austudy). In that sense, providing this information would not necessarily have had any consequence for existing payments. Nevertheless it provides support for their honesty, a matter of some importance when it comes to questions of recovery.
15. The respondent’s case can be briefly put, as being that, despite the additional documentation now located, these debts must be maintained because the Social Security Act 1991 (“the Act”) enables most overpayments to be recovered as debts, even where people have given their information promptly and completely. In that regard Mr Hamilton, who appeared for the respondent, pointed to the categorical nature of debt provisions, in particular s 1223 of the Act, the focus of which is upon the incorrect receipt Centrelink payments, rather than on the behaviour of the recipient.
16. Section 1223 of the Act is such a provision:

Subject to this section, if: 
(a) a social security payment is made; and
(b) a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit; 
the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.

17. Mrs Salangsang also said that she was challenging the debt calculations. However she did not point to any particular calculation errors. Having considered that aspect of the case, I can only observe that each debt was calculated by incorporating the confirmed data about her wages and allowances, that data being provided by Noosa Shire Council in 2007, and applying Centrelink debt calculation programmes to rework their payments. The results reveal that at times they were underpaid, but for the most part they were overpaid. Having looked at the overpayment calculations for each debt by checking the data used in a sample of fortnights, and in the absence of any particular error being identified by Mrs Salangsang, I accept the correctness of the calculation process.
18. I will turn then to the debts and questions of waiver.

DONNA SALANGSANG’S SICKNESS ALLOWANCE

19. The sickness allowance debt relates to a period of some three months after Mrs Salangsang had bowel surgery at the end of 2003. There was some reference to her having had a bad fall on 8 December as well, when it was feared she had broken her leg.
20. It was evident from the documents that Mrs Salangsang was quite desperately worried about how they would be able to make payments on their mortgage while she was not working. She had exhausted all her sick leave earlier the same year when she contracted Ross River Fever. Various file notes reveal her agitated telephone calls to Centrelink officers, seeking early access to superannuation. This, it appears, would have been possible, if she, rather than her husband, had been the primary Centrelink recipient.
21. It is important at this point in time to appreciate that Mrs Salangsang believed she would not be paid wages while she recovered. I should make some mention of the information that she provided on the sickness allowance claim form, which on the surface seemed misleading. Oddly, Mrs Salangsang made no direct mention of her employment and left unanswered a number of relevant questions -- including one asking “Are you currently employed?” This omission might suggest that Mrs Salangsang was attempting to misrepresent her circumstances. However it was clear that a Centrelink officer (also named Donna)[8] assisted Mrs Salangsang to complete the form, and once it was lodged, Centrelink followed up with telephone calls to verify matters with Noosa Shire Council. It was amply evident that Centrelink was well aware of the details of Mrs Salangsang’s employment. All she really needed to do was sign the claim form.
22. This is confirmed by a file note of the telephone call in which the Noosa Shire Council confirmed that Mrs Salangsang had last worked on 5 December 2003; and that she had no sick leave entitlements. They also confirmed that she indeed would be returning to work[9]. (I would observe here that this particular file note only became available as a result of Mrs Salangsang’s FOI application, and had not been filed with the respondent's materials, as one might otherwise have expected).
23. There had been an earlier written confirmation from Noosa Shire Council’s payroll supervisor in an Employer Verification report (dated 28 November 2003)[10] reporting that Mrs Salangsang’s last day of work was expected to be 10 December 2003 and that her “final net payment” was to be $473.80 (these being leave payments). In the event, 8 December 2003, became the start date and this may have had something to do with Mrs Salangsang’s other injury.
24. But as events transpired, after only a month on leave, Mrs Salangsang was approached by Noosa Shire Council to work from home, and they provided her with a lap top to do so. They had found some work involving mapping, which would not require her to stand and could be done at home. Her wages from Noosa Shire Council then resumed, and were soon back at usual levels, and she had missed only one month of pay.
25. Centrelink had no record of this happening and accordingly continued to pay Mrs Salangsang’s sickness allowance as if she was not receiving any salary. During this time Centrelink sent Mrs Salangsang several notices telling her that she needed to let Centrelink know if she commenced work. Mrs Salangsang ought to have noticed at this time that her sickness allowance payments did not alter. This was her responsibility.
26. Mrs Salangsang maintains that she revisited her Centrelink office, in January 2004, to let them know she was working from home. However, there is no record of that interview taking place. Mrs Salangsang says she recalls some things about that visit including that she was provided with a comfortable chair. However I doubt that she did go back to Centrelink at this time and I regard her memory as faulty here. If she had attended the Centrelink office I would expect that there would be a record. This would be a crucial interview for a sickness allowance recipient. I am more so persuaded of this because of the otherwise detailed records that Centrelink has with respect to this brief period of payments. On balance, I am satisfied that Mrs Salangsang did not tell Centrelink when she started working from home.
27. However even if she had provided Centrelink with this information it was not recorded and, as I have already noted, under the legislation Mrs Salangsang would have a debt even if she were without fault. However I do not think that she was without fault with respect to this debt.
28. It was evident that Mrs Salangsang was sent several Centrelink notices telling her that her income was being held at NIL. There were no less than five letters – one dated 11 February 2004[11]; one dated 17 February 2004[12]; one dated 3 March 2004[13]; and one dated 6 March 2004;[14] and one dated 12 March 2004[15]. These referred to Centrelink holding a medical certificate that “tells us you are unable to work or study”[16]. A further letter dated 16 March informed her that according to Centrelink records her medical certificate had expired on 2 March and she would require a further certificate.[17] There is no indication that these multiple letters elicited any response from Mrs Salangsang.
29. Having looked at this period, I am satisfied that this debt was correctly raised under s 1223 of the Act. On my checks, it also appears the debt was correctly calculated, at least with respect to the figure settled upon by the authorised review officer, that is $1,684.53.
30. I need also to mention that a penalty amount of $168.45 was added to the debt amount. A penalty can be added for failure to declare earned income, the penalty being set at 10% of so much of the debt as arose because the person refused or failed to provide the information. The penalty has been applied correctly and in accordance with the Act: s 1228B. Mrs Salangsang had no reasonable excuse for not providing the information that she was working from home so the penalty cannot be waived. I would therefore affirm the imposition of the penalty and the overall calculations of both the debt and the penalty. This means that the sickness allowance debt (with penalty) stands at $1852.98
31. I do not see the circumstances in relation to Mrs Salangsang’s sickness allowance debt as warranting an exercise of any discretion as to waiver. On the facts here, the debt did not arise from administrative error on Centrelink’s part, and I do not see any unfairness or injustice arising to Mrs Salangsang in effecting recovery from her of money to which she plainly was not entitled after resuming work. This means that there are no “special circumstances” and accordingly I affirm the decision to raise and recover the sickness allowance debt.

PAUL SALANGSANG’S DEBT IN THE PERIOD 1999 – 2001

32. My concerns with Mr Salangsang’s first debt period are that there is so little documentation with respect to it. There was little attempt to prove the circumstances of debt taking into account the legislation applying at the time of it.
33. At the outset, I would make the observation that it seemed a little unusual that Centrelink would wait until October 2007 to raise a debt with respect to a period that started over eight years before. That would be done, I would have thought, only on the clearest of evidence.
34. The content of the letter raising the debt is brief:

The correct amount of your partner’s earnings from NOOSA SHIRE COUNCIL was not taken into account in the payments made to you. The declared income was $31881.19 however the actual income was $38,573.53. This means you have been overpaid $4162.09 for parenting payment.

35. According to the respondent’s Statement of Facts and Contentions, this debt was raised under s 1224 as then in force in the Act, but since repealed[18]. Section 1224 of the Act required that a person have received an amount of social security payment because of a false statement or a failure or omission to comply with a provision of the Act.
36. It is noteworthy that s 1224 was not relied upon by the authorised review officer or by the Social Security Appeals Tribunal. Both appear to rely, rather, upon  s 1223 of the Act, but seemingly with reference to its wording after 1 July 2001, when it was significantly amended. The first parenting payment debt period predates that, and so is it is the earlier wording of s 1223 of the Act that must be applied.
37. The difficulties presented by the wording of s 1223 of the Act (pre-amendment) have been commented upon in Tribunal decisions. There were questions about whether, for instance, it was possible to raise a debt if a person had correctly advised their circumstances but Centrelink had incorrectly or inaccurately recorded that information. For a debt to be raised under s 1223 of the Act as in force at the time of this debt, or under s 1224 of the Act, there would be a number to things a decision-maker would want to know.  Amongst these would be what the recipient had advised Centrelink about their earnings and in what way any information provided was found to be wrong or deficient. There is little that enables an answer to be given to those questions in the documents before me. It was not until I requested it that there was even a copy of Mr Salangsang’s claim form for parenting payment (lodged in December 1998)[19].
38. The claim form is instructive. Mr Salangsang told Centrelink in that form:
    • that his wife worked part-time for Noosa Shire Council and earned $534 per fortnight; and
    • he provided proof of her earnings from the Council[20].
39. As to what was told to Mr Salangsang concerning his obligations to provide information to Centrelink, there were four notices that Centrelink had sent during, or just before the start of the debt period[21]. Those notices told Mr Salangsang that he needed to keep Centrelink advised of a number of things, including if :
    • his income went above $134.61 and his wife’s above $534.71 per fortnight (January 1999 notice);
    • his income went above $60.00 per fortnight his wife’s above $536.26 (July 1999 notice);
    • his income went above $62.00 and his wife’s above $536.19 per fortnight (June 2000 notice); and
    • his income went above $62.00 and his wife’s above $976.22 per fortnight (February 2001 notice).
40. It seemed apparent from this that the Salangsang’s were providing some financial information, as Mr Salangsang’s rate of parenting payment changed from time to time. There was nothing in the documentation provided to me that indicated from when or where this information came. The Centrelink document “Archive Display Summary” showed occasions when Centrelink contacted Mr Salangsang (during the first debt period). These were in an abbreviated form, however I was not provided with a detailed explanation of what the contacts were about. For instance, on 8 July 1999 Centrelink requested that Mr Salangsang provide his tax returns and a profit and loss statement.
41. I have no reason to think that Mr Salangsang did not provide these. I accept as a general statement what Mrs Salangsang said in her evidence that they provided anything that Centrelink requested, at the time it was requested. I also doubt that Centrelink would simply take no action to follow up once such a specific request was made, if Mr Salangsang had not provided the information as requested.
42. I note also that with respect to the first parenting payment debt period that there is an unexplained gap in Centrelink records (between May 1999 and February 2001) where information about Mrs Salangsang’s income was not collected[22]. As this kind of information was regularly collected for every other year, I regard it as highly unlikely that no information came in at all, over such a lengthy period.
43. There was nothing in the documents to show what information Centrelink collected with respect to the other payments that the family were receiving during the first parenting payment debt period, such as family tax benefits. I was told that there were no family tax benefit forms contained on Mrs Salangsang’s files from 1999 to 2004. (Centrelink’s Record Management Unit advised that any documents stored off-file would have been destroyed after two years).
44. I note, in addition, that Centrelink had not sought any relevant tax returns with respect to this debt, despite these being requested for Mr Salangsang’s tax returns relevant to the two later debt periods.
45. There is, I would reiterate, no foundation for the suggestion that Mr and Mrs Salangsang have been dishonest, or that they deliberately withheld information from Centrelink. It may well be true that they misreported their income. It seems to me that this was inadvertent as they did not fully understand what information Centrelink required. For instance I have come to the conclusion with respect to the second parenting payment debt period (January 2002 to June 2004) that they mistakenly reported net rather than gross income. I doubt also that they were in the habit of reading Centrelink letters. In other words they are not without fault, but this should not blind one to the deficiencies of the case presented against them. I do not believe it is possible on the evidence here to establish with any certainty the amount of any debt in the first debt period.
46. But there is a more fundamental issue and that is this: the delay here in raising the debt puts Mr Salangsang at a real disadvantage in contesting its correctness so many years after the event. Social security recipients, who most usually will find themselves without legal assistance, face considerable difficulties in defending a case in these circumstances.
47. It will rarely be the case when Centrelink raises a debt eight years after the event (at least, a debt relating to failing to correctly advise earned income) that the records will have been retained concerning what was reported to Centrelink at the time. That puts people at real disadvantage, not only in contesting the calculation of the debt, but also with respect to the separate grounds of recovery. Questions of waiver involve discretions which address, amongst other things, how the debts occurred, and a recipient’s actions at the time.
48. I agree with the sentiments of the Tribunal in Re McLean and Secretary Department of Family and Community Services [2003] AATA 321:

..the difficulties faced by the applicant in meeting an allegation of debt after the elapse of six years should be taken into account in considering whether special circumstances exist. The substantial delay present in this case meant that the applicant could not access any records including payslips, about the income declared by her and the forms completed by her had long since been destroyed.

49. Taking into account my reservations regarding the proof of debt, as well as Centrelink’s significant delay in raising the debt, I regard it as an appropriate exercise of the discretion available under s 1237 AAD to waive the recovery of the first parenting payment debt on the grounds of special circumstances. This is appropriate not only because of the family’s financial circumstances. This debt, as a whole, had has placed an undue burden on the family who are struggling financially, and have significant other responsibilities in their role as carers. I regard as unjust the delay on Centrelink’s part in raising this debt, in the absence of any evidence that convincingly shows that they provided information that was incomplete or erroneous about the income that they were receiving.

MR SALANGSANG’S DEBT IN THE SECOND DEBT PERIOD: 2002 – 2004

50. With respect to Mr Salangsang’s second parenting payment debt, I would firstly observe that there are substantially more records available to rely upon with respect to the calculation of the debt.
51. Importantly, the amended version of s1223 of the Act applies, which allows overpayments, regardless of how they have arisen, to be recovered as debts.
52. The documents showed that the main cause of the overpayment was the changing level of Mrs Salangsang’s earnings from Noosa Shire Council. Two matters stand out in this period. Firstly the Noosa Shire Council records show that during the second parenting payments debt period, Mrs Salangsang earned some $61,085, whereas Centrelink records reflected her earning about $35,789 during that time. It is also true, again as noted by the Social Security Appeals Tribunal, that Mrs Salangsang’s earnings spiked upwards, and remained at that level, from about May 2003. Perhaps this may relate to her completing her university studies.
53. It was evident from the Noosa Shire Council “Employee History Summary,” which recorded her earnings from 1999 onwards, that for many years her “ordinary” fortnightly earnings (that is excluding overtime variations) rarely exceeded $600. From about the middle of 2003, there were many fortnights when her ordinary earnings were above $1,000, even without other allowances.
54. The information upon which Centrelink relied at the start of the second debt period seemed to be that referred to in a file note dated 28 December 2001, estimating income of $15,000 for her and $15,000 for her partner[23]. Taking net income that would be a pretty accurate account of Mrs Salangsang’s income. However it was not her gross income, even before her income rose in mid-2003.
55. Mrs Salangsang next telephoned a few days later to advise that Mr Salangsang would not be working and his income would be $8,700[24]. (I note that this accords with his Tax Notice of Assessment for the tax year 2001/2002[25]). There were few notices that issued to Mr Salangsang during the second parenting payment debt period. One notice issued at the start of the period[26], advised him that Centrelink was holding as Mrs Salangsang’s income at about $600 per fortnight and his income at about $134.
56. I was satisfied that as events transpired, Mr Salangsang did not inform Centrelink when the numerous changes in Mrs Salangsang’s income occurred. Mrs Salangsang had highly variable income and to report it correctly she needed to keep Centrelink regularly updated.
57. Not only was the reporting insufficient, it was also apparent that Mrs Salangsang mistakenly believed that she was required to report net earnings. Centrelink takes into account gross earnings. In that regard I note that when she claimed for carer payment on 30 December 2002[27], whilst she provided a fortnightly payslip which showed her gross earnings[28], on the claim form, where asked, Mrs Salangsang provided a net amount. Similarly, her sickness allowance claim form lodged in March 2003, when checked against the “Employee History Summary” provided by Noosa Shire Council, showed that Mrs Salangsang again provided her wages as a net amount. Mrs Salangsang was not alone in this; even the pay clerk at Noosa Shire Council had provided her with a letter for Centrelink advising that:

Donna Salangsang has been employed by Noosa Shire Council on a permanent part-time basis since 15th March 1997. Donna’s gross fortnightly wage is $534.71.

When checked against the equivalently dated entry on the “Employee History Summary” this was her salary minus allowances, and overtime[29]. Payslips from Noosa Shire Council also somewhat confusingly recorded as “gross pay” an amount which did not include “allowances”[30].

58. As a result of the under-reporting and misreporting of income I was satisfied on the evidence here that Mr Salangsang was receiving parenting payment in this period at a rate to which he was not entitled because of the level of his wife’s earnings at the time.
59. The scheme of the Act is that overpayments that are raised as debts will be required to be repaid unless capable of write-off or waiver. There was no suggestion that writing-off the debt (pursuant to s 1236 of the Act) was appropriate. Nor are there grounds for waiver based on administrative error.
60. The only grounds for waiver that ought to be considered are, again, are those for special circumstances. These grounds ought to be considered because Mr and Mrs Salangsang did not knowingly misrepresent their affairs or knowingly fail to comply with the Act. Had they done so, this would rule them out for consideration under this ground of waiver (s 1237AAD(1)(a) of the Act.) However, inadvertent or unintentional failures are not knowing failures: Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435. I was satisfied that theirs was an inadvertent failure.
61. It is unquestionably true that the starting point for any consideration of this discretion is that the person has received money to which he or she was not entitled. As Sheppard J pointed out in Director-General of Social Services v Hales (1983) 47 ALR 281 (at 323) that must be a paramount consideration. The public ought to be able to expect that money paid in excess of entitlements will be recovered.
62. However, I am particularly struck with the size of this debt, and the impact that its recovery will make on this very low income family. On this low income they have the burden of bringing up their still young family, but also now the care of an elderly disabled parent after similarly having provided care to the other grandfather. Their Statement of Financial Circumstances amply demonstrated the difficulties that the family face in covering all their expenses. It was quite evident that they have a modest lifestyle and struggle with a burden of other debt, with limited income. There was no suggestion that their circumstances will change for the better within any immediate timeframe. Mr Salangsang, I have noted had but small returns from his business last year. Mrs Salangsang now receives carer payments and is not in paid employment.
63. Even with the overall debt reduced, they face a long period during which they will have their income support payments reduced by withholdings. It seems to me this is disproportionate to their inadvertent errors. I am concerned that this amounts to an injustice, taking into account the evident administrative errors that contributed to the debt period extending as long as it did.
64. In particular Mr Salangsang was disadvantaged by administrative error when Mrs Salangsang’s sickness allowance ceased in March 2004. It must be recalled that Centrelink had been fully informed by Mrs Salangsang, and by Noosa Shire Council, at the time she claimed sickness allowance, that she would be returning to work once she had recovered from her surgery. This was known to Centrelink. That information ought to have found its way to Mr Salangsang’s parenting payment records, to avoid the overpayment, when her sickness allowance ceased to be paid. These people, after all, were long-term recipients of Centrelink payments; Centrelink had access to a great deal of their personal information. They had been providing information for many years, certainly from at least 1997 with respect to family tax benefits and parenting payments.
65. As events turned out, after Mrs Salangsang returned to work, Centrelink only sent Mr Salangsang one notice from then until the end of the second parenting payment debt period.[31]. So there was limited opportunity for him to become aware that his wife’s earnings were not being taken into account. That notice was sent on 29 March 2004, and yet the Centrelink records reveal that on 26 March 2004, Mrs Salangsang reported her earnings from Noosa Shire Council as $634.31. These two letters almost would have crossed in the mail[32].
66. The discretion for special circumstances should not be exercised lightly, but it is widely recognised that it is a discretion that ought to be exercised where the justice of the case requires it. In Groth v Secretary, Department of Social Security ([1995] FCA 1708; 1995) 40 ALD 541, Kiefel J, after referring to the authorities observed that special circumstances:

would require something to distinguish... [the]... case from others, to take it out of the usual or ordinary case. ...It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.

67. The Full Federal Court in Riddell v Secretary, Department of Social Security [1993] FCA 261; (1993) 42 FCR 443 observed, at 450:

Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other.

68. As to the circumstances here, I regard Mr and Mrs Salangsang as honest people who have inadvertently fallen into error in reporting their income. Unfortunately for them with respect to the second parenting payment debt period, few notices were issued to Mr Salangsang which might have alerted him to the potential debt.
69. Looking at the circumstances now, I accept Mrs Salangsang’s evidence that having the Centrelink debt, overall such a large amount, has caused them stress and ill health, at a time when they have the burden of care for a frail and elderly relative. Taking into account their particular circumstances and the contribution made by what I perceive to be administrative error, what suggests itself here as fair is to waive that part of the debt relating to the period from 26 March 2004. Mrs Salangsang’s sickness allowance had been cancelled and Centrelink knew, or ought to have known, that she was back at work [33]. Accordingly, I waive the amount of $1,873.46.

DECISION

70. The Tribunal affirms the decision under review with respect to Donna Salangsang’s sickness allowance debt for the period 8 December 2003 to 14 March 2004.
71. The Tribunal sets aside the decision under review as it relates to Paul’s Salangsang’s parenting payment (partnered) debt for the period 8 April 1999 to 24 July 2001, the debt being waived on the grounds of special circumstances.
72. The Tribunal varies the decision under review as it relates to Paul Salangsang’s parenting payment (partnered) debt for the period 4 January 2002 to 17 June 2004, by waiving that part of the debt that represents overpaid parenting payments from 26 March 2004. That is, $1,873.46 is waived.
    

I certify that the 72 preceding paragraphs are a true copy of the reasons for the decision herein of M J Carstairs, Senior Member.

Signed: ...............[sgd]....................................................

Emily Clarke, Associate

Date of Hearing 18 June 2009

Date of Resumed Hearings 17 September and 22 October 2009

Date of Decision 27 January 2010

The Applicants were self-represented

Advocate for the Respondent Mr R Hamilton

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[1] I do note, however, that in about August 2007, his accountant lodged tax returns for the five
years 2001/ 2002 – 2006/2006 inclusive.
[2] T59
[3] Document S8.
[4] Document S9.
[5] Document S12.
[6] Document S13.
[7] T57, p375-376.
[8] T15, p 154.
[9] Exhibit A2, p 9.
[10] T18, p 176.
[11] T28.
[12] T29.
[13] T30.
[14] T31.
[15] T33.
[16] T28, p 203.
[17] T36.
[18] T58, p 597.
[19] Document S1 of Supplementary Documents filed 10 August 2009.
[20] Document S2.
[21] January 1999; July 1999; June 2000: and February 2002 (T5 – T8).
[22] Document 57, at p 534.
[23] Document S13, p 88.
[24] Document S14, p 91.
[25] T58, p 490.
[26] TT10 notice dated 4 January 2002.
[27] Documents T12- T13.
[28] T13, p 99.
[29] T57, p 316.
[30] See, for example, payslip at S4, p 42.
[31] T38, letter dated 29 March 2004.
[32] T57, p376
[33] T58, p 528.