Editors --- "Debt recovery: special circumstances waive" [2005] SocSecRpr 29; (2005) 7 Social Security Reporter, Article 29

• RYDE and SECRETARY TO THE DfaCS
• Background
• Formal decision

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Debt recovery: special circumstances waive

RYDE and SECRETARY TO THE DfaCS

(Federal Court of Australia)

Decided: 28th June 2005 by Branson J.

The DFaCS decided to recover an amount of $845.87 from Ryde as a debt arising from overpayments of widow allowance in the period 3 August2000 to 21 November 2000. Ryde appealed to the SSAT. The SSAT concluded that the period of the overpayments was incorrect and the debt was reduced to$683.07. The SSAT concluded that the debt could not be waived under s 1237AADof the Social Security Act 1991 (the Act). Ryde appealed to the AAT which recalculated the debt and decided that the amount of $777.22 should be recovered.

Background

At the time of the hearing Ryde was 55 years old. She suffered from arthritis in her hands and had high blood pressure. She owned a home in the Philippines which had been valued in 1992 at approximately $680,000.

The decision of the AAT

The AAT reviewed Ryde’s financial and personal circumstances and noted evidence that she was experiencing difficult financial circumstances in Australia and that she was scheduled to have an operation on her eyes in July 2005. Ryde asked the AAT to waive the debt on the basis of possible administrative error or because of the day-to-day hardship she was facing. The AAT did not accept that the overpayments had been the result of administrative error. This aspect of the AAT’s decision was not challenged.

In considering the Secretary’s discretion to waive the right to recover all or part of the debt the AAT said:

As explained in the case ‘Re Beadle and Director General of Social Security’ [1984] 6 ALD 1 [the applicant’s]circumstances must be “unusual, uncommon or exceptional” in order to qualify as “special”. While her circumstances may be difficult they do not differ from those of many income support recipients.

Was a question of law raised by the appeal?

The Court formed the view that the only question of law raised in the appeal was ‘what is the true meaning of the expression “special circumstances (other than financial hardship alone)” in par1237AAD(b) of the Social Security Act 1991(Cth)?’

Consideration of meaning of ‘special circumstances’

The Court considered the decision of the Federal Court in Beadle v Director-General of Social Security [1984] AATA 176; (1985) 60 ALR 225. It also considered the judgement of French J in Secretary, Department of Social Security v Hales (1998)82 FCR 154.

The Court then went onto consider whether the AAT had been correct in its application of s.1237AAD of the Act and in particular in its reliance on the requirement that circumstances must be unusual, uncommon or exceptional to be ‘special’. The Court stated:

The Tribunal probably overstated the significance of the requirement in s.1237AAD (b) for ‘special circumstances’. The Full Court in Beadle did not endorse the view expressed by the Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3 that circumstances are special only if they are ‘unusual, uncommon or exceptional’.

However, the Tribunal concluded that the applicant’s circumstances ‘do not differ from those of many income support recipients’. ... (The Tribunal) is to be understood as having made a judgement that neither hardship nor unfairness made it desirable to waive all or part of the applicant’s debt because the applicant’s circumstances were commonplace rather than special. ... the evident purpose of s.1237AAD is to enable a flexible response to the wide range of circumstances which could give rise to hardship or unfairness, the statutory requirement for ‘special circumstances’ discloses an intention to proscribe waiver in ordinary cases.

Branson J concluded that although the language used by the AAT was ‘somewhat infelicitous’ he was not satisfied that it failed to properly apply s.1237AAD of the Act.

Formal decision

The appeal was dismissed. No order was made as to costs.

[C.E.]