Decision: The Tribunal affirms both decisions under review.

SOCIAL SECURITY - age pension - overpayments and debts - income and work bonus - casual work and variable earnings - fault in online reporting system and payslips provided later - payment date a day after pay period - no carry over of accumulated work bonuses - anomaly of hybrid reporting system - debt correctly calculated and no special circumstances for waiver - possibility of applying under compensation scheme for defective administration - decisions under review affirmed

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted from this decision and replaced with generic information pursuant to subsection 201(1A) of the Social Security (Administration) Act 1999.

1. Mrs Peverill is a 74 year-old widow who receives age pension (AP) and is employed as [an Occupation 1].
2. On 12 July 2024, Centrelink decided that Mrs Peverill had been overpaid AP in the sum of $319.24 during the period 23 May 2024 to 19 June 2024 (the first debt period). On 31 October 2024, Centrelink decided that Mrs Peverill had been overpaid AP in the sum of $416.82 for the period 10 October 2024 to 23 October 2024 (the second debt period). On both occasions debts were raised and Centrelink sought recovery of the overpayments. Both debts were affirmed by a Centrelink authorised review officer (ARO) following internal review on 22 November 2024.
3. On 6 March 2025, Mrs Peverill applied to this Tribunal for external review of both debts.

1. The statutory provisions relevant to this review are set out in the Social Security Act 1991 (the Act).
2. Pursuant to sections 55 and 210 of the Act, the rate of AP is worked out in accordance with Pension Rate Calculator A in section 1064 of the Act. Pension Rate Calculator A contains an income test (Module E). Under this income test, during the first debt period, there was an income free area of $190 for a single person. Income up to this amount had no effect on the rate of AP. Each dollar of income above $190 reduced the rate of AP by 50 cents. The effect of the income test is that no AP was payable once fortnightly earnings exceeded $2,318 for a single person. During the second debt period, the income free area was $212 for a single person, which meant that AP ceased to be payable when fortnightly earnings exceeded $2,500.
3. Provisions relating to a work bonus are set out in Division 1AAA of the Act. In accordance with these provisions, a person in receipt of AP has an amount of $300 credited to their work bonus balance each payment fortnight, up until there is a balance of $11,800, when credits cease. When a person in receipt of AP reports fortnightly earnings, the work bonus balance is used to offset earnings for the purposes of the income test.
4. Under section 1223 of the Act, when a person is paid any amount of a social security payment that they were not entitled to receive (whether because of lack of qualification or lack of payability), this amount is a debt due to the Commonwealth. Under section 1229A of the Act, if a person is notified about a debt and the person fails to make a repayment arrangement by the day the debt is due, an interest charge can be added to the debt.
5. Under section 1236 of the Act, a debt can be written off if it is not recoverable in law or not recoverable for other reasons, or where the debtor has no capacity to pay. Under section 1237A of the Act, Centrelink may waive its right to recover a debt if the debt arose solely as a result of administrative error and was received in good faith. Waiver under section 1237A is not available if the debt is raised within 6 weeks of the first payment giving rise to the debt. Under section 1237AAD of the Act, Centrelink may waive its right to recover a debt in special circumstances, but only if the debt did not arise wholly or partly from a person knowingly making a false statement or representation, or failing to comply with a reporting requirement. Under section 1237AAD, financial hardship alone is not a special circumstance.
6. The issue which arises in this case is whether Mrs Peverill has AP debts that must be recovered in full.

(i) The documents provided by Centrelink as evidence it relied on when making the original decision and at the time of the internal review (the hearing papers).

(ii) Sworn evidence and oral submissions provided by Mrs Peverill during telephone hearings on 18 June 2025 and 23 June 2025.

(iii) Written submissions and additional evidence provided by Mrs Peverill.

1. Centrelink's position, as set out in the ARO's decision statement, is that Mrs Peverill had earnings from her [Occupation 1] work that were not taken into account during the two debt periods. As a result, she received overpayments of AP. These overpayments were debts, pursuant to section 1223 of the Act. The ARO found that the overpayments were not caused solely by administrative error and there were no special circumstances. This meant that recovery of the debts could not be waived, and Centrelink was required to recover them in full.
2. During the hearing, Mrs Peverill told me that she believed that both debts had been wrongly calculated. She said that, with respect to the first debt, she had not been credited with a work bonus for that payment fortnight. She drew to my attention a discrepancy between the work bonus balance as reported by the ARO and the work bonus balance at page 44 of the hearing papers. Mrs Peverill said that there was a three-week period at the time of the first debt when she was unable to report earnings in the usual fashion and had instead subsequently provided payslips. Mrs Peverill told me that there appeared to be a fault in the online reporting system because neither the Centrelink app, nor the website allowed her to report her earnings in the usual way. She said that with respect to the second debt, she believes that this arose because she provided payslips in an attempt to get Centrelink to understand how the application of payslips yields a different entitlement to that which results from application of the online or app-based reporting system. She said that when she reports her fortnightly earnings online or via the app, she provides them in respect of the fortnight during which she receives her two weekly payments. However, payment receipt is a day after the payment week. This means that when Centrelink goes back and applies payslips it yields a different amount to what she has reported.

Does Mrs Peverill have AP debts that must be recovered in full?

1. I note that the B193563 hearing papers document (at page 44) work bonuses for the period when Mrs Peverill submitted that either a bonus had not been recorded and/or a bonus balance had been depleted in error. These documents show fortnightly credits of a work bonus of $300 but no carry over of accumulated work bonuses, as these had been exhausted when applying the income test. When I directed Mrs Peverill's attention to this evidence, she said that she was confident that she had a work bonus buffer that was sufficient to preclude any debt during the first debt period and that the difference between the date she was paid and the earning period specified on her payslips must be the reason why the work bonus was exhausted. She also pointed out that the ARO had indicated work bonus balances that should have been sufficient.
2. I found Mrs Peverill to be an impressive witness. She has an auditing background and a sharp eye. She is also understandably distressed that her conscientious reporting of earnings should result in a debt. As she pointed out during the hearing, her earnings are somewhat variable week to week, and she does not know what she has earned until she receives her payment advice. I note that Mrs Peverill also provided a letter from her employer explaining the weekly pay period and payment date.
3. However, I am not satisfied that Centrelink has erred in calculating Mrs Peverill's AP entitlement using information contained in her weekly payslips. This may result in discrepancies between what Mrs Peverill would usually report as she receives her weekly pay after the week in which it is earned. However, it is consistent with the proper application of the income test. Mrs Peverill submitted that the "letter of the law" requires that Centrelink applies income to the AP payment fortnights in the income payments were received. However, it is my view that Centrelink is entitled to use payslips to assign income to the fortnights in which the income was earned.
4. I can see how the application of the payslips could also affect the depletion of Mrs Peverill's work bonus balance so that the buffer ceases to operate prior to what would be the case given her income reports. I am of the view that the ARO provided a satisfactory explanation of how Mrs Peverill's earnings, based on her payslips, depleted her work bonus balance, as compared with the status of this balance when it was determined in accordance with her reported earnings.
5. While this is an unfortunate and possibly unfair anomaly of the reporting system, it does not void Centrelink's debt calculation, which appears to be sound.
6. Mrs Peverill submitted that the second debt arose because income she reported was effectively double counted as a result of Centrelink applying her payslips to this payment period, instead of applying her reported earnings. She said that this occurred because she took in her payslips in an attempt to explain how the application of the payslips yielded an income that differed from the amount that she was required to report.
7. Given Mrs Peverill's evidence, the debt would appear to be an unfortunate by-product of her attempt to remedy the first debt. However, for the reasons outlined above, while the outcome might be anomalous, it does not follow that the debt has been wrongly calculated.
8. I am therefore satisfied that both debts have been lawfully determined and I must affirm both. This means that the remaining issue is whether these debts must be recovered in full.
9. I am satisfied that the debts are recoverable, which means there is no basis for writing off either debt.
10. Section 1237A can only be applied to waive recovery of a debt if the overpayments were due solely to administrative error and were received in good faith. I am not satisfied that there is a basis for me to make such findings. While, for reasons that I have outlined above, the reporting system can yield anomalies when payment entitlements are reviewed, having regard to payslips, the reason for the overpayments was that the income used by Centrelink to pay her age pension during the debt period did not accord with her actual earnings during the pay period. While there may be some inherent problems with the income reporting regime, it is not clear that these are avoidable. I am not satisfied that they are administrative errors. At most they are systemic problems and they are not the specific administrative errors that can warrant the application of section 1237A of the Act.
11. Full or partial waiver of recovery is also possible if there are special circumstances that make waiver desirable. Special circumstances are not defined in the legislation, but there is substantial case law that establishes that special circumstances must be unusual, substantially beyond the control of the debtor(s) and such as to make it unreasonable or unfair to fully recover the debt(s). The legislation specifically excludes financial hardship alone as a special circumstance, but it can be taken into account when there are also other special circumstances. When considering whether waiver of recovery is desirable, the starting point is that the overpayments are public funds and there is a general expectation that debts will be recovered in full. In other words, the special circumstances must be such as to outweigh the public interest in full recovery.
12. Mrs Peverill outlined her circumstances. She is a widow who continues to undertake casual [Occupation 1] work, partly because it helps with her finances and partly because it keeps her connected to the community. I am not satisfied that there is anything remarkable about her personal circumstances. There is nothing especially unusual about the circumstances that gave rise to the debt. Rather they appear to be inherent in the hybrid system Centrelink uses to determine entitlements under the income test. As a general rule the hybrid system will not disadvantage payment recipients and, in this case, it is not clear as to the extent to which Mrs Peverill has been disadvantaged. While I accept that difficulties can arise when the two approaches are combined, this would not be especially unusual and appears to be inherent in the payment system.
13. Overall, I am not satisfied that special circumstances are established in this matter. This means that I cannot apply section 1237AAD to waive recovery of part or all of either debt.
14. It follows that both debts must be recovered in full.
15. While the social security law does not avail Mrs Peverill of a remedy, it remains open to her to seek compensation under the Scheme for Compensation for Detriment caused by Defective Administration (the CDDA Scheme). This scheme is administered by the Department of Finance and is not within the jurisdiction of this Tribunal. It would be a matter for the Department of Finance to determine whether the kind of systemic difficulty outlined above amounts to defective administration that has caused detriment to Mrs Peverill. Mrs Peverill can obtain further information about the CDDA Scheme online or by approaching Centrelink.