Editors --- "Widow allowance debt: waiver, special circumstances and notional entitlement" [2007] SocSecRpr 47; (2007) 9(4) Social Security Reporter, Article 5

• SECRETARY TO THE DEWR and CLARK & BAMBRICK
• The issue
• The law and discussion
• Formal decision

---

Widow allowance debt: waiver, special circumstances and notional entitlement

SECRETARY TO THE DEWR and CLARK & BAMBRICK

(2006/1750)

Decided: 11th September 2007 by A.F. Cunningham

The issue

Centrelink raised a debt of widow allowance of $24,229.95for the period 7 October 2000 to 13 May 2005. The debt had been raised following Centrelink’s decision to assess Clark as a member of a couple with Bam brick. The AAT identified part of the decision of the SSAT that ‘recovery of the portion of the debt that is equivalent to a notional entitlement to NSA be waived from the period 1/1/00 to 13/5/05 pursuant to section 1237AAD of the Social Security Act 1991 (‘the Act’)’ as the issue for determination before the Tribunal. The AAT observed that Clark and Bam brick had maintained throughout that they were not members of a couple and noted that the Tribunal had recently granted Clark leave to file a late application for review of decision by the SSAT which affirmed an earlier finding that she was a member of couple. The AAT accepted the DEWR submission relying on section 41(2) of the Administrative Appeals Tribunal Act 1975 that it would not be open to grant a stay on its own decision in the event that the Applicant succeeded in its current application before the Tribunal.

The law and discussion

The AAT proceeded on the basis that the sole issue for determination was whether the debt should be waived pursuant to s.1237AAD of the Act which states, among other things, that the Secretary may waive the right to recover all or part of the debt if the Secretary is satisfied that there are special circumstances (other than financial hardship alone) that make it desirable to waive the debt.

The Tribunal accepted Clark’s evidence that she did not regard herself as living in a marriage like relationship with Bam brick and found that any representations made by her to Centrelink regarding the status of her relationship were made on the basis of this understanding. The AAT decided that the provisions of sub-paragraph1237AAD(a) were satisfied as there was no evidence that the debt wholly or partly arose from her ‘knowingly’ making a false statement or false representation to Centrelink or failing or omitting to comply with a provision of the Act.

Clark gave evidence of several deaths which still affected her, including the tragic death of her husband which had occurred some sixteen years ago, the death of the father of her daughter who was killed as a result of a gunshot wound when her daughter was four and the recent death of her sister in law which resulted in a murder charge, later reduced to a manslaughter, being laid against a person not identified in the decision. Clark also gave evidence that she was suffering from several medical conditions including a degenerative lumbar back disease, cholesterol and joint problems as well as tendon damage to her foot. She told the Tribunal that she was suffering from depression but had not received any medical treatment for this condition. Clark also said that she had been registered with three job network providers, was regularly looking for work and actively seeking employment.

It was conceded by Clark that the SSAT erred in concluding that a notional entitlement on its own was capable of constituting a ‘special circumstance’ within the meaning of the legislation. However, it was argued that special circumstances should be found in the combination of factors including the types of deaths, their number and the timespan over which they occurred, her health and Clark’s eligibility for newstart allowance.

DEWR argued that the decisions in which notional entitlement had been accepted as a relevant factor in a section 1237AAD waiver, had been decided before the 1996 amendment to the Social Security Act 1991 and that later decisions had made it clear that the concept of notional entitlement is no longer a relevant consideration for ‘special circumstances’.

The Tribunal determined that it was not appropriate to consider notional entitlement as part of the matrix of special circumstances adopting the reasoning in Schulze and SDF&CS (2004) AATA 705 at para 35:

‘Notional entitlement has been found to constitute part of the factual matrix of special circumstances in several cases such as ‘Secretary, Department of Family and Community Services and Leyster (200) 59 ALD587. However, I note that the legislature has seen fit to amend the Act to provide for set off of notional entitlement in the circumstances provided for in s1237AAC. That provision provides for set off of notional entitlement in only very limited circumstances and by reference to specific payments. It was also the respondent’s contention that any attempt to expand notional entitlement by virtue of the special circumstances provision would defeat the intention of Parliament. I think this submission is well founded.....’

The Tribunal also found that there was no conclusive evidence to persuade it that Clark would have been entitled to newstart allowance in any event. The Tribunal noted that pursuant to the relevant statutory provisions, Clark would be required to satisfy the activity test. Relying on the Federal Court decision of Secretary, Department of Employment and Workplace Relations v Kelly (2006) FCA 659,the Tribunal determined that it was not possible for a Newstart Activity Agreement to be made retrospectively.

The Tribunal then considered the other issues argued by Clark as constituting special circumstances and concluded that Clark’s health issues were not particularly unusual or uncommon for a woman of her years. In respect of the three tragic deaths, the Tribunal referred to earlier decisions of Gordon v Secretary, Department of Employment and Workplace Relations (2006) AATA 792, Wood v Secretary, Department of Social Security (1998) AATA 826 and Davey and Secretary, Department of Employment and Workplace Relations (2007) AATA 1114 and concluded that the circumstances of the tragic deaths experienced by Clark considered individually or together did not constitute ‘special circumstances’ that would justify the waiver of a debt in respect of a payment for which a determination had been made that she was not entitled. The Tribunal reasoned that the death of a spouse, albeit in tragic circumstances, was not an unusual or uncommon occurrence and found that there was no evidence that the deaths of the other two persons had any long lasting impact on Clark.

Formal decision

The AAT set aside the decision of the SSAT and reinstated the original decision to raise and recover the overpayment of widow allowance for the period 7 October 2000 to 13 May 2005.

[G.B.]