SOCIAL SECURITY - Parenting Payment - overpayment - debt recovery - waiver - sole administrative error - special circumstances.

Social Security Act (1991) - ss 950, 1223, 1224, 1236, 1237A, 1237AAD.

1. This is an application for a review by Ms Margaret Backhouse, ("the Applicant"), of a decision of the Social Security Appeals Tribunal ("the SSAT") made on 31 March 1999 that Ms Backhouse owed a debt to the Commonwealth arising out of an overpayment of Parenting Payment from 25 June 1998 to 10 December 1998 but that the portion of the debt incurred from 25 June 1998 to 16 July 1998 be waived under subsection 1237A(1) of the Social Security Act (1991). The SSAT's decision set aside a decision made on 18 January 1999 by an Authorised Review Officer of the Department ("ARO") that a debt of $2950.00 existed for overpayment of Parenting Payment between 25 June 1998 and 10 December 1998 and should be recovered (T17). The ARO's decision affirmed the decision of a delegate of the Secretary of the Department of Family and Community Services made on 10 December 1998 (T15) although the quantum of the debt differed slightly from that referred to by the ARO.

2. A hearing was held before the Administrative Appeals Tribunal ("the Tribunal") in Sydney on 27 October 1999. Ms Backhouse represented herself and provided oral evidence. The Respondent, the Secretary, Department Family and Community Services ("the Department") was represented by Mr J Kenny, Departmental Advocate. The Tribunal took into evidence documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act (1975) and the following exhibits:

Exhibit No A1 A2 A3 R1 R2 Description Letter from Dr M Crockett, General Practitioner, concerning Ms Backhouse Bone density report in relation to Ms Backhouse from Ultrascan Radiology Cost of Living Report by Ms S Saker, Financial Counsellor, Moneycare Counselling Service, Salvation Army Respondent's Statement of Facts and Contentions Departmental computer record - "Earnings From Employment" for Ms M Backhouse Date 30 July 1999 31 July 1999 30 September 1999 9 August 1999 6 August 1999

3. The SSAT's decision is not disputed in relation to the proportion of the debt in overpayment of Parenting Payment being waived for the period 25 June 1998 to 16 July 1998.

* Whether or not there is a debt due to the Commonwealth arising out of an overpayment of Parenting Payment to Ms Backhouse for the period 17 July 1998 to 10 December 1998; and if so

5. A determination in this matter involves consideration of the provisions of the Social Security Act (1991) ("the Act").

6. Section 506D(1) of the Act deals with notices given to recipients of Parenting Payment and as relevant provides:

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

506D(1) The Secretary may give a person to whom parenting payment is being paid a notice that requires the person to inform the Department if

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

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

7. Section 1223 of the Act deals with debts due to the Commonwealth arising out of payments made to a recipient which were not payable. As relevant, section 1223 states:

"1223 Debts arising under this Act and the 1947 Act

Recipient not qualified for payment or amount not payable

1223(1) Subject to subsections (1A) and (1B), if an amount has been paid to a person by way of social security payment on or after 1 October 1997 and:

(a) the recipient was not qualified for the social security payment when it was granted; or

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

Non-recovery of maternity allowance if lack of qualification results from event or change in circumstances occurring after making of payment or from incorrect estimate of income component made in good faith...

(a) an amount has been paid to a person by way of an instalment of a social security payment; and

(b) another amount (the later amount) is paid to a person in respect of the same instalment; and

(c) the later amount is not a payment of arrears; and

(d) the later amount would not otherwise be a debt due to the Commonwealth;

the later amount is a debt due to the Commonwealth.

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

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

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

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

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

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

Note: For the date of effect of a determination to take account of an amendment of assessable income, see section 890.

Family allowance recoverable after end of tax year

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

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

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

Note: a person's taxable income is defined in point 1070-D11. A person's taxable income may increase, amongst other reasons, because the person underestimated his or her taxable income and the Commissioner of Taxation has made a subsequent assessment of the person's taxable income.

(a) an amount (the received amount) has been paid to a person by way of social security payment on or after 1 October 1997; and

(b) because the received amount had not been correctly calculated using the relevant rate calculator, or for any other reason, the received amount is greater than the amount (the correct amount) of social security payment that should have been paid to the person under this Act;

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

8. Section 1224 of the Act also deals with debts but refers to debts which have arisen because of a failure to notify the Department of certain information and as relevant section 1224 provides:

(a) an amount has been paid to a recipient by way of social security payment; and

(b) the amount was paid because the recipient or another person:

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

(ii) failed or omitted to comply with a provision of this Act or the 1947 Act;

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

9. Section 1236 of the Act deals with the right off of debts and as relevant states:

"1236(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.

1236(1A) The Secretary may decide to write off a debt under subsection (1) if, and only if:

(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) the debtor is not receiving a social security payment under this Act and it is not cost effective for the Commonwealth to take action to recover the debt.

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

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

11. Section 1237A deals with sole departmental administrative error and the issue of waiver and states:

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

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

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

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

12. Section 1237AAD of the Act deals with waiver under special circumstances and states:

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

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

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

(ii) failing or omitting to comply with a provision of this Act or the 1947 Act; and

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

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

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

13. The following information is provided by way of background. The information contained within is not in dispute.

* Ms Margaret Backhouse was born on 30 July 1955 and attended high school to the equivalent of Year Nine. Ms Backhouse was approximately 15 years old when she left school.

* Following secondary school, Ms Backhouse attended a typing course for approximately one and a half years. Ms Backhouse later was employed in the 1970's for approximately 16 years undertaking office/ clerical/ reception work. Ms Backhouse ceased employment three weeks prior to the birth of her son Kane, born on 2 January 1987 now aged 13 years. Her second son, Luke, was born on 18 July 1988.

* Ms Backhouse never married and has been raising the boys alone. The boys' father left soon after Luke was born. Ms Backhouse believes that the boys' father is in jail and had been involved with illegal drug activities for years. The boys have no contact with their father and have never received any financial assistance from him.

* Kane attends high school and Luke, at the time of hearing, was attending primary school.

* Approximately four years ago, Ms Backhouse took up employment at the High Street Child Care Centre, Penrith, working five days per week, 9:00am to 2:30pm. Ms Backhouse took up this position but had not undertaken any formal child care training. While Ms Backhouse worked, the children were collected from school by an after-care assistant who then took the boys to their grandparents. Ms Backhouse paid the carer $15 per week from 12 June 1998.

* On 2 April 1998, Ms Backhouse commenced receipt of Parenting Payment of $187.80 per fortnight, based on an income at that time of $12,802.46. Mr Kenny advised at the hearing that the actual income was $11,762.40.

* In a "Parenting Payment review - for sole parents", completed on 22 June 1998, Ms Backhouse indicated that for the past 12 weeks she had been employed on a permanent part time basis at the High Street Preschool, Penrith, earning $411.95 gross. There was nothing recorded by Ms Backhouse on this form as to the period during which she received these earnings nor was there any indication as to whether the earnings were received on a weekly or fortnightly basis (T4, p16).

* A Departmental computer print out recorded that Ms Backhouse's earnings as at 24 June 1998 were $411.95 per fortnight (T5). Parenting Payment was then assessed on Ms Backhouse's annual earnings of $10,710.70 and on 2 July 1998, Ms Backhouse was informed by Centrelink that her fortnightly Parenting Payment would be $208.00 commencing on 9 July 1998 (T6).

* Ms Backhouse received further review forms in relation to Parenting Payment and on 21 July 1998, Ms Backhouse declared at Question 9 that for the past 12 weeks she had worked at the High Street Preschool, Penrith. Again Ms Backhouse did not record the specific period during which she had earned $411.95 nor did she detail whether or not these earnings were weekly or fortnightly amounts (T7).

* As a result of Ms Backhouse's various Parenting Payment Review forms, Centrelink recorded that there were no changes to Ms Backhouse's circumstances and Parenting Payment continued at the same rate (T8).

* A further Departmental review form was completed by Ms Backhouse on 14 September 1998. Ms Backhouse again recorded that she was working at the High Street Preschool, Penrith, but did not specify any date on this occasion for her gross earnings of $411.95. Ms Backhouse also did not record whether these earnings were received on a fortnightly or weekly basis (T9). This information was duly noted by Centrelink on 14 September 1998 (T10).

* On 12 September 1998, a Departmental letter was sent to Ms Backhouse informing her that from 1 October 1998 she would be receiving a Parenting Payment of $210.70 per fortnight based on her total annual income of $11,750.76 (with earnings of $10,710.70). (T11)

* On 7 December 1998, in a Parenting Payment review form, Ms Backhouse indicated she was still employed at the High Street Preschool, Penrith, but again did not detail any dates as to her earnings of $411.95 nor did Ms Backhouse record whether these earnings were received on a fortnightly or weekly basis (T12). Attached to Ms Backhouse's review form was a handwritten letter of 7 December 1998, from the Director of the High Street Preschool, indicating that Ms Backhouse earned $411.95 gross per week (T13).

* A Departmental Officer confirmed with the Director of the preschool that the exact amount of Ms Backhouse's weekly earnings was $411.95. A Departmental delegate then recommended that an overpayment of Parenting Payment be raised based on Ms Backhouse earning $411.95 per week rather than on a fortnightly basis, which the Department had incorrectly been utilising to calculate Ms Backhouse's entitlement to Parenting Payment. This overpayment occurred during the period 25 June 1998 to 10 December 1998 (T14).

* On 10 December 1998, a debt of $2,650 was raised (T15, p55).

* On 18 January 1999, an ARO confirmed there was a debt in the amount of $2,950 owed by Ms Backhouse to the Commonwealth and that there were no grounds to waive this debt. The ARO wrote:

"...I accept that office error played a major role in this overpayment however your failure to reply to the correspondence of 2/7/98 and 22/9/98 was a contributory factor and as you were advised the income upon which your PPS was being paid and as you made no contact to query or correct this income I can not accept that you received the overpayment in good faith as it is defined by the Act." (T17, p59)

* On 8 February 1999, an application for review by Ms Backhouse was lodged with the SSAT. Ms Backhouse wrote:

"I believe the decision is incorrect because I notified Centrelink of my change in wages. I even supplied them with a letter from my employer stating my wages. The Sole Parent review form was filled in correct with 'weekly' wages marked.

Centrelink confessed they updated my earnings incorrectly from the start. I did get a bit confused with my account as it is used for deducting my bills from. I have tried very hard to keep a roof over my boys head, one we can call our own. I am not even eligible for rent assistance because we are paying a mortgage. I think the government just hates the thought of a single mother owning her own home." (T19)

* On 31 March 1999, the SSAT decided that Ms Backhouse owed a debt to the Commonwealth raised under subsection 1224(1) of the Act because she did not comply with notices to her to inform the Department of her correct earnings. The SSAT also determined that a debt was raised under subsection 1223(5) of the Act prior to 16 July 1998. The SSAT decided that prior to Departmental notices to Ms Backhouse of 2 July 1998, Ms Backhouse had no way of knowing that she was being paid Parenting Payment incorrectly and that therefore she had received this benefit in good faith. Therefore the SSAT determined to waive a proportion of the debt from 25 June 1998 up to 17 July 1998 under section 1237A of the Act because of the Department's sole administrative error (T2).

* Ms Backhouse appealed to the Tribunal against the decision of the SSAT and on 7 May 1999 wrote:

"I feel the decision that was made was very unfair. I just don't believe anyone who made a mistake like Centrelink did could have the ... to blame someone else.

I did the right thing from the start and notified Centrelink.

So the decision of the Social Security Appeals Tribunal was wrong." (T1, p2)

* The amount of debt outstanding at the time of hearing is $2,218.40.

14. Ms Backhouse told the Tribunal that she was used to the three monthly review process undertaken by the Department in relation to Parenting Payment. In relation to Question Nine on the various Parenting Payment review forms, asking had Ms Backhouse undertaken any paid work in the last 12 weeks including information required as to when the work was "from" and "to" and her gross earnings, Ms Backhouse stated that she could not remember dates and in any event, she just saw her working arrangements as continuous. While agreeing that the amount of $411.95 she had written in these forms was only a weekly wage, Ms Backhouse stated that there was no room on the form to write whether or not this amount was received on a weekly or fortnightly basis. Ms Backhouse stated that although not one hundred per cent sure, she believed that she had provided more than one letter from the Director of the Preschool indicating her weekly wages. Centrelink did not seem to have these letters or to have referred to them apart from a letter of 7 December 1998 (T13). Ms Backhouse specifically thought a letter from the Director of the preschool was sent to Centrelink when her wages increased in June 1998.

15. Mr Kenny, for the Department, noted that there was no letter attached to the review of 22 June 1998 (T4). Ms Backhouse agreed that her Parenting Payment increased in July 1998 and she was notified of this from 2 July 1998 (T6). Ms Backhouse also agreed that her benefit increased from $187.80 to $208.00 per fortnight. Such an increase may have been odd, Ms Backhouse noted, given that her wages had increased. As she had informed the SSAT, she indicated to the Tribunal that she thought that perhaps her Parenting Payment may have decreased with increased earnings from paid employment. Payment of a higher Parenting Payment continued on for a period of six months and Ms Backhouse told the Tribunal that she did not really question it further. Ms Backhouse stated that she read the front section of Departmental letters advising of the rate of Parenting Payment and she did not really recall specifically reading the back of notices which indicated on what annual income or earnings the Department had based its calculation of her entitlement.

16. Reading the reverse of the Departmental letter of 2 July 1998 concerning information Ms Backhouse was required to tell the Department, including if her annual income of $11,750.76 was incorrect, Ms Backhouse told the Tribunal that her income had increased and she had not told the Department that it had incorrect income details recorded on Departmental letters. Ms Backhouse stated that she decided not to make any enquiries of the Department about the increased Parenting Payment and supposed that her decision was "irresponsible".

17. Ms Backhouse also agreed she received the Departmental letter of 12 September 1998 and told the Tribunal that she would have read this letter. In relation to the annual income of $11,750.76 recorded by the Department in the letter, Ms Backhouse told the Tribunal that this was incorrect but that again, she had not told the Department. "I just thought the money was mine", Ms Backhouse told the Tribunal, "I should have read the letters more closely". Ms Backhouse admitted that she did not go through the Departmental letters properly but also stated that the Department had the responsibility to check details and question any inconsistencies or incomplete matters.

18. The Tribunal was provided with evidence of Ms Backhouse's health. She stated that she had "high blood pressure" which required her taking two types of medication in an attempt to control this condition. At the time of hearing Ms Backhouse's General Practitioner was assessing the effectiveness of a new medication and she was due to return for review in approximately one week. Ms Backhouse also suffers from osteoporosis. She cannot bend in the mornings because of pain and has no strength in her hands to open jars, lids etc. A bone density scan undertaken on 31 July 1999 indicated that Ms Backhouse's bone density scores lay within the osteopenic range (Exhibit A2). She also suffers pain and throbbing in her elbows. The condition, diagnosed in June 1999, has resulted in recommendations being made by her General Practitioner, Dr Crocket, that she undertake physiotherapy and lifestyle changes including exercise and diet. Ms Backhouse stated that she is unable to afford physiotherapy but has been attempting to undertake back exercises, increase walking and to adopt a high calcium diet.

19. Ms Backhouse told the Tribunal that she has also suffered from chronic asthma since 1975. She must take three forms of asthma medication twice per day including ventolin and atrovent and also to use a nebuliser on occasions. It has been four years since Ms Backhouse has been hospitalised because of this condition; at that time Ms Backhouse had pneumonia. She attends a respiratory specialist, Dr Morgan, who monitors her condition. Ms Backhouse had pneumonia again more recently and had two weeks absence from work. Ms Backhouse stated that when she had time off work because of illness, specifically referring to a period in July 1999, she received sick pay and in fact is entitled to ten sick days per year.

20. For the past two or more years, Ms Backhouse has been taking the anti-depressant medication Dothep, two 25mg tablets at night. Ms Backhouse has not consulted a psychiatrist but consults her General Practitioner to review all her health conditions including her depression.

21. Kane Backhouse suffers from asthma and this condition is also controlled by medication.

22. Both Kane and Luke Backhouse have problems with their feet and consult a podiatrist regularly. They require correction through the use of orthotics. Their shoes cost over $100.00 per pair for each child and the podiatrist's consultation fee is $50.00 each, Ms Backhouse told the Tribunal. Ms Backhouse stated that the boys have to be reviewed at least every six months and that often new shoes are required each half year. Kane requires correction because he goes over on his ankle and is "knock kneed" while Luke also rolls over on his ankles when he walks.

23. Luke requires private remedial tuition from the tutoring company, Kip McGrath, because he has been assessed by his school teachers as being a number of years behind in his school work. Such tutoring has also been required for Kane on advice from his school teacher. Ms Backhouse is required to pay $40.00 per week in tutoring fees for both boys.

24. Financially, Ms Backhouse is also required to pay school fees of approximately $130.00 to Colyton High School while Luke's fees are voluntary. At the time of hearing, Ms Backhouse had not spoken to either of the schools regarding any fee relief which might be available to her.

25. Just prior to the hearing, Ms Backhouse learned that further expense would be required because Kane had been assessed as requiring glasses, to correct his visual acquity.

26. Ms Backhouse stated that she has municipal council rates owing of $1,600.00 in addition to outstanding interest. She had been trying to meet the payments of $50.00 per fortnight but was finding this difficult. Ms Backhouse further stated that she is required to pay $120.00 per quarter for water rates and $150.00 for electricity. Recently, Ms Backhouse was required to obtain financial assistance from the Salvation Army to meet her water rates. Because Ms Backhouse uses wood fires to warm the house in winter, her heating costs are not as high as her brother supplies her with fire wood. Ms Backhouse pays $40.00 per quarter in telephone charges and has a 1975 Cortina which requires brake repairs, quoted at $530.00. At the time of the hearing, Ms Backhouse stated she was unable to meet this cost.

27. Ms Backhouse is making home loan repayments to the St George Bank at $500.00 per month. Not only has Ms Backhouse been required to obtain financial assistance from charitable organisations such as the Salvation Army and Sydney City Mission at various times, but she also owes approximately $12,000.00 to her parents. As recently as this year, Ms Backhouse obtained a loan of $1,500.00 from her parents. Ms Backhouse attempts to repay her parents when she can, paying amounts of $50.00 or $20.00.

28. Ms Backhouse stated that her finances are tight and have been this way for some time. Because of the difficulty of her financial situation, Ms Backhouse sought the assistance of a financial counsellor, Ms S Saker, of the Salvation Army's Moneycare Financial Counselling Service. In a detailed "Cost of Living Report", Ms Saker assessed Ms Backhouse's fortnightly cost of living as $290.15 (Exhibit A3). Ms Saker made a number of suggestions to Ms Backhouse as to ways of reducing her expenditure including seeking some assistance with reductions of school fees; checking her total food bills to see if there are any savings which could be made; considering cutting down drinks by half and reducing holidays costs; cutting Christmas expenses; asking her parents for another loan to pay out her council rates and the small St George loan; and considering taking in a boarder to help her pay off rates and bills at a faster rate.

29. Ms Backhouse has had an initial interview with the financial counsellor and was to see her again on a fortnightly basis. Ms Backhouse stated that her counsellor is going to attempt to renegotiate a number of Ms Backhouse's repayments, commencing with the municipal council rates.

30. Ms Backhouse told the Tribunal that everything she does is for the boys and noted that while it may appear she is managing, this is not so because she owes considerable amounts of money to her parents and other organisations.

31. Ms Backhouse stated that if the debt to the Commonwealth is confirmed and repayments must continue, she does not know how she is going to be able to cope, particularly with all the expenses she is required to pay in relation to the boys. Ms Backhouse stated that she is not on a big wage and the loss of any income not only impacts upon herself but her sons.

32. Ms Backhouse stated that she had declared weekly wages and Centrelink should have checked this. This matter had gone on for so long with the Department paying her the increased Family Payment. If she had filled in the forms incorrectly or in an incomplete fashion, why did the Department not check back with her. The Department must bear some of the responsibility for its inaction and for not pursuing incomplete or inadequate Parenting Payment review forms, Ms Backhouse submitted.

33. The Tribunal was asked by Ms Backhouse to consider her special circumstances. Ms Backhouse stated that she lives for her sons and is trying to raise them on her own to be good and productive citizens. To impose the recovery of the debt impacts not only on her but also on the boys, Ms Backhouse submitted.

34. Ms Backhouse is attempting to bring her financial situation under some control but to impose the repayment of the debt due to the Commonwealth just adds extra stress, anxiety and practical difficulties for herself and her sons. Ms Backhouse stated that she is trying to teach her boys about the way to behave correctly in life and to accept responsibility, yet she herself is faced with the Department not accepting its responsibility. Ms Backhouse stated that her life is lived in a very frugal manner, she has no social life, and any entertainment that is undertaken is for her sons. She has been under this stress and strain for the past twelve years and does not need any further stress in her life to impact upon her health, her finances and the necessities she must provide her sons, including their tuition, orthotics, podiatrist review and glasses.

35. Mr Kenny submitted that since March 1998 Ms Backhouse had been provided with valid notices under the Act requiring her to tell the Department certain things. Firstly, My Kenny submitted that a debt could be raised under subsection 1223(1) of the Act because the amount paid to Ms Backhouse after 1 October 1997 was not payable. Referring to the SSAT's decision, Mr Kenny submitted that that Tribunal's determination that a debt could be raised under subsection 1223(5) of the Act was correct. A debt also arose under section 1224 of the Act because of Ms Backhouse's incomplete declaration of earnings on and after 23 June 1998. Further, Ms Backhouse had failed to notify that the earnings shown on the notices of 2 July 1998 and 22 September 1998 were also wrong.

36. Referring specifically to the Parenting Payment review forms completed by Ms Backhouse, Mr Kenny submitted that they were filled out in a vague manner which led the Department to confusion. Ms Backhouse had not read the forms properly and had therefore not completed them in a manner which would allow the Department to properly assess her entitlement, Mr Kenny contended. When Ms Backhouse received the unexpected increased income when she had, on her own evidence, expected a reduction, she did not enquire of the Department or inform it of any error. Such actions indicated wilful blindness and a certain recklessness.

37. Mr Kenny conceded that there was Departmental administrative error by Centrelink in not clarifying the period of the incompletely declared earnings and in recording them as fortnightly. Certainly this miscoding and the assumptions arising from it was the result of the Department's error, however it was not the sole error causing the overpayment. Accordingly, no waiver of the debt could be undertaken under subsections 1237A(1) and (2) of the Act. As there is no sole administrative error in this matter, the issue of Ms Backhouse receiving the payments in good faith did not need to be considered, however Mr Kenny submitted that were this a consideration, Ms Backhouse had not received the payments in good faith.

38. Considering the issue of special circumstances dealt with under section 1237AAD of the Act, Mr Kenny noted that while Ms Backhouse does have a number of health problems these are not insurmountable and any costs incurred by her in relation to her health are mainly covered by her pharmaceutical benefit. In relation to Ms Backhouse's financial situation, Mr Kenny also acknowledged that her finances were tight, but that she was in a better position than other social security beneficiaries. Debts Ms Backhouse had and outgoings in relation to her home meant that she had a realisable asset which many other social security recipients did not have available to them. Mr Kenny submitted that despite the illnesses and degree of financial hardship in Ms Backhouse's circumstances, there were no special circumstances in which the debt should be waived. There was nothing unusual, uncommon or exceptional or any other circumstance in which it would be unjust, unfair or inappropriate to enforce the normal liability for which the Act provides.

39. Finally Mr Kenny submitted that write-off under section 1236 of the Act is not appropriate: the debt is recoverable at law; Ms Backhouse has the capacity to repay it, even if by low instalments; her whereabouts are known; and recovery may be made cost effective by with-holdings, which process was in one sense a type of write-off though not in the legislative sense.

40. The Tribunal has reached a determination in this matter, taking into account the oral and documentary evidence, the submissions and by applying the legislation and case law.

41. Ms Backhouse was cooperative in providing evidence and the Tribunal accepted her as a witness of credit. The first issue to consider is whether or not Ms Backhouse owes a debt to the Commonwealth for an overpayment of Parenting Payment between 25 June 1998 and 10 December 1998.

42. On 22 June 1998, Ms Backhouse completed a Parenting Payment review form in which she advised she worked permanent part-time and earned $411.95 gross. Ms Backhouse did not specify whether these gross earnings were received on a weekly or fortnightly basis nor did she advise, as required, the specific period during which she earned this income (T4, p16). Ms Backhouse also did not include pay slips, though the supply of this information was required. She did provide the name and telephone number of her employer. Ms Backhouse completed further Parenting Payment review forms in identical or similar fashion on 21 July 1998 (T7, p27). A Parenting Payment review form signed on 14 September 1998 also contained no date of work nor a confirmation of whether the earnings were received on a weekly or fortnightly basis (T9). A Parenting Payment review form of 7 December 1998, while completed in a similar manner to previous review forms, also attached a statement from the Director of the High Street Preschool, Penrith, indicating that Ms Backhouse earned $411.95 per week (T13). It was at this point that the Department, on confirming this information with the Preschool Director, raised an overpayment.

43. The Tribunal finds that Ms Backhouse did not correctly complete the Parenting Payment review forms in failing to supply specific dates of the period worked, providing incomplete information as to whether her earnings were weekly or fortnightly and in not providing proof of her earnings as required by the form.

44. Ms Backhouse's own errors were not confined to providing incomplete review information, but also in not advising the Department of the incorrect annual income used to calculate her Parenting Payment entitlement. Hence on 2 July 1998 (T6) and 12 September 1998 (T11), Ms Backhouse did not inform the Department that the annual income used by the Department to calculate her Parenting Payment was incorrect. The reverse side of these Departmental notices/letters required that Ms Backhouse inform the Department within fourteen days of any incorrect information or changes in circumstances.

45. Ms Backhouse told the Tribunal that she was careless in not reading these letters carefully and then in not advising the Department of its errors. The Tribunal agrees that Ms Backhouse's silence or inactions were careless, but also reckless and to Ms Backhouse's detriment. Ms Backhouse must accept some responsibility for her actions as it is simply not good enough to take the attitude of "accepting it" when the funds of the public purse are concerned.

46. The Tribunal also finds that the Department, when provided with confusing and incomplete information by Ms Backhouse, did not clarify this information with either Ms Backhouse or her employer until some six months after the first of a number of incorrect departmental reviews. In doing so, the Department lost the opportunity to realise its and Ms Backhouse's errors and hence reduce the debt.

47. Considering these facts, the Tribunal determines that there are a number of provisions of the Act which apply. The Tribunal finds that a debt to the Commonwealth is raised under subsection 1223(1) of the Act because an amount of Parenting Payment was paid to Ms Backhouse to which she was not entitled. Further, for the period prior to 16 July 1998 a debt also arose under subsection 1223(5) of the Act. Subsection 1224(1) of the Act is also relevant because Ms Backhouse failed to comply with a valid notice requiring her to inform the Department about such matters her correct annual income/earnings.

48. Accordingly, the Tribunal finds that a debt is owed to the Commonwealth by Ms Backhouse, arising out of an overpayment of Parenting Payment paid between 25 June 1998 to 10 December 1998 raised under subsections 1223(1), 1223(5) and 1224(1) of the Act.

49. There is no dispute over that part of the SSAT's decision to set aside the ARO's decision and waive a portion of the debt incurred by Ms Backhouse from 25 June 1998 to 16 July 1998. The Tribunal has carefully considered this part of the SSAT's decision and finds that this is correct. The Tribunal now turns to consider the remainder of the debt for the period 17 July 1998 to 10 December 1998

50. Part 3.4 of the Act deals with the non-recovery of debts.

51. The Tribunal finds that the provisions of section 1236 of the Act concerning write-off, are not available to Ms Backhouse. She is able to repay the debt in a limited fashion, her whereabouts are known and nothing would be served by postponing the recovery of the debt.

52. The Tribunal has already found that both Ms Backhouse and the Department made errors in this matter. Accordingly, there is no sole Departmental administrative error which would allow waiver under section 1237A of the Act.

53. The Tribunal turns to section 1237AAD to consider whether or not the discretion contained in this section can be enacted to allow waiver of a whole or part of the debt. On the available evidence, the Tribunal does not consider that Ms Backhouse knowingly made false statements or omitted or failed to comply with the Act. She made some mistakes which she recognises in hindsight, but did not deliberately seek to deceive the Department. She thought the Department knew what it was doing.

54. According to the various decisions of Courts and Tribunals on this issue, all of Ms Backhouse's circumstances must be considered in combination. The Tribunal determines that it is not just Ms Backhouse's personal circumstances which must be considered, but also those of her two sons.

55. Ms Backhouse has poor health, she suffers from asthma, osteoporosis and takes antidepressant medication. Ms Backhouse's sons require the assistance of a podiatrist and both must wear orthotics which are expensive and need regular alteration. Luke Backhouse requires glasses.

56. Financially, Ms Backhouse is not well off although she does have an asset of a home which she is paying off. Ms Backhouse is clearly not a good financial manager. However, as a sole parent raising two teenage boys and managing the family's health problems and day-to-day expenses, financial management in such circumstances is always going to be a difficult task. Ms Backhouse is also required to fund weekly remedial tutoring for her sons as a result of teachers' recommendations.

57. Ms Backhouse seems to have recognised her poor financial management and is attempting to manage her finances in a more considered and careful fashion. To this end, she has sought ongoing assistance from a financial counsellor with the Salvation Army.

58. Another factor to be considered is the manner in which the debt arose. While Ms Backhouse must accept responsibility for her errors and omissions, the Department is also accountable and must accept partial responsibility for the debt. This debt would not have increased to the level it did had there been earlier detection by the Department by checking incomplete and confusing information supplied by Ms Backhouse and seeking confirmatory information such as a payslip or employer verification.

59. The Tribunal finds that the factors of Ms Backhouse's and her family's health, financial situation, her sons' remedial tutoring requirements and the administrative error on the part of the Department, in combination, constitute circumstances which are sufficiently unusual and uncommon and that to disregard these circumstances as special would produce an unjust and unfair result. Accordingly the Tribunal finds that the provisions of section 1237AAD are met in Ms Backhouse's case and that waiver of a part or whole of the debt owed by her to the Commonwealth is possible.

60. The Tribunal does not consider that the whole of the debt should be waived as responsibility for its existence arose out of the errors and omissions of both Ms Backhouse and the Department. The Tribunal determines that half of the debt owed by Ms Backhouse to the Commonwealth for the period 17 July to 10 December 1998 should be waived. The remainder of the debt for this period should be recovered by way of withholdings commensurate with Ms Backhouse's financial circumstances and in consultation with her financial counsellor.

61. Accordingly, for the reasons set out above, under section 43 of the Administrative Appeals Tribunal Act, the Tribunal sets aside the decision under review as it relates to the debt owed by Ms Backhouse to the Commonwealth between 17 July 1998 and 10 December 1998 and substitutes its decision that one half of this debt be waived under section 1237AAD of the Act.

I certify that the 61 preceding paragraphs are a true copy of the reasons for the decision herein of Ms S Bullock

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

Representative for the Respondent Mr J Kenny, Departmental Advocate