1. The overpayments which are the subject of this application are summarised below.

1. The Rent Assistance debt relates to amounts provided for as Family Tax Benefit under the A New Tax System (Family Assistance) Act 1999 (Cth) ("FA Act"). Section 58 of that Act provides that the annual rate of Family Tax Benefit is calculated in accordance with the rate calculator set out in Schedule 1 of the Act. Clause 38C(1)(c) of Schedule 1 provides that:

An amount by way of rent assistance for a period is to be added in working out an individual's maximum rate ... if the individual is not an ineligible homeowner.

1. The term "ineligible homeowner" is defined in s 13 of the Social Security Act 1991 (Cth) ("SS Act").
2. Mrs Alcock does not dispute that she was a homeowner with her husband for the whole of the period which is relevant to the decision under review. Her declaration in her Newstart Allowance claim, dated 9 September 2008, is evidence of that and she does not dispute the fact that she was an "ineligible homeowner".
3. Section 71(1) of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) ("FA Administration Act") provides that:

No entitlement to amount

(1) If:

(a) an amount has been paid to a person by way of family tax benefit, baby bonus or maternity immunisation allowance (the assistance) in respect of a period or event; and

(b) the person was not entitled to the assistance in respect of that period or event;

the amount so paid is a debt due to the Commonwealth by the person.

1. The relative Rent Assistance components of Family Tax Benefit that Mrs Alcock received during the period under review are as follows:

1. A summary of the amount received and the relevant entitlement to Carer Payment is as follows:

Amount paid for 7 March 2003 - 22 July 2008 $55,903.49

1. The applicant's evidence reveals a difficult situation for both herself and her husband Robert over an extended period. For all of the period under review, their son was a quadriplegic as a result of an accident. They cared for him at home, and subsequently he lived in separate accommodation not far away from their residence. While he had a carer allocated for some hours of the day, Mrs Alcock and her husband provided significant support to him. She told the Tribunal that she did call Centrelink on a number of occasions and told them that she was a homeowner. She also said "I feel quite sure I submitted some paperwork. I also made some phone calls". She thought that was in 2005/2006. Under cross-examination by Mr Hawker, Mrs Alcock said she told a social worker in about 2000, when she first completed documentation for Carer Payment, that she was a homeowner. She also referred to some notes that she brought with her that said that she had spoken to somebody at Centrelink about Rent Assistance and that she was entitled to rental assistance.
2. In respect of Carer Payment, Mrs Alcock's evidence was that she did get some letters from Centrelink about her obligation to report income and assets. Mr Hawker referred her to folios 53-55 of the T-Documents, which was a letter dated 27 November 2001. She agreed that she got some letters like that one throughout the period. Other examples of letters were presented to the Tribunal; for example, the Tribunal documents contained the following:
   • T10 - letter dated 25 May 2002;
   • T12 - letter dated 4 May 2005;
   • T13 - letter dated 25 May 2005;
   • T14 - letter dated 21 July 2005; and
   • T19 - letter dated 9 August 2006.

1. In respect of her circumstances, it was noted that her son was now deceased and that it had been a very difficult time for her and her husband throughout the period of the overpayments and since that time. The difficulties were not only emotional but also financial, as Mr Alcock's business affairs had suffered during the period of severe economic downturn.
2. Mrs Alcock told the Tribunal that she was now employed by an organisation promoting small holiday apartments. She receives gross pay of $569 per week for working part-time from Monday to Friday and Saturday mornings. She advised that she had experienced a number of health problems affected by stress: she had a hearing problem, and the facial muscles around one eye required medical treatment. However, she said that during the period of the debts she believed she was entitled to the amounts and that some of it was spent on her son for things that he could not afford himself.
3. Mr Robert Alcock also provided evidence. He described building losses from the 2002/2003 financial year and stated that some of the accounting services he received were not of a high standard. There were some errors which may have affected the amount of his net taxable income for that period. He made few sales from his building business; one in 2003 and one in 2004, when he was building his own home at the same time. Of the little he earned, his spending was mainly for matters to assist with his son's condition. For example, he spent $8,000 (borrowed against the loan on his house) for a gymnasium for his son.
4. He also has a number of health problems and he is in very difficult financial circumstances. He took professional advice which he thinks was not the best advice at the time. He has a mortgage on his house of $710,000, which he believes he will have extreme difficulty in repaying.

1. I have taken account of all of the evidence presented by the applicant and the respondent in coming to a determination of the issues in this matter.
2. Social security payments are generally subject to the SS Act. The administration or general application of some aspects of the legislation is set out in the Social Security (Administration) Act 1999 (Cth) ("the SS Administration Act"). Some specific entitlements are set out in the FA Act and the administration or general method of application of provisions in that Act are specified in the FA Administration Act.
3. I make the following findings of fact:
   1. Mrs Alcock and her husband experienced a difficult and distressing period following their son's accident and which largely coincided with the period during which these debts were incurred.
   2. Mrs Alcock was overpaid $29,662.48 in Carer Payment for the period 7 March 2003 to 22 July 2008, owing to her failure to report her husband's income.
   3. Mrs Alcock was overpaid $8,872.86 in the Rent Assistance Component of the Family Tax Benefit payment ("FTB-RA") for the 2005/2006, 2006/2007 and 2007/2008 financial years.
   4. There is no record in Centrelink records that Mrs Alcock told Centrelink she was a homeowner.
   5. Mrs Alcock did not provide any (at times) or sufficient information about her husband's earnings to enable Centrelink to properly determine her entitlement to Carer Payment and FTB-RA.

Issue 1: Is there an overpayment of Carer Payment and/or FTB-RA?

1. The amounts in question relate to the period 1 July 2002 to 22 January 2008, as a previously identified overpayment from 23 January 2008 to 22 July 2008 was wholly attributable to an administrative error of Centrelink. Each of the two types of payments is set out separately below.

1. The relevant statutory provisions are contained in the FA Act as follows:
   • (a) Section 58(1) of the FA Act states the annual rate of FTB in any financial year is to be calculated in accordance with the Rate Calculator contained in Schedule 1 of the Act;
   • (b) Section 3 of the FA Act defines an 'ineligible homeowner' by reference to s 13 of the SS Act. That latter section relevantly defines that term, inter alia, as a 'homeowner'. The amount of FTBRA is calculated using the Rate Calculator in Schedule 1, but Clause 38C(1)(c) of the Schedule (previously Clause 13) states it is not applicable to an "ineligible homeowner".
2. The applicant concedes she has been a "homeowner" as defined at all relevant times. The consequences of those provisions, and the fact that Mrs Alcock is (and was) a homeowner at all relevant times, is that she was an ineligible homeowner and not entitled to FTB-RA. The amount paid is therefore an overpayment and the amount "is a debt due to the Commonwealth" by Mrs Alcock (s 71(1) of the FA Administration Act).
3. The amount of overpayment was set out earlier for three financial years 2005/06, 2006/07 and 2007/08 as being $8,872.86. The Tribunal was told the applicant has endeavoured to pay off the debts with respect to 2005/06 and 2007/08 years. At the date of the hearing, the debt was said to be substantially reduced to $3,655.36.

1. The relevant statutory provisions governing Carer Payment are contained in the SS Act. Section 23 specifies that Carer Payment is a 'social security payment'. Section 1223(1) provides that where a social security payment is made to a person who obtains the benefit of the payment and "was not entitled for any reason to obtain that benefit" (my emphasis), then the amount is a debt due to the Commonwealth.
2. The payment of Carer Payment was due to Mrs Alcock not advising Centrelink of her husband's income. It is undeniable that Mrs Alcock and her husband had quite exceptional stress and demands on their time and resources over the relevant period, largely due to the concern for and requirements of their seriously injured son. It has also been submitted that Mr Alcock's business dealings were seriously affected by economic conditions for part of that period However, the Tribunal must only have regard to the legal requirements in answering this issue.
3. In the first year of the overpayment Mr Alcock made a profit of $80,244, as revealed from his income tax return for 2002/2003. At the end of that financial year, Mr and Mrs Alcock purchased their home at Varsity Lakes, which the respondent submitted did not appear to be encumbered by a mortgage. It is apparent that there was money loaned by Mr and Mrs Alcock to their family trust. While s 1121 might allow a loan to be deducted under the assets test, it appears that the loan in this case does not reduce their total assets.
4. Mr Alcock also raised some issues about amounts in his tax returns which apparently related to a partner/former business partner. However, no documentary evidence was produced nor was any evidence provided from his accountant to corroborate that claim.
5. The records indicate only modest profits were made in the 2003/2004, 2004/2005 and 2005/2006 financial years. Mr Alcock's building business was conducted by a private trust in 2007 and the applicant and her husband made a loan to the trust of $499,531 in 2007/2008 year.
6. The real difficulty for the applicant with respect to Carer Payment is that, throughout the period under review, she had been advised by letter on a number of occasions of her obligation to advise Centrelink of her financial affairs and any relevant change in those affairs. She admitted that she did receive at least some of the letters tendered by the respondent but had not advised Centrelink of her husband's earnings. She had been reminded that the Centrelink calculation of her entitlement was on the basis of the combined income of between $120 and $140 per week.
7. This position was confirmed when Mr Hawker referred Mrs Alcock to her "Income and Assets Update" form, which Mrs Alcock admitted that she signed on 10 September 2007. In that form, she stated (at Question 26 and 30) that she and/or her partner did not own their home and did not have any interest in any real estate in Australia or outside Australia. That was clearly untrue.
8. The applicant does not dispute the amount of the debt raised in respect of Carer Payment.
9. The amount of the Carer Payment debt was determined by the Authorised Review Officer (ARO) on 23 September 2008, as amended by letter dated 26 September 2008.
10. The net overpayment was:

1. I find that $29,020.26 is the amount of the overpayment for Carer Payment.

Issue 2: Are any such overpayments debts due to the Commonwealth?

1. In accordance with the above reasoning, I find that there are debts due to the Commonwealth by Mrs Alcock as follows:
   1. FTB-RA

The net balance of $3,655.36 is a debt due to the Commonwealth by virtue of s 71(1) of the FA Administration Act.

The amount of $29,020.26 is a debt due to the Commonwealth by virtue of s 1223(1) of the SS Act.

Issue 3: Are all or part of the debts identified to be recovered? Are there any special circumstances to justify waiver or write off?

1. Recovery of overpayments is generally regarded as obligatory as public monies are involved and no legal authority exists for their retention by the person who received them.
2. This principle was laid down by the Privy Council in Auckland Harbour Board v The King [1924] AC 318. There, Viscount Haldane at [326 - 327] said:

For it has been a principle of the British Constitution now for more than two centuries ... that no money can be taken out of the consolidated Fund into which the revenues of the State have been paid, excepting under a distinct authorization from Parliament itself. The days are long gone by in which the Crown, or its servants, apart from Parliament, could give such an authorization or ratify an improper payment. Any payment out of the consolidated fund made without Parliamentary authority is simply illegal and ultra vires, and may be recovered by the Government if it can, as here, be traced.

1. This has been adopted into the law of Australia since responsible government was granted by the British Government (see for example cited in Pape v Commissioner of Taxation [2009] HCA 23 at [59]).
2. The statutory strengthening of the recovery provisions by the Commonwealth has been a progressive one and is made clear in the Explanatory Memorandum of various Amendment Acts (see for example Family and Community Services and Veterans' Affairs Legislation Amendment (Debt Recovery) Act 2001 (Cth)). The statutory provisions relating to recovery under the social security law is virtually a code of the relevant requirements.
3. The relevant statutory provisions relating to 'write off' or 'waiver' of the two debt categories mentioned above are set out below:

1. The relevant provisions of the FA Administration Act are s 97 (administrative error) and s 101 (special circumstances):

97 Waiver of debt arising from error

(1) The Secretary must waive the right to recover the proportion (the administrative error proportion) of a debt that is attributable solely to an administrative error made by the Commonwealth if subsection (2) or (3) applies to that proportion of the debt.

(2) The Secretary must waive the administrative error proportion of a debt if:

(a) the debtor received in good faith the payment or payments that gave rise to the administrative error proportion of the debt; and

(b) the person would suffer severe financial hardship if it were not waived.

...

101 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 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.

1. The relevant provisions of the SS Act are s 1236, s 1237A(1) and s 1237AAD:

1236 Secretary may write off debt

(1) Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.

(1A) The Secretary may decide to write off a debt under subsection (1) if, and only if:

(a) the debt is irrecoverable at law; or

(b) the debtor has no capacity to repay the debt; or

(c) the debtor's whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or

(d) it is not cost effective for the Commonwealth to take action to recover the debt.

1237A Waiver of debt arising from error

Administrative error

(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.

Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).

...

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, the Administration Act or the 1947 Act; and

(b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and

(c) it is more appropriate to waive than to write off the debt or part of the debt.

Note 1: Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth.

Note 2: This section has effect subject to section 1237AAE in relation to an assurance of support debt.

1. The provisions set out above under both statutes are very similar in wording and in effect. The first issue is whether there should be a waiver of the whole or part of either debt. Alternatively, if waiver is not appropriate, the second issue is whether write off is an option which is available to the applicant.

Waiver in cases of administrative error - s 97 FA Administration Act and s 1237A(1) SS Act

1. Under s 97 of the FA Administration Act and s 1237A(1) of the SS Act, a debt may be waived where it is attributable solely to an administrative error of the Commonwealth and the debtor received the payment or payments in good faith.
2. In this case, both the FTB-RA and Carer Payment amounts were calculated based on the information provided by Mrs Alcock. She was provided with multiple notices from Centrelink over the years about her obligations to report income and assets. She concedes those facts. Mrs Alcock submitted that the demands of caring for her son were her priority and, in effect, she merely thought Centrelink would be sensitive to her entitlement at all times. Mr Alcock submitted the accounting information he relied upon was not always efficacious.
3. In Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190; (2003) 132 FCR 126, Selway J said a debt arising "solely" because of administrative error means "... the only cause that objectively can be ascribed to the relevant debt is an administrative error" (at [35]). The evidence is clear that the overpayments of FTB-RA and Carer Payment did not occur "solely" due to the administrative error of the Commonwealth (Moir and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 48).
4. Waiver is therefore not appropriate under either s 97 of the FA Administration or s 1237A of the Act.

Waiver in special circumstances - s 101 FA Administration Act and s 1237AAD SS Act

1. Section 101 of the FA Administration Act and s 1237AAD of the SS Act (outlined earlier) both essentially provide that the Secretary may waive the right to recover a debt (wholly or partly) where:
   • (a) the debt is not due to the applicant "knowingly" making a false statement or a false representation; 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.
2. There is evidence of the applicant making a false statement (Income and Assets Update signed by applicant on 10 September 2007). The issue is whether that false statement was made "knowingly". In this regard, I was referred to the decision of Deputy President Forgie in Clifford and June Callaghan and Secretary, Department of Social Security [1996] AATA 413.
3. In Callaghan Deputy President Forgie found, in circumstances similar to this case, that where the applicant had received notices, read at least one of them and knew of the obligation to advise certain information, a failure to advise of circumstances set out in the letter/notice showed an applicant "knowingly" omitted to satisfy a provision of the social security legislation.
4. In that case, reference was also made to Hooi v Brophy (1984) 52 ALR 710, where an earlier English case of Taylor's Central Garages (Extra) Ltd v Roper [1951] WN (Eng) 383 was cited (at 385). In that latter case, Devlin J referred to three degrees of knowledge: actual knowledge, "shutting his eyes to any obvious means of knowledge" and constructive knowledge (the information a person knows or ought to have known).
5. Recently in Stewart v White [2011] QCA 291, Muir J (with whom the other judges agreed), said there could be a finding of being "knowingly" concerned with a contravention of the law where the facts show the contravention was "an inevitable consequence" of a finding that a person did not have "reasonable grounds" for making a representation which he or she made (at [41]).
6. The evidence in this case shows a pattern of ignoring the administrative requirements of Centrelink over a number of years as little regard was paid to those requirements by Mrs Alcock. That is not to dismiss the emotional distress of a mother who had a significant burden of oversight of her son, who was incapacitated for some years. However, Mrs Alcock had some support around her over that period of time and I find that there were not "reasonable grounds" for making the representation she did; alternatively, she did in any event, "turn a blind eye" (deliberately or negligently) to what she knew or must have suspected as being the requirements for ongoing entitlements to social security payments.
7. I therefore find Mrs Alcock "knowingly" (in a technical legal sense) made a false statement and therefore failed to comply with the requirement to report income and assets under the SS Administration Act.
8. While that finding effectively prevents the Secretary waiving the debt under the two provisions above, I will have regard to whether there are "special circumstances (other than financial hardship alone)". This requires, as submitted by the respondent, circumstances which are "unusual uncommon or exceptional" (Re Beadle and Director General of Social Security (1984) 6 ALD 1). The Federal Court in Angelakos and Secretary, Department of Employment and Workplace Relations [2007] FCA 25 said, at [33], that that risk of ensuring some judicial comments are not overstated is minimised if the words "unusual" or "uncommon" are emphasised. There will be no injustice or unfairness on an applicant where the same is "not visited or potentially visited, upon all other recipients of social security payments under the Act" (Re Timothy Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114 at [80]).
9. I find that Mr and Mrs Alcock had "unusual, uncommon or exceptional" circumstances with the stress of dealing with her son's condition and concern for his future. It was "uncommon" etc because that is not a common hardship for persons facing recovery of overpayments of social security benefits. She also had a middle ear problem which caused paralysis in her face and needed an injection to keep her eye open. Mrs Alcock told the Tribunal that the strain on her health and body is not as bad now as she is no longer a Carer.
10. Those circumstances should not be underestimated as to the impact they would have over a number of years on both Mr and Mrs Alcock and their daughter (who as I understand it, was then in high school). Those circumstances can affect physical health, relationships and mental health. It is apparent Mr Alcock has also borne a significant burden on his health and self-esteem in having to cope with business difficulties and harsh economic conditions. He told the Tribunal he expects he will lose his house as a result of the combined effect of their life circumstances.
11. I must make a determination according to law, taking account of all relevant factors and the scope of the meaning of legislative provisions. It seems to me that while Mrs Alcock has had the support of Mr Alcock in these difficult times, they both have had difficult and extenuating circumstances. There were financial difficulties, but "special circumstances" cannot be based on financial hardship alone. However, the extreme nature of their son's disability must have been all consuming, particularly in the earlier years when the constancy of the attention required and the concomitant high level of anxiety which would undoubtedly accompany those circumstances must be regarded as "special circumstances". Few people would be exposed to the constancy and intensity of those circumstances. This coincided with the period where the overpayments commenced.
12. I find there are "special circumstances" in this case. However, as I have found as a matter of law, that the applicant "knowingly" made false statements, the finding on this element cannot assist the applicant in her obligation to repay the debt.

1. Write off under s 1236(1A) is also available for consideration. The two relevant considerations here are whether the debt is irrecoverable at law or the debtor has no capacity to repay the debt.
2. This option is available where waiver is not appropriate. It is a mechanism which allows some time for "recovery" of an applicant's circumstances, including their financial and business capacity (see the Full Federal Court decision in Lee v Secretary, Department of Social Security (1996) 68 FCR 491). "Recovery" of an overpayment, be it a commercial debt or a social security debt can, in some circumstances, result in crushing a person's motivation and therefore capacity to repay a debt.
3. The debt is clearly recoverable at law. As to whether the applicant has a capacity to repay the debt, it must be recognised that Mr and Mrs Alcock have had and will undoubtedly continue to have difficult times from a financial viewpoint. They are trying to recover their lives since the death of their son. In recent years they have demonstrated their honesty and repaid approximately 60% of the FTB-RA debt. However, the applicant was not fully frank with Centrelink over most of the period with respect of her receipt of Carer Payment. From the evidence of Mr Alcock, their financial position is precarious.
4. I believe write off of the Carer Payment debt is appropriate in these circumstances. The SSAT has already adopted that approach and wrote off the debts for six months until 20 October 2009. At the hearing in this Tribunal, Mr Alcock provided evidence that his mortgage may result in his bankruptcy. Given a lengthy period of additional cost and difficult circumstances for the applicant and her husband during the period between their son's accident and his death, together with the difficult business conditions over the past few years, the applicant and her husband have not recovered financially and their principal residence is vulnerable. Counterbalancing this, Mrs Alcock now has a part-time job earning $569 per week, a position which she commenced on 1 March 2011.
5. It seems to me that to force the applicant and her husband into bankruptcy would serve no proper purpose and any degree of culpability in this case would not justify such a course. In all the circumstances, and given that Mrs Alcock has been repaying the FTB-RA debt, I think no order should be made about that debt and that it should continue to be repaid by the applicant. However, in respect of the Carer Payment debt, the applicant should be given a further period of six months during which the Carer Payment debt should be written off, and should be reviewed on 1 May 2012. The Secretary can then exercise any further discretion in respect of those debts.

1. The applicant's debt in respect of Carer Payment (but not in respect of the balance of FTB-RA) is to be written off until 30 April 2012 after which it should then be recoverable. The Secretary can undoubtedly review the debt after that date and exercise any discretion which may then be appropriate.
2. The decisions under review in respect of both debts are therefore affirmed. Subject to that decision, the debt in respect of Carer Payment is written off until 30 April 2012.

I certify that the 67 preceding paragraphs are a true copy of the reasons for the decision herein of Dr K S Levy RFD, Senior Member

Signed: ...................[Sgd]........................................................

Solicitor for the Respondent Matt Hawker, Sparke Helmore