Angelakos v Secretary, Department of Employment & Workplace Relations [2009] AATA 858 | Case summary | Zoe

CTHAATA

Angelakos v Secretary, Department of Employment & Workplace Relations

[2009] AATA 858

Administrative Appeals Tribunal of Australia|2009-10-08

At a glance

AI case summary

Result

respondent. The Tribunal affirms the decision under review: the income maintenance period applies from 7 November 2008; the Applicant was not in severe financial hardship through unavoidable or reasonable...

Key principles

An income maintenance period (IMP) under ss 1068-G7AH to 1068-G7AR applies from the date the termination payment is paid, and for members of a couple payments are combined to...
The Secretary's discretion under s 1068-G7AM to reduce or not apply an IMP can only be exercised if the claimant is in 'severe financial hardship' as defined in s 19C(3), and...
Voluntary repayment of credit card debt does not constitute 'unavoidable or reasonable expenditure' for the purposes of s 19C(4), and therefore such repayments do not, by...
Where an overpayment (debt) arises solely from administrative error by Centrelink, the waiver provision in s 1237A applies and it is appropriate for the Secretary to waive...

Issues before the court

Whether an income maintenance period (IMP) applies to the Applicant and, if so, when it starts and for what duration.
Whether the IMP should be reduced or not apply because the Applicant was in 'severe financial hardship' caused by 'unavoidable or reasonable...

Plain English Summary

The Tribunal held that the income maintenance period (IMP) generated by the Applicant's termination payment(s) began on 7 November 2008 and that the statutory discretion to reduce the IMP could not be exercised because the Applicant was not shown to be in 'severe financial hardship' caused by 'unavoidable or reasonable expenditure'. The Tribunal treated the Applicant's voluntary repayment of credit card debt as not meeting the statutory threshold. The Tribunal also noted that any overpayment attributable solely to Centrelink error should be waived and the Respondent indicated it would not seek recovery. The AAT affirmed the decision under review.

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Deep Dive

1,927 words · generated 30/08/2026

What happened

The Applicant, Patrick Wainwright, and his partner ceased employment in October–November 2008 and received termination/redundancy payments: the Applicant $2,327.88 (termination payment on 7 November 2008) and his partner $30,584.15 (redundancy on 10 October 2008). The combined cash received by the couple was $32,912.03 (Background; Findings 1).

The statutory framework: ss 1068-G7AH to 1068-G7AR treat certain termination payments as income for a period (the IMP), with the IMP commencing on the day the termination payment is paid (see 1068-G7AH and 1068-G7AKA). For redundancy or leave payments the Act prescribes how the period is calculated and how amounts are apportioned across fortnights (Considerations 1–2). The Tribunal applied those provisions to the Applicant's termination and redundancy payments and held that the IMP commenced on the date of the Applicant's termination payment (Findings 2).
Discretion to reduce IMP is statutory and conditional: Section 1068-G7AM permits the Secretary to determine that all or part of an IMP does not apply, but only if the person is in 'severe financial hardship' because of 'unavoidable or reasonable expenditure' incurred while the IMP applies. The Tribunal emphasised that this is a conjunctive, statutory requirement: both severe financial hardship and causation by unavoidable/ reasonable expenditure must be shown (Considerations 3).
The statutory definitions are restrictive: 'Severe financial hardship' for a member of a couple is defined by reference to the couple's liquid assets being less than twice the fortnightly maximum payment rate (s 19C(3)(f)-(g)), and 'unavoidable or reasonable expenditure' is specifically defined in s 19C(4) with a closed list and with an express exclusion of other reasonable costs of living apart from paragraph (a) (Considerations 3). The Tribunal recognised that the Act intends that claimants use termination payments to support themselves in lieu of Centrelink benefits for the period to which the payment relates.
Voluntary repayments do not meet the statutory test: The Tribunal relied on prior Tribunal authority (Arena) and applied the statutory wording to hold that voluntary repayment of a credit facility is not an 'unavoidable or reasonable expenditure' within s 19C(4). Accordingly, the Applicant's lump-sum payment to clear a credit card debt did not satisfy the condition for waiver of the IMP (Considerations 3; Findings 5–6).
Waiver of debts caused by administrative error: On the separate issue of overpayments, the Tribunal noted that s 1237A requires waiver of the proportion of debt attributable solely to administrative error where the recipient received the payments in good faith. Because Centrelink had conceded that any payment to which the Applicant was not entitled was due solely to Centrelink error, the Tribunal observed that waiver would be appropriate and recorded the Respondent's intention not to pursue recovery (Conclusion 4).

Degree of voluntariness vs necessity: Wainwright treats repayment of a high-rate credit card as voluntary. A closer fact pattern where failure to repay would produce immediate, unavoidable consequences (repossession of an essential asset, bailiff action that would deprive housing) might challenge this conclusion, the decision leaves open how proximate and unavoidable consequences must be to transform a repayment from voluntary to 'unavoidable or reasonable expenditure' under s 19C(4). The Tribunal cites Arena and Re Davy but the boundary remains fact-specific (Considerations 3, 5).
Quantification of liquid assets and 'twice the fortnightly maximum': The Tribunal noted that some allowances are generous (Considerations 4) and accepted the SSAT's calculation of unavoidable expenses. The judgment does not produce a mathematical template for borderline cases where liquid assets hover near the statutory threshold; practitioners will still need careful arithmetic and case-specific evidence to show the s 19C(3) numerical test is met.
Interaction between waiver under s 1237A and broader 'special circumstances' waiver under s 1237AAD: Wainwright records that waiver under s 1237A applies where the debt is solely attributable to administrative error and that the Respondent waived recovery in these circumstances (Conclusion 4). But questions remain about cases where error is mixed (part administrative error, part claimant error) or where 'special circumstances' (s 1237AAD) potentially justify waiver even absent sole administrative error; the decision reviews authorities but does not offer new bright-line rules (Considerations 4–5).
The role of context and 'unusual' features: The Tribunal repeats the established authorities that 'special circumstances' require features distinguishing the case from the ordinary (Considerations 4–5). How unusual or uncommon a circumstance must be remains a matter of judicial assessment tied to facts. Wainwright reaffirms the qualitative test without narrowing its application.
Treatment of lump-sum use for family members' needs: The decision revolves around the Applicant's own repayment choice. If a lump sum were spent on immediate, essential needs of dependent family members (medical emergency, essential relocation to maintain employment), Wainwright does not directly decide whether such expenditures would be 'unavoidable or reasonable' but the statutory text in s 19C(4) suggests some items are covered and others excluded; the boundaries would be litigated on facts.

Judgment (19 paragraphs)

[1]

The Applicant is a 38 year old man, who lives as a member of a couple with his partner and two children (recorded with Centrelink as dependents of his partner) in rented accommodation. The Applicant was educated to a year 9 level. He subsequently completed the equivalent of year 10 and worked as a dye-setter. He worked for Seeley International Pty Ltd in Adelaide until a personal decision to re-locate to Melbourne. There was no dispute that the Applicant is a member of a couple.
There was no dispute that on 7 November 2008 he ceased employment and received termination payments totalling $2,327.88. There was no dispute that his partner ceased her employment on 10 October 2008, receiving a redundancy payment of $30,584.15. The couple received a total of $32,912.03. At the time he lodged the claim, their savings totalled $866.91. There was no dispute as to the relationship of this amount to the maximum payment rate of NSA on 19 January 2009.
The Applicant used $6,463.03 of the $32,912.03 to pay out a GE CreditLine Card (a credit card on which there was 27 per cent interest charges) for personal reasons. Other expenditure included travel, relocation costs and computer costs.
As a consequence of the several Centrelink decisions summarised above, the IMP was shortened to 15 March 2009 (as per T- p82) and Centrelink commenced NSA payments prior to the SSAT hearing.

[2]

The Applicant's case is that he is in difficult financial circumstances. He considers he and his wife are being penalised. His written application to the Tribunal included the following: I feel the decision was a personal attack on me and my family.

[3]

The Respondent's case is that the IMP was correctly imposed by the first Centrelink decision, as mandated by legislation and is appropriate in the circumstances. Centrelink incorrectly applied a test for liquid assets waiting period rather than an IMP. The Respondent conceded that the payments received by the Applicant (to which he was not entitled) were due solely to Centrelink's error. Consequently, the Commonwealth would not attempt to recover any such overpayment.
Whilst an IMP may be altered, for this to occur the decision-maker has to be satisfied the Applicant is in severe financial hardship. Additionally, the severe financial hardship must have been caused by unavoidable and reasonable expenditure. The Respondent did not challenge the amount identified by the SSAT as being unavoidable or reasonable. However, the Respondent submitted that there remained a substantial difference between these expenses and the combined termination payments available to the Applicant. The Respondent further submitted that Centrelink should not have applied the waiver provision, and that it incorrectly reduced the IMP.

[4]

(1)...

liquid assets, in relation to a person, means the person's cash and readily realisable assets, and includes:

...

(b) amounts deposited with, ..., a bank ... by the person (whether or not the amount can be withdrawn or repaid immediately);....

...

(2)... a person's liquid assets are to be taken to include:

(a) the liquid assets of the person's partner; and

(b) the liquid assets of the person and the person's partner.

Section 19C of the Act defines severe financial hardship for a person who is a member of a couple:

(3) A member of a couple who makes a claim for ... :

(a) newstart allowance;

...

is in severe financial hardship if the value of the couple's liquid assets ... is less than twice the fortnightly amount at the maximum payment rate of the ... allowance that would be payable to the person:

(f) if the person's claim were granted; and

(g) in the case of a person to whom an income maintenance period applies, if that period did not apply.

...

(4) Unavoidable or reasonable expenditure, in relation to ... a person to whom an income maintenance period applies, ..., includes, but is not limited to, the following expenditure:

(a) the reasonable costs of living that the person is taken, under subsection (6) or (7), to have incurred in respect of:

...

(iii) if an income maintenance period applies to the person - that part of the period that has already applied to the person;

(b) the costs of repairs to, or replacement of, essential whitegoods situated in the person's home;

...

[5]

Sections 1068-G7AH to1068-G7AR of the Act set out the provisions relating to the IMP. In summary, they detail how various types of received employee payments are considered as ordinary income and contribute to an IMP. Sections relevant here are:

[6]

Certain termination payments taken to be ordinary income

1068-G7AH

If:

(a) a person's employment has been terminated; and

(b) the person receives a termination payment (whether as a lump sum payment...);

the person is taken to have received ordinary income for a period (the income maintenance period) equal to the period to which the payment relates.

...

Start of income maintenance period - employment terminated

1068-G7AKA ... the income maintenance period starts, ..., on the day the person is paid the termination payment.

...

Leave payments or termination payments in respect of periods longer than a fortnight

1068-G7AL Subject to points 1068-G7AA to 1068-G7AE (inclusive), if:

(a) a person receives a leave payment or termination payment; and

(b) the payment is in respect of a period greater than a fortnight;

the person is taken to receive in a payment fortnight or part of a payment fortnight an amount calculated by:

(c) dividing the amount received by the number of days in the period to which the payment relates (the daily rate); and

(d) multiplying the daily rate by the number of days in the payment fortnight that are also in the period.

...

1068-G7AM If the Secretary is satisfied that a person is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure while an income maintenance period applies to the person, the Secretary may determine that the whole, or any part, of the period does not apply to the person.

...

Single payment in respect of different kinds of termination payments

[7]

The IMP provisions are set out in s 1068-G7AH to s 1068-G7AR of the Act. Social security claimants who have received particular types of payment are taken to have received income in assessing their claim entitlements according to the Act. Such claimants are expected to use such payments to support themselves before being paid the full rate of NSA. Since 20 September 1997, lump sum leave payments received on termination of employment are considered income. Redundancy payments received after 20 September 2006 are included in the IMP. There is no maximum length of an IMP.
The IMP is determined from the date a person is paid the leave entitlement. Payments for members of a couple are combined. For leave payments, the calculation is made by dividing the amount received by the number of days in the leave period for that payment. This is the determined daily rate. The determined daily rate is then multiplied by the number of days in the payment fortnight that are also in the period of leave. For redundancy payments, the number of weeks is determined by dividing the redundancy payment by the relevant weekly wage and then rounding down this figure to a whole number using a five day working week.
Section 1068-G7AM of the Act allows for the whole or a part of an IMP not to apply to a claimant. This discretion can only be exercised if the claimant is in severe financial hardship (as defined in s 19C(3)(a) of the Act) through unavoidable or reasonable expenditure (as defined in s 19C(4) of the Act) during the IMP. In Arena and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2008] AATA 494 the Tribunal held that voluntary re-payments of a loan facility did not constitute unavoidable or reasonable expenditure in the context of the Act, the object of which is to provide social security. To be considered to be in severe financial hardship a person living as a member of a couple must have liquid assets less than twice the customer's fortnightly maximum payment rate. Section 14A(1)(b) defines liquid assets as including amounts deposited with a bank. Section 14A(2)(b) provides that the liquid assets include those held jointly with a partner.

[8]

...an expression such as "special circumstances" is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional.

[9]

The Tribunal highlighted the context in which [the circumstances] occur. The Full Federal Court considered the Tribunal's decision in Beadle in Beadle v Director-General of Social Security [1984] AATA 176; (1985) 60 ALR 225 and did not subsequently endorse the words unusual, uncommon or exceptional.

[10]

Kiefel J in Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541 considered that:

[11]

..."special circumstances", ... would require something to distinguish Mr Groth's case from others, to take it out of the usual or ordinary case. ... It would ... follow that if ... something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.

[12]

Besanko J in Angelakos v Secretary, Department of Employment & Workplace Relations [2007] FCA 25; (2007) 100 ALD 9 stated at [33] that:

[13]

... the test will be overstated if the word "exceptional" is emphasised... less risk of overstatement if the words "unusual" or "uncommon" are emphasised...there must be something that distinguishes the case from the ordinary or usual case...close attention must be given to the...context.

[14]

Hill J in Dranichnikov v Centrelink [2003] FCAFC 133; (2003) 75 ALD 134 at [66] stated that ...To some extent the question whether there were special circumstances must depend on how it came about that the error occurred. In Re Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114; (2007) 94 ALD 693 the Tribunal stated that it is not appropriate for a person to exhaust a compensation lump sum payment in a short time in the expectation the taxpayer will then provide extra support.

[15]

The Applicant is a member of a couple living in rented accommodation. He received $2,327.88 in termination payments from Seeley International Pty Ltd for work which ceased on 7 November 2008. His partner received redundancy payments of $30,584.15. Both payments come within s 1068 G7AH of the Act.
The Applicant's IMP commences on 7 November 2008, the date of his unemployment.
The Applicant lodged a claim for NSA on 19 January 2009.
The Applicant's liquid assets at the date of the claim were $866.91. The Tribunal notes that some allowances for deductions are generous.
The Applicant's voluntary payment of credit card debt is not unavoidable or reasonable expenditure.
Therefore, the Applicant is not in severe financial hardship (as defined in s 19C(3) of the Act) through unavoidable or reasonable expenditure (as defined in s 19C(4) of the Act).

[16]

The determined IMP is from 7 November 2008.
The Applicant was not in severe financial hardship at the date of lodgement of the claim for NSA, so the discretion in s 1068-G7AM cannot be exercised to reduce the IMP.
The Tribunal concludes that the Applicant did not satisfy the requirements necessary to allow for reduction of the IMP.
Payments received by the Applicant to which he was not entitled occurred through decisions of Centrelink officers. The Applicant would have a strong case to seek waiver of any attempt at debt recovery by the Commonwealth due to sole error by the Commonwealth, and should not be required to make such a case. The Tribunal notes the intention of the Respondent not to pursue any such debt recovery. The Tribunal considers this to be prudent and correct in the circumstances.
In the circumstances, it is best that the SSAT decision remains undisturbed, as the SSAT decision sent the matter back to the Chief Executive Officer of Centrelink to recalculate the IMP.

[17]

Accordingly, the Tribunal affirms the decision under review.

[18]

I certify that the thirty-four [34] preceding paragraphs are a true copy of the reasons for the decision of:

[19]

Advocate for the Respondent: Mr P. Carson, Centrelink Legal Services & Procurement Branch

Angelakos v Secretary, Department of Employment & Workplace Relations

At a glance

Result

Key principles

Issues before the court

Plain English Summary

Deep Dive

What happened

Cited legislation

Why the court decided this way

Before and after state of the law

Key passages with plain-English translation

What fact patterns trigger this precedent

How later courts have treated it

Still-open questions

Judgment (19 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (11)

Wainwright and Secretary, Department of Education, Employment and Workplace Relations [2009] AATA 858 (8 October 2009)

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