(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).

(1A) Subsection (1) only applies if:

(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;

1. In Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190; (2003) 132 FCR 126, the Full Federal Court, per Selway J, observed (at [35]) that:

The ordinary or usual interpretation of the phrase "attributable solely to" is that it refers to the single or sole cause of the relevant act or event. The word "attributable" means "capable of being attributed". It involves an objective assessment of causation. The words "a debt attributable solely to an administrative error" can be paraphrased as meaning that the only cause that objectively can be ascribed to the relevant debt is an administrative error.

1. The Tribunal has observed, above, that the income declared by the Respondent in the relevant period was round figures that did not correlate with the variable gross amounts she had earned. There was, further, a pattern of under-declaration of income across the debt period. The Tribunal found that the debt was caused by the incorrect declaration of income by the Respondent. It was not caused by (or contributed to by) Commonwealth administrative error and, because of this, is unable to be waived under section 1237A of the Social Security Act.

1. Section 1237AAD of the Social Security Act provides that the Secretary may waive the right to recover all or part of a debt if 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.

1. As all of the above requirements are cumulative, and given the matters raised by and on behalf of the Respondent at the hearing, the Tribunal first considered whether there are special circumstances in this case that make it desirable to waive the debt, or part of the debt.
2. In Secretary, Department of Social Security v Hales (1998) 82 FCR 154; [1998] FCA 219, the Federal Court noted that:

The concept of special circumstances is broad. A constellation of factors, including financial circumstances, may fall within it. The express exclusion of financial hardship alone as a special circumstance is an indicator that it would otherwise be included. This gives some measure of the range of circumstances which will qualify as special....

The evident purpose of s 1237AAD is to enable a flexible response to the wide range of situations which could give rise to hardship or unfairness in the event of a rigid application of a requirement for recovery of debt. It is inappropriate to constrain that flexibility by imposing a narrow or artificial construction upon the words...But to anticipate the limits of the categories of possible cases by imposing on the language of the section a fetter upon its application which is not mandated by its words, is to erode its useful purpose.

1. Elsewhere, the term special circumstances has been held to relate to circumstances that are distinguishable from those of other applicants (Groth and Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541), that are distinguishable from the usual case (Dranichnikov v Centrelink [2003] FCAFC 133) and that require the Tribunal to consider not only an applicant's circumstances, but to consider whether there are circumstances that make it desirable for the section to apply, having regard also to the general administration of the social security system (Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114).
2. The Tribunal has set out in some detail, above, the financial circumstances of the Respondent at the time of the AAT first review hearing and her more recent circumstances as of April 2025. The Respondent gave evidence at the hearing that she is a full-time carer for her mother who is unwell and who depends on her. She is unable to work and believes she can't repay the debt. She gave evidence that she has previously made repayments towards the debt of $20 per fortnight from her jobseeker and carer allowance payments.
3. The Respondent's representative submitted that the Tribunal should waive any debt under section 1237AAD of the Social Security Act and that administrative error is one of the factors being relied on by the Respondent in this matter. The Respondent's written submissions on this point were that there are three matters which, when considered together, establish special circumstances:[7]

The first matter is financial hardship. It is true that s 1237AAD(b) refers to special circumstances "other than financial hardship alone", but that does not mean that the existence of financial hardship, or its severity in a particular case, is an irrelevant consideration for the purposes of waiver.... [The Respondent] is experiencing financial hardship of a severe or extreme nature.

The second matter is that administrative errors by Centrelink have contributed to any debt amount. To illustrate, [the Respondent] reported $170 and $1000 of income for her first two newstart allowance periods respectively. Yet, Centrelink calculated [the Respondent's] newstart allowance payments for those instalment periods on the basis that her fortnightly income amounts were $0.18 and $0.16 respectively. It is not possible to know how widespread such administrative errors were throughout the Relevant Period, as the Secretary has not produced records of [the Respondent's] reported income in each instalment period, nor correspondence confirming the income amount that her payments were based on in each instalment period. But there is sufficient material before the Tribunal to infer that the error occurred on several occasions.

The third matter is delay. The Relevant Period commenced on 11 March 2015 and ended on 20 May 2017. Centrelink did not make any subsequent enquiries as to [the Respondent's] earnings until February 2018, and did not first raise the debt until April 2018. The ARO's decision to confirm the debt was not made until September 2018. As such, the debt was not conclusively imposed on [the Respondent] for three and a half years after the Relevant Period commenced. Moreover, the Secretary is still seeking to defend the debt decision in these proceedings, which will be heard in May 2025, more than a decade after the Relevant Period commenced. The protracted nature of this case...is not only likely to have caused [the Respondent] significant distress and uncertainty, but to have undermined her ability to clearly recall facts and circumstances from the Relevant Period which are now in issue.

1. At the Tribunal hearing, the Respondent's representative reiterated their submissions that the above factors establish special circumstances. In addition, the Respondent's representative submitted that the Respondent is a full-time carer and is unable to return to work and that all of the factors before the Tribunal, in combination, are out of the ordinary and amount to special circumstances.
2. In contrast, the Applicant submitted that the discretion in section 1237AAD of the Social Security Act should not be exercised as the Respondent's circumstances are not distinguishable from other social security recipients such that they could be considered to be special circumstances, and there are no matters that would make it desirable to waive recovery of the debt.
3. The Tribunal has found, for the reasons set out above, that it is not persuaded the Respondent is in severe financial hardship or would face severe financial hardship if required to make reasonable repayments towards the debt. The payment summary screens provided to the Tribunal indicate variations to the Respondent's fortnightly rate of newstart allowance, which suggests that the Respondent was being paid a rate based on the fortnightly income she was reporting to Centrelink, and not based on incorrectly recorded income of $0.18 or $0.16 as asserted by her representative. Further, in circumstances where an overpayment has been identified by Centrelink through the provision of ATO lodgement information, a delay in calculating and raising a debt is an inevitable result of the debt having been identified in that manner.
4. The Tribunal accepted the Respondent is a full-time carer for her mother and is unable to work due to her caring responsibilities. However, while accepting this, and while noting the evidence presented by and on behalf of the Respondent about her circumstances, the Tribunal was not persuaded that there are circumstances in this case that take the case out of the ordinary when compared with other social security recipients and which make it appropriate to exercise the discretion in section 1237AAD of the Social Security Act.
5. Other provisions in Part 5.4 of the Social Security Act are not applicable to the circumstances of this matter. The Tribunal therefore finds that the newstart allowance debt is recoverable by the Commonwealth.

The Tribunal sets aside the decision under review and makes a decision in substitution that there is a newstart allowance debt totalling $7,382.16 for the period 25 March 2015 to 8 August 2017. The debt is recoverable by the Commonwealth.

[1] Commonwealth Ombudsman, Lessons in Lawfulness: Own motion investigation into Service Australia's and the Department of Social Services' response to the question of the lawfulness of income apportionment before 7 December 2020, August 2023.

[2] Social Security and Other Legislation Amendment (Technical Changes No 2) Bill 2025.

[3] Points 1068‑G7B, 1068‑G7C, 1068‑G8 and 1068‑G8A and section 1073 of the Social Security Act. These provisions are not relevant to the circumstances of this matter.

[4] Applicant's Statement of Facts, Issues and Contentions at paragraph 6.6.

[5] Annexure C to Applicant's Reply dated 14 May 2025.

[6] Respondent's Supplementary Submissions , paragraph 10.

[7] Respondent's SFIC at paragraphs 64-66; references to location in T documents omitted.