SOCIAL SECURITY - carer payment - parenting payment (partnered) - Centrelink - overpayment - assets exceeded cut-off limit - rental property - disclosure to Centrelink - newstart allowance - property value - valuations - incorrect coding of information - combined assets - youth allowance - Centrelink notices - limitation period for recovery of debt- write off debt - irrecoverable at law - failure to notify Centrelink - duty of care

Social Security Act 1991 ss 1064, 1064-G3, 1223, 1223(1), 1231, 1232, 1232(2), 1233,

1236(1), 1236(1A), 1236(1B), 1236(1C), 1237AAD, 500I(1)(c), 500Q(3)

Social Security (Administration) Act 1999 ss 4, 68, 74

Pickering v Centrelink [2008] FCA 561

Scott and Anor v Secretary, Department of Social Security [2000] FCA 1241; (2000) 65 ALD 79

Scott v Pedler [2003] FCA 650; [2003] 74 ALD 424

Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190; (2003) 132 FCR 126

Wang v Secretary, Department of Employment and Workplace Relations [2006] FCA 898

1. Mr Mohamed Noureddine received the carer payment (CP) between 27 July 2001 and 19 August 2008 in respect of care he provided to his father, Mr Abdul-Hamid Noureddine. Mrs Houda Noureddine received the parenting payment (partnered) (PP) between 1995 and 2008.
2. On 9 July 2009 Mr and Mrs Noureddine received letters from Centrelink informing them that they had been overpaid the PP and CP because the value of their assets exceeded the cut-off limit for the receipt of those social security payments. Mrs Noureddine was informed that she had been overpaid $71,116.06 between 6 December 2000 and 14 October 2008. Mr Noureddine was told that he had been overpaid $30,689.10 between 27 July 2001 and 19 August 2008. Mr and Mrs Noureddine sought review of those decisions by an Authorised Review Officer (ARO).
3. On 8 July 2009 the ARO decided that the decision to seek repayment of $71,116.06 from Mrs Noureddine was correct. The ARO also decided that Mr Noureddine had been overpaid the CP but altered the amount of overpayment to $30,585.94. The ARO also altered the period of the debt to between 26 September 2001 and 19 August 2008.
4. Dissatisfied with the ARO's decision, Mr and Mrs Noureddine sought review by the Social Security Appeals Tribunal (SSAT). On 26 November 2009 the SSAT affirmed the decisions of the ARO. Mr and Mrs Noureddine now seek review of the SSAT decision by this Tribunal.
5. Mr and Mrs Noureddine do not dispute the calculations made by Centrelink regarding the claimed overpayments. The dispute arises from the fact that Mr and Mrs Noureddine have owned a rental property in Perth since 1987. This asset was not taken into account when Centrelink calculated their social security payments. However, Mr and Mrs Noureddine contend they had notified Centrelink of their ownership of the Perth property, and that the overpayments occurred as a result of Centrelink's error. Therefore, the only issues which I must determine are:
   • (a) whether the overpayments are debts due to the Commonwealth; and
   • (b) if the answer to (a) is in the affirmative, whether all or part of those debts should be written off or waived.

1. Mr and Mrs Noureddine became the joint proprietors of a property situated at 16 Smith Street, Dianella, Perth (the Dianella property) on 19 March 1987. They did not reside in the property but it appears that it was occupied by a friend until about February 1992, when it was placed in the hands of a real estate agent, Roy Weston. Mr and Mrs Noureddine received rental income from the property commencing on 5 February 1992. At that time, the weekly rent was $115.00.
2. Mr Noureddine lodged a claim for Newstart Allowance (NA) on 31 August 1994. On his claim form, in the section dealing with income and assets, Mr Noureddine ticked the Yes box to the question whether he owned or had an interest in any real estate apart from the home in which he lived. On 6 September 1994, Mr Noureddine completed a Form R (Real Estate Details) in which he set down the address of the Dianella property and the fact that it was being rented through the real estate agent, Roy Weston. He recorded the gross weekly rental as $115.00 and he estimated the current market value of the property to be $80,000. In the section dealing with Partner Details, which he completed for his wife, he answered Yes to the question whether Mrs Noureddine owned an interest in real estate/farm in Australia or overseas, apart from the house in which she lived. The Secretary has acknowledged that upon receiving details from the Form R submitted by Mr Noureddine, Centrelink incorrectly coded the information on that form. Therefore, the income was recorded but the property was not correctly recorded as an asset. On 27 July 2001 Mr Noureddine lodged a claim for the CP because, at about that time, his father had suffered a stroke and he became his father's carer.
3. Mrs Noureddine lodged a claim for partner allowance (which later became the PP in March 1998) on 6 September 1994. She was also required to provide asset details but it appears that her form was completed by her husband. In answer to the question whether she or her partner had any other assets which were not disclosed to Centrelink when answering any other questions on forms completed by her, she answered No. Mrs Noureddine was granted the partner allowance on 1 July 1995. She subsequently began to receive the PP.
4. At the time Mr and Mrs Noureddine notified Centrelink that they owned the Dianella property, they valued the land and building at $80,000. More recently, on 13 November 2008, Centrelink received from the Australian Valuation Office (AVO), a statement setting out the value of the Dianella property. Mr Graham Weaver, an AVO valuer, valued the property at $425,000 on 10 December 2008. On 13 November 2008, Mr John Bempasciuto from the AVO wrote to Centrelink stating that the Dianella property was purchased on 30 January 1987 for $62,000 by Mr and Mrs Noureddine. Mr Weaver again valued the property on 29 January 2009 at $425,000. He also provided a range of historic values between December 1995 and December 2007. Mr and Mrs Noureddine did not dispute any of the valuations provided by Mr Weaver. Those valuations were completed following a roadside inspection only.
5. It was only in October 2008, when Mr Noureddine lodged a claim with Centrelink for the NA, that Centrelink noticed that rental income had been recorded as part of Mrs Noureddine's income details. When Centrelink checked to see that an asset had been recorded, it noticed the error. That error was corrected and Mrs Noureddine's PP was cancelled because the combined assets of Mr and Mrs Noureddine exceeded the asset limit for payment of that benefit. Mr Noureddine's application for the NA was rejected. Subsequently, Centrelink calculated the extent of overpayment which resulted in debt recovery proceedings being taken against Mr and Mrs Noureddine.

1. Mr and Mrs Noureddine received numerous notices from Centrelink regarding their social security payments between June 2000 and October 2008. The documents in evidence and their relevant contents are set out below.
   • Mrs Noureddine received a letter dated 21 June 2000. The letter set out the amount of PP to be paid to Mrs Noureddine and it stated that the information used for calculating her regular payment included assets: - $0; her partner's annual income $1993.16; and Mrs Noureddine's fortnightly earned income of $0.

The letter also stated that it was an information notice given under the social security law. It explained that Mrs Noureddine had to tell Centrelink if her personal income exceeded $76.66 per fortnight; if Mr Noureddine's total personal income exceeded $76.66 per fortnight; and if Mr and Mrs Noureddine's combined assets exceeded $178,500 (because they were homeowners).

• Mrs Noureddine received a letter dated 24 August 2000 stating that her PP was $303.70 and that the information used for calculating her payment included assets: - $0 as well as income figures. The letter stated that she must contact Centrelink if her and her husband's combined assets exceeded $178,500.
• In a letter dated 26 September 2001 Centrelink informed Mr Noureddine that his CP would be $342.60 plus a pharmaceutical allowance. Centrelink stated that the information used for calculating his regular payment was a combined annual income of $3986.32. There was no mention of any assets. The letter also stated that Mr Noureddine must tell Centrelink if his and his wife's combined assets, other than financial investments, exceeded $200,750.
• On 14 March 2002 Centrelink wrote to Mr Noureddine stating that his CP amount was $350.25 together with a pharmaceutical allowance. The letter stated that the information used for calculating his regular payment was a combined annual income of $3986.32. Centrelink also stated that he must tell Centrelink if his and his wife's combined assets, other than financial investments, exceeded $200,750.
• Centrelink wrote to Mrs Noureddine on 30 July 2002 regarding her PP. The letter stated that her PP amount was $325.47, less a debt repayment amount of $54.72. The letter stated that the information used for calculating her regular payment was assets: - $0 and the same income amounts as previously stated. The letter also stated that Mrs Noureddine must notify Centrelink if her and her husband's assets exceeded $206,500.
• Centrelink wrote to Mrs Noureddine on 2 October 2002 stating that her PP amount was $329.15. It also stated that the information used for calculating her regular payment was assets: - $36,753, and that her partner's annual income was $2077.40. Her fortnightly earned income was $0. The letter also stated that Centrelink could not pay Mrs Noureddine as much PP as she had previously received because her and her partner's income had increased. In fact, that should have been a reference to an increase in the assets amount as well as the income amount. Centrelink also told Mrs Noureddine that she must tell Centrelink if her and her husband's combined assets exceeded $206,500.
• Centrelink wrote to Mr Noureddine on 9 March 2003 stating that his CP amount would be $361.30 together with the pharmaceutical allowance. The letter stated that the information used for calculating his regular payment was a combined annual income of $4155.14. Centrelink required Mr Noureddine to contact a Centrelink officer if his and his wife's combined assets, other than financial investments, exceed $199,997.
• Centrelink wrote to Mr Noureddine on 7 September 2003 stating that his CP amount was now $370.40 together with the pharmaceutical allowance. Centrelink stated that the information used for calculating his regular payment was a combined annual income of $4155.14. It explained that he must tell Centrelink if his and his wife's combined assets, other than financial investments, exceeded $205,997.
• Centrelink wrote to Mr Noureddine on 12 June 2005 informing him of the $1000.00 bonus payment for carers receiving CP and $600.00 for carers receiving carer allowance (CA) which was announced by the Government in the 2005-2006 Budget. The letter also informed Mr Noureddine that he must tell Centrelink if his and his wife's combined assets, other than financial investments, exceeded $210,997.
• On 6 March 2006 Centrelink wrote to Mr Noureddine informing him that his CP amount was now $412.39 together with the pharmaceutical allowance. Centrelink stated that the information used for calculating his regular payment was a combined annual income of $4188.90. It stated that the basic rate of his payment had increased in line with the cost of living index rise. The letter also stated that he must contact Centrelink if his and his wife's combined assets, other than financial investments, exceeded $216,497.
• Centrelink wrote to Mrs Noureddine on 26 June 2007 stating that her PP amount was now $372.98. It also stated that the information Centrelink used for calculating her regular payment was assets: - $21,907. The letter also stated that her partner's annual income at that time was $129.48. The letter stated that the PP had reduced because her and her partner's income had increased. Centrelink again told Mrs Noureddine that she must notify Centrelink if her and her partner's income increased and that their combined assets exceeded $229,000.

12. On 21 January 2002 one of Mr and Mrs Noureddine's children lodged a claim with Centrelink for the youth allowance (YA). In that claim, which was signed by Mrs Noureddine, she stated that the current market value of their family assets was $15,000. There was no mention of the value of the Dianella property.

1. Another of Mrs Noureddine's children lodged a YA claim on 31 October 2003. Mr Noureddine signed that claim form and he estimated the current market value of the family assets as being $30,000. Again, there was no reference to the Dianella property.
2. In a third YA claim by another of Mr and Mrs Noureddine's children lodged on 31 January 2006, the question regarding net assets was not answered.
3. A completed questionnaire signed by Mrs Noureddine was lodged with Centrelink on 26 June 2007. In answer to the question whether she or her partner owned or partly owned or had an interest in any real estate apart from the home that they live in, she answered: No.
4. On 4 September 2007 Mr Noureddine received a letter from Centrelink setting out an account statement. The letter stated that Mr Noureddine needed to tell Centrelink within 14 days if any information was incorrect, missing or needed to be updated. The value of the Dianella property was not listed as an asset on that statement. Mr Noureddine did not notify Centrelink of the correct value of the Dianella property following that letter.
5. Centrelink sent Mr Noureddine a further account statement on 27 November 2007 and, again, there is no mention in that statement of the value of the Dianella property. It stated that Mr Noureddine must inform Centrelink within 14 days if any of the information was incorrect, missing or needed to be updated. Mr Noureddine did not respond to that letter.
6. Mr Noureddine was again sent an account statement on 19 February 2008 in which there was no account of the value of the Dianella property. Mr Noureddine did not respond as required to correct that information.
7. Mrs Noureddine was sent notices by Centrelink on 27 March 2008, 21 May 2008, 13 August 2008 and 21 October 2008 informing her about her PP. Those letters all included statements requiring Mrs Noureddine to tell Centrelink if her and her husband's combined assets exceeded $236,500 on 27 March 2008 and 21 May 2008, and $243,500 on 13 August 2008 and 21 October 2008. Mrs Noureddine did not respond to those letters.

1. The historic values of the Dianella property provided by Mr Weaver were as follows:

11/12/1995 $125,000

11/12/1996 $135,000

11/12/1997 $145,000

11/12/1998 $160,000

11/12/1999 $180,000

11/12/2000 $215,000

11/12/2001 $230,000

11/12/2002 $270,000

11/12/2003 $300,000

11/12/2004 $330,000

11/12/2005 $370,000

11/12/2006 $550,000

11/12/2007 $500,000

1. The above valuations indicate that at all times between December 2000 and October 2008, Mr and Mrs Noureddine's total assets exceeded the cut-off limit for social security payments as set out in the Centrelink letters sent to them during this period.

1. Section 1223 of the Social Security Act 1991 (the Act) deals with debts arising from a lack of qualification or overpayment. Section 1223(1) of the Act provides:

(1) Subject to this section, if:

(a) a social security payment is made; and

(b) a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;

the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.

1. Mr and Mrs Noureddine did not dispute the AVO valuations of the Dianella property between 2000 and 2008. Furthermore, they did not dispute the fact that the CP received by Mr Noureddine and the PP received by Mrs Noureddine were both subject to an assets and income test. The payability of the CP is subject to the rate calculator at the end of s 1064 of the Act (s 1064(1)). Module A of the rate calculator, at step 9, states that in calculating the rate of pension payable, the assets test must be applied using Module G to work out the reduction for assets. Module G requires the calculation of a person's asset value limit. That is set out at Table G-1 of s 1064-G3 of the Act. Where the assets limit is exceeded, no pension can be paid. Section 500I(1)(c) provides that even though a person may be qualified for the PP, the payment may not be payable because the value of the person's assets exceeds the person's assets value limit. Section 500Q(3) sets out the assets value limit of a person who is a member of a couple.
2. It is clear that the value of the Dianella property alone, at all relevant times, exceeded the assets value limits for the receipt of the PP and the CP. It follows that Mr and Mrs Noureddine have therefore received the benefit of a social security payment to which they were not entitled during the period 27 July 2001 to 19 August 2008 (Mr Noureddine), and 6 December 2001 and 14 October 2008 (Mrs Noureddine). Therefore, the sum of the payments received in the relevant periods is a debt due to the Commonwealth by Mr and Mrs Noureddine respectively. Those debts are taken to have arisen when those payments were made.

1. The methods of debt recovery which arise out of overpayments under the Act are set out in Chapter 5, Part 5.3. Debt recovery may be made by deductions from a debtor's pension, benefit or allowance (s 1231); by legal proceedings (s 1232); or by garnishee notice (s 1233). Mr Yassin Noureddine, Mr and Mrs Noureddine's son, who appeared on their behalf, submitted that debt recovery was subject to a six year statutory limit. He submitted that the Secretary could not recover the entire debts because of the limitation period and the fact that the debts first arose in 2000 and 2001 respectively. Mr and Mrs Noureddine were notified of their respective debts on 10 June 2009.
2. The problem with this submission is that s 1231(2A) of the Act, which deals with the limitation period for the recovery of debts by deduction from a pension, benefit or allowance, provides:

(2A) Subject to subsections (2C), (2D) and (2E), action under this section for the recovery of a debt or overpayment is not to be commenced after the end of the period of 6 years starting on the first day on which an officer becomes aware, or could reasonably be expected to have become aware, of the circumstances that gave rise to the debt.

1. A Centrelink Customer Service Officer (CSO) only became aware of the overpayment in October 2008, after Mr Noureddine attended Centrelink's offices seeking to transfer from the CA to the NA (presumably following the death of his father). In the course of the interview, the CSO interviewing Mr Noureddine noticed there was other income coded on Mrs Noureddine's Centrelink file and asked Mr Noureddine about the nature of that income. Mr Noureddine told the CSO it was rental from a property in Western Australia where he previously resided. The CSO then identified the error. Correcting that error resulted in the debts being raised, and cessation of Mrs Noureddine's PP and rejection of Mr Noureddine's NA claim. Mr Yassin Noureddine submitted that because Centrelink was aware that his parents were receiving rental income, they should have been aware, or could reasonably be expected to have become aware, that his parents owned real estate. With respect, I do not accept that submission.
2. The fact that the recipient of a social security payment is receiving rent does not, by itself, necessarily indicate ownership of a property. For example, a sub-tenant under a lease may pay rental to the tenant who has remained liable to the landlord for the payment of the rent. Also, once the original coding had been made and entered in Mr and Mrs Noureddine's records, as it was entitled to do, Centrelink undoubtedly relied upon the numerous letters and statements sent to Mr and Mrs Noureddine for an accurate account of their assets and income. These letters and statements contained the basis for the calculation of their social security payments, as well as a warning that they must notify Centrelink immediately, or at least within 14 days, if any of the circumstances were incorrect or had changed recently.
3. Mr and Mrs Noureddine agreed that they had received those letters but did not pay close attention to the notification requirements. In fact, in some instances, they completed further forms and questionnaires provided by Centrelink in which they expressly stated that they did not own any real estate apart from the home that they lived in. In addition, when claims were made by their children for YA, they did not correctly complete those forms when recording their assets.
4. It was, in my opinion, merely fortunate that the situation did not persist for a longer period of time. An alert CSO checked Centrelink's records when Mr Noureddine sought to transfer from CP to NA. For the entire period of the overpayment, Mr Noureddine only received the CP while Mrs Noureddine only received the PP. Therefore, during that period of time, absent any advice from Mr or Mrs Noureddine about a change in circumstances, a correction, or an update of asset values, there seems to be nothing which might have triggered a re-examination of their records. For those reasons, I find that the limitation period in respect of recovery by deductions commenced when the CSO examined Mr and Mrs Noureddine's records on 27 October 2008. There was nothing prior to that date which could give rise to a reasonable expectation that a CSO should have become aware of the error. Therefore, I find that all overpayments made to Mr and Mrs Noureddine in the relevant periods fall within the limitation period for recovery of debts by deduction.
5. There is a similar provision regarding limitation of recovery under s 1232 of the Act which deals with legal proceedings. Section 1232(2) provides:

(2) Subject to subsections (4), (5) and (6), legal proceedings for the recovery of the debt are not to be commenced after the end of the period of 6 years starting on the first day on which an officer becomes aware, or could reasonably be expected to have become aware, of the circumstances that gave rise to the debt.

Sub-sections (4), (5) and (6) deal with how the debts should be recovered where part of the amount owing has been paid; where there is an acknowledgement of the debt; or a review of the file takes place regarding action for the recovery of debt. Otherwise, the considerations are precisely the same as those in respect of recovery by deduction. Therefore, as with the recovery of debt by deductions, I find that the limitation period commenced on 27 October 2008.

1. There are certain circumstances in which the Secretary may write-off or waive a debt recoverable by the Commonwealth.
2. Section 1236(1) of the Act provides that subject to subsection (1A), the Secretary may decide to write-off a debt for a stated period or otherwise. Section 1236(1A) of the Act provides:

(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.

1. The meaning of the expression irrecoverable law is explained in s 1236(1B). It provides:

(1B) For the purposes of paragraph (1A)(a), a debt is taken to be irrecoverable at law if, and only if:

(a) the debt cannot be recovered by means of deductions, or legal proceedings, or garnishee notice, because the relevant 6 year period mentioned in section 1231, 1232 or 1233 has elapsed; or

(aa) the debt cannot be recovered by means of deductions or setting off because the relevant 6 year period mentioned in section 86 of the A New Tax System (Family Assistance) (Administration) Act 1999 has elapsed; or

(b there is no proof of the debt capable of sustaining legal proceedings for its recovery; or

(c) the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or

(d) the debtor has died leaving no estate or insufficient funds in the debtor's estate to repay the debt.

1. The expression capacity to repay the debt is explained in s 1236(1C) of the Act. It provides:

(1C) For the purposes of paragraph (1A)(b), if a debt is recoverable by means of:

(a) deductions from the debtor's social security payment; or

(b) deductions under section 84 of the A New Tax System (Family Assistance) (Administration) Act 1999; or

(c) setting off under section 84A of that Act;

the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship.

1. A debt is only irrecoverable at law where the relevant six year period regarding deductions, legal proceedings or a garnishee notice, has elapsed. As I have found that the six year limitation period commenced on 27 October 2008, it follows that the debts are not irrecoverable at law.
2. Mr and Mrs Noureddine could only be described as having no capacity to repay their debts where deductions from their social security payments would result in them being in severe financial hardship. That is not their position. The documents in evidence disclose that the house in which they now live, and the Dianella property, are not mortgaged. The Dianella property was valued at $425,000 in 2009. It is reasonable to expect that its current value exceeds that sum. Therefore, there is no obvious reason why that property cannot be used to repay the debt either by way of sale or refinancing. Accordingly, I find that Mr and Mrs Noureddine do have the capacity to repay the debt.
3. The remaining subsections of s 1236(1A) of the Act do not apply in this case. Mr and Mrs Noureddine's whereabouts are known and it would be cost effective for the Commonwealth to take action to recover the debt. Therefore, for the reasons I have stated, the Secretary cannot write-off the debt.
4. Alternatively, Mr and Mrs Noureddine contended that the debts should be waived because they arose from Centrelink's error. Section 1237A(1) of the Act provides:

(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).

Section 1237A(1) of the Act is subject to the time limit set out in s 1237A(1A). However, those time limits do not apply in this case because the debt was not raised within a period of six weeks from the first payment or compliance with a notification obligation.

1. In order to fall within provisions set out in s 1237A(1) of the Act, the debt must be attributable solely to an administrative error made by the Commonwealth. The words used in that expression should be given their ordinary meaning in the context in which they appear in the Act. The expression attributable solely to administrative error was considered by the Full Court of the Federal Court (Heerey, R D Nicholson and Selway JJ) in Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190; (2003) 132 FCR 126. Nicholson J said, at 130:

[23] . . . The word "attributable" brings into play the notions of causation "as an effect to a cause": Macquarie Dictionary, 2nd ed, Macquarie Library, NSW, 1991, p 106. The word "solely" brings notions of exclusivity. Solely means "as the only one or ones" or "exclusively or only": Macquarie Dictionary, p 1664. It means "one and only, single; only", also "singular, unique, unrivalled": The New Shorter Oxford English Dictionary, Clarendon Press, Oxford, 1993, p 2938. It is used elsewhere in the Act but not in conjunction with "attributable" so that other usage does not assist in relation to the subsection in question.

1. Selway J also said, in relation to that expression, at 135:

[35] 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 question which I must address is: what caused the debts in this case to arise? Mr Yassin Noureddine submitted that the cause of Mr and Mrs Noureddine's debts was the fact that Centrelink had incorrectly coded the asset disclosed by his parents when his father first applied for the NA in 1994. There was no dispute that Centrelink made an error in the coding of the asset which resulted in it not being recorded on Mr and Mrs Noureddine's Centrelink files. That error also resulted in the asset not being taken into account over the subsequent years when Centrelink calculated the payments due to Mr and Mrs Noureddine under their respective social security payments. However, that was not the only reason why Mr and Mrs Noureddine were overpaid from 2001 onwards.
2. If, for example, the value of the Dianella property had been correctly coded and entered on Centrelink's records in 1994 at $80,000, and Mr and Mrs Noureddine had not updated the value of that property as they were required and requested to do by Centrelink in the following years, the debt would nevertheless have occurred. That is because the cut-off limit as set out in Centrelink's letter to Mrs Noureddine on 21 June 2000 was $178,500 when the property was valued at around $200,000. Therefore, if Mr and Mrs Noureddine continued to simply ignore those letters as they did in the eight year period in question, nothing would have changed until such time as Mr and Mrs Noureddine had updated the value of the Dianella property.
3. While it might be true to say that a Centrelink officer calculating Mr and Mrs Noureddine's social security payments between 2000 and 2008, being aware of an asset valued at $80,000, might have queried whether that value remained correct, to do so is, in my opinion, purely speculative. In fact, because of the obligation placed on recipients of social security payments to ensure that payments are correct, and because Centrelink in its letters set out the basis upon which the regular payments were calculated, including the value of assets; it is equally possible that Centrelink would have ignored that valuation until 2008.
4. The problem here is that Mr and Mrs Noureddine failed in their statutory duty to notify Centrelink not only of the existence of assets, but more importantly, their value and updated value from time to time. Centrelink payments are generally calculated on a fortnightly basis and hence the letters state that where events or changes in circumstances occur in any 14 day period, Centrelink must be notified.
5. In my opinion, it was Mr and Mrs Noureddine's failure to closely monitor the value of their assets and to respond to Centrelink's letters within the 14 day period, notifying Centrelink of any changes, which caused the debts to arise.
6. This was further compounded by the subsequent claims lodged on behalf of their children and in a questionnaire dealing with assets. On these occasions, Mr and Mrs Noureddine did not make it clear that they continued to hold the Dianella property and that its value was increasing at a substantial rate annually.
7. For those reasons, I find it cannot be said that the cause of Mr and Mrs Noureddine's debts was solely Centrelink's error in failing to correctly code the Dianella property as an asset. That being the case, there is no purpose in attempting to determine whether the payments were received in good faith.
8. There is one further section of the Act which Mr and Mrs Noureddine rely on. It provides for waiver in special circumstances. Section 1237AAD of the Act provides:

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 Secretary submitted that Mr and Mrs Noureddine could not rely on s 1237AAD because there had been a false representation and they also failed to comply with the Act in respect of the notices and the completion of various forms relating to assets. It is possible to make findings in relation to false statements or false representations and compliance with the provisions of the Act. However, it seems to me that the most significant aspect of s 1237AAD, for the purposes of this case, is the failure of Mr and Mrs Noureddine to comply with the Social Security (Administration) Act 1999 (the Administration Act). The notices sent out to Mr and Mrs Noureddine clearly state that they are information notices given under the social security law. The expression social security law includes the Administration Act (s 4).
2. Section 68 of the Administration Act provides that where a person is receiving a social security payment, the Secretary may give the person a notice which requires the person to, amongst other things,
   • (a) inform the department if 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.
3. Section 74 of the Administration Act makes it an offence to fail to comply with a notice given under s 68. Therefore, because Mr and Mrs Noureddine did not respond to any notices given to them between 2000 and 2008, and those notices were information notices given under the social security law, I find that they were knowingly in breach of the Administration Act. It must follow that the waiver provisions set out in s 1237AAD cannot apply to Mr and Mrs Noureddine.

1. Mr Yassin Noureddine submitted that his parents' debts arose because Centrelink staff did not take sufficient care to properly codify the Dianella property in 1994. While this is only one part of the reason why the debts arose, I have nevertheless decided to address this submission because it is one which arises not infrequently in these types of cases.
2. The Federal Court has had reason to deal with the issue of duty of care by Departments performing statutory functions in the context of actions for damages for breach of statutory duty. The Full Court of the Federal Court dealt with such a matter in Scott and Anor v Secretary, Department of Social Security [2000] FCA 1241; (2000) 65 ALD 79 (Scott 2000) . Beaumont and French JJ said, at 87:

[18] . . . The House of Lords there noted that although welfare legislation affecting a particular area of activity does in fact provide protection to those individuals particularly affected by that activity, the legislation is not to be treated as being passed for the benefit of those individuals but for the benefit of society in general; so that the cases where a private right of action has been held to arise are all cases where the statutory duty has been very limited and specific as opposed to general administrative functions involving the exercise of administrative discretion.

1. Finkelstein J, while not dissenting, appeared to disagree with the reasons of Beaumont and French JJ regarding whether the respondent in that case owed the appellants a duty of care. In his view, a common law duty of care may arise in the performance of statutory functions, particularly in the manner in which the statutory duty is performed. However, he made it clear that even if the statute that imposes the duty does not give rise to a statutory cause of action, the repository of the duty may nevertheless be liable for a breach of a common law duty of care.
2. Gray ACJ, dealt with this issue in Scott v Pedler [2003] FCA 650; [2003] 74 ALD 424 (Scott 2003). His Honour referred to the Full Court decision in Scott 2000 and said that the majority decision in that case was binding on him. He also said that he was probably bound to hold that no common law duty of care can co-exist with the statutory functions exercised by the respondents (who were officers of the Department of Social Security) under the Act. He nevertheless proceeded to examine the issue in greater detail. He explained that it was unclear how far the principle enunciated in Scott 2000 extended in relation to duties of officers under the Act generally. He also noted the divergence of views between the majority and Finkelstein J.
3. Gray ACJ explained that the analysis of the statutory provisions was not easy. He said some significance must be attached to the absence of any provision giving protection and immunity to primary decision-makers and Authorised Review Officers when compared with the immunity given to members of the SSAT and the AAT. However, he noted that other provisions in the Act pointed in the other direction.
4. He referred to the considerations mandated by s 1296 of the Act to which the Secretary must have regard in the administration of the Act. He said that no mention was made there of a duty of care in the making of decisions. The emphasis was on the delivery of services in a fair, courteous, prompt and cost efficient manner. His Honour explained that the existence of a duty of care might be inconsistent, in some circumstances, with the establishment of procedures to ensure that abuses of the social security system were minimised. Finally, his Honour referred to s 1296(d) where there is reference to the importance of the systems of review of decisions under the Act. He then said, at [65]:

I have mentioned this system of administrative decision-making, with three levels of merits review, earlier in these reasons for judgment. It is a powerful indication that the legislature did not intend that the correctness of a particular decision should be challenged collaterally in proceedings in a court, such as proceedings for damages for negligence in the exercise of the statutory function. Coupled with the adoption of the satisfaction of the decision-maker as the foundation for a decision to make payments of pensions or other benefits, the system of administrative decision-making with merits review appears to be fatal to the notion that there should be a duty of care. The scheme of the Social Security Act is fundamentally inconsistent with the notion that an unsuccessful claimant for a pension or benefit should be entitled to sue for damages on the basis that the decision to deny the pension or benefit was the result of negligence on the part of the decision-maker. As I have already pointed out, such a claim would require that the court place itself in the shoes of the decision-maker and decide that he or she ought to have been satisfied. It would make the satisfaction of the court, rather than of the Secretary or the delegate, the effective determinant of entitlement.

1. Gray ACJ also referred to the remarks made by Finkelstein J in Scott 2000. He said that Finkelstein J did not refer to s 1296. He pointed to the statement made by Finkelstein J that the Secretary had a duty to ensure that the benefit was paid if an applicant satisfied the necessary criteria. Gray ACJ said this was not an accurate representation of the scheme of legislation. He said, at [66]:

. . . As I have said, it is the satisfaction of the Secretary or the delegate that is the essential requirement before a payment can be made. I consider this to be fundamentally inconsistent with the notion that a court can decide that a claimant ought to have been granted a pension or benefit, so that damages for negligently failing to grant that pension or benefit can be awarded.

1. Gray ACJ found that the applicants in that case were not entitled to bring proceedings based on a common law duty of care.
2. The various decisions dealing with this subject were summarised by McKerracher J in Pickering v Centrelink [2008] FCA 561 where his Honour stated that there was no private right for damages arising from the exercise of administrative powers where there is a statutory right of review. He said, at [16]:

As established in Jones v Department of Employment [1989] QB 1 at pp 22 and 25, where an exercise of statutory power is subject to a right of review and the decision-maker exercises the power in good faith, the exercise of the power will not give rise to a common law duty of care. See also X v South Australia (No 3) [2007] SASC 125 at [189], [196] and Gimson v Victorian WorkCover Authority [1995] VicRp 14; [1995] 1 VR 209. The theory behind this principle is that even if some 'negligence' has been proven, it can be cured by an appeal process. The existence of the appeal process is sufficient to remove reliance on breach of any duty of care.

1. His Honour then summarised the findings made by the Federal Court in Scott 2000 and the Full Court decision in Scott 2003. He also referred to the decision of Heerey J in Wang v Secretary, Department of Employment and Workplace Relations [2006] FCA 898.
2. In my opinion, the decisions I have referred to above make it clear that even if Centrelink officers acted negligently, that is, they did not meet the requisite standard of care, where that can be rectified by one of the three appeal processes available to Centrelink applicants, the Secretary does not owe applicants a common law duty of care. Furthermore, the Act does not provide that the Secretary owes a duty of care to social security applicants.

1. I have found that Mr and Mrs Noureddine obtained the benefit of social security payments to which they were not entitled. Therefore, they owe a debt to the Commonwealth in respect of their overpayments.
2. Mr and Mrs Noureddine's debts are recoverable and the statutory limits regarding recovery do not affect their recoverability. There are no other factors which would make the debts irrecoverable. They cannot be written off.
3. Nor should Mr and Mrs Noureddine's debts be waived. They did not arise solely because of administrative error made by the Commonwealth. Also, the debts should not be waived under the special circumstances provisions. That is because Mr and Mrs Noureddine failed to comply with the Administration Act regarding Centrelink notices.
4. I have also found that no statutory or common law duty of care is imposed on the Secretary in the administration of the Act.
5. I find that the decision made by the SSAT on 26 November 2009 was correct and I affirm that decision.

I certify that the sixty-eight [68] preceding paragraphs are a true copy of the reasons for the decision herein of

Signed: .........(sgd) Elise Montalto...................................

Representative for the Applicant Mr Yassin Noureddine

Advocate for the Respondent Mr Andrew Carson, Centrelink Advocacy Branch