Editors --- "Parenting payment debt: qualification for payment; waiver and special circumstances" [2007] SocSecRpr 7; (2007) 9(1) Social Security Reporter, Article 7

• SECRETARY TO THE DEWR and RILEY
• Background
• The issues
• Parenting payment qualification requirements
• Administrative error waiver
• Special circumstances waiver
• Formal decision

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Parenting payment debt: qualification for payment; waiver and special circumstances

SECRETARY TO THE DEWR and RILEY

Decided: 20th November 2006 by B. McCabe and M. Denovan

Background

On 11 April 2003 Riley applied for parenting payment (PP) in respect of her two children. Payments commenced on about 17 April 2003. In about June 2004 Centrelink received an application for family tax benefit from Ryan (Riley’s former partner) who supplied Centrelink with a copy of a Family Court order. This specified that Riley only had care of the children for 24% of the time. On the basis of this information, on 11 February 2005, Centrelink cancelled Riley’s PP and decided the children were no longer PP children of Riley for the purposes of the Act, as of 24 November 2003.

On 29 November 2005Centrelink decided to raise a debt in the amount of $4912.43 in respect of payments made during the period 24 November 2003 to24 June 2004. Centrelink did not raise a debt in respect of the period 25 June 2004 to 28 January 2005 because it had received advice about the shared care arrangements in June 2004 and took no action until February 2005.

Riley appealed to the SSAT which found Riley had 29% care of the children during the relevant period. It concluded Riley was entitled to PP during the period and that the debt which had been raised by Centrelink should not have been raised. The Secretary sought a review of the decision of the SSAT.

The issues

At the AAT both parties accepted that Riley had 29% of the total care of the children for the period in question. The issues were whether Riley was eligible to receive PP during the relevant period; and, if not, whether the debt should be waived.

Parenting payment qualification requirements

The qualification requirements for PP are set out in Part 2.10 of the Social Security Act 1991 (‘the Act’). Section 500(1)(a) requires that a person must have at least one ‘PP child’ in order to qualify for PP.

The definition of a ‘PP child’ is found in ss.500D and 500E of the Act. (The Tribunal noted that those provisions had subsequently been amended.) Section 500D(1)provided that a PP child is one who is a dependant child of the person, and who has not turned 16. A dependant child is defined in subsection 5(2) of the Act - a child is a dependant of an adult person if that adult is:

‘legally responsible (whether alone or jointly with another person) for the day to day care, welfare and development of the young person, and the young person is in the adult’s care’.

The Secretary argued that Riley could not satisfy the definition in circumstances where the children were only with her 29% of the time. The AAT was of the view however, that the wording in the Family Court consent orders, which the Secretary relied upon to cancel Riley’s PP, made it clear that she had a legal responsibility for the children and so s.500D of the Act was satisfied.

The Tribunal found that the children were also dependant children of Ryan during the relevant period, as they were in his care for approximately 71% of the time. Section 500E provided that a child could only be a PP child of one person at any time. Where the Secretary was satisfied a child could be a PP child of two or more adults, the Secretary must make a determination specifying one of the adults as the person in relation to whom the child is to be a ‘PP child’.

Centrelink originally determined the children were PP children of Riley but had changed its mind once it saw the consent orders which said Ryan was legally responsible for the day to day care, welfare and development of the children during the relevant period.

The Tribunal referred to the Departmental Guide to the Social Security Law (‘the Guide’) and in particular to paragraph 3.5.1.50 of the Guide which suggests that when applyings.500(E) the decision-maker should have regard to all the circumstances but emphasises the importance of considering the amount of time the children actually spend in the care of each parent.

Riley submitted that the children should be regarded as her PP children as her need was greater than that of Ryan. Her income in the relevant period was a quarter of Ryan’s income in the same period.

The AAT noted that Ryan spent a great deal more time caring for the children and considered that the reason why he did so was not relevant to the application of s.500E. The Tribunal found that the children were not PP children of Riley during the relevant period. As she did not meet the qualifications for PP the amounts she had received were an overpayment and the amount of overpayment was a debt due to the Commonwealth pursuant to s.1223 of the Act.

Administrative error waiver

The AAT decided that s.1237A(1) of the Act was not applicable as the error arose because Centrelink was not aware of the true situation. The Tribunal was of the view that Riley had not failed to tell the truth: they accepted her evidence that she misunderstood what the consent orders said due to advice given to her by her solicitor. The Tribunal accepted that she was acting in good faith but found that the debt was not solely due to administrative error.

Special circumstances waiver

The Tribunal considered the waiver provisions in s.1237AAD of the Act. The Tribunal accepted that the debt had not arisen partly or wholly due to Riley or another person knowingly making a false statement or knowingly failing to comply with the provisions of the Act.

The Tribunal noted that the term special circumstances was not defined in the Act but it means ‘unusual, uncommon or exceptional’: See Beadle and Director-General, Department of Social Security (1984) 6 ALD 1 at 4. For special circumstances to apply the case must be markedly different from the usual run of cases: see Groth v Secretary, Department of Social Security(1995) 40ALD 541 at 545.

The Tribunal noted that Riley was in difficult financial circumstances but found that her financial position was not that different from other welfare recipients.

The only other matter which was considered in the context of special circumstances was the claim that the original misunderstanding arose as a result of bad advice from her solicitor about the effect of the consent orders. The Tribunal found that there was no evidence suggesting the solicitor was negligent or otherwise failed in his or her duty to keep Riley informed. As both parties accepted that the consent orders merely reflected the reality of the situation, the Tribunal did not think this factor carried a great deal of weight. It found that there were no special circumstances.

Formal decision

The AAT set aside the decision of the SSAT and in substitution decided that Riley owed a debt of PP in the amount of $4912.43 in relation to the period 24 November 2003 to 24 June 2004 and that recovery of the debt should not be waived.

[C.E.]