Editors --- "Parenting payment and family tax benefit debts: waiver, notional entitlement and special circumstances" [2008] SocSecRpr 16; (2008) 10(1) Social Security Reporter, Article 16

• SECRETARY TO THE DEWR and OBERHARDT
• Background
• The issues
• Discussion
• Formal decision

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Parenting payment and family tax benefit debts: waiver, notional entitlement and special circumstances

SECRETARY TO THE DEWR and OBERHARDT

(2008/0085)

Decided: 1st February 2008 by S. C. FIsher

Background

Oberhardt had been overpaid $3261.39 by way of parenting payment and overpaid family tax benefit of $1533.84. Both overpayments were in respect of the period 11 February 2005 to 30 May 2005. The overpayments had been caused by the failure of Oberhardt to notify Centrelink that she no longer had the care of a child under the age of 18 on and from 11 February 2005.

After internal review, Oberhardt appealed both decisions to the SSAT. The SSAT decided to waive recovery of the parenting payment debt but to affirm recovery of the family tax benefit debt.

DEWR appealed the waiver of the parenting payment debt and Oberhardt appealed the recovery of the family tax benefit debt. The AAT heard both appeals together.

The issues

The issues for determination by the AAT in this case were:

· Whether an overpayment of parenting payment for the period 11February 2005 to 30 May 2005 should be waived under section 1237AAD of the Social Security Act 1991;

· Whether an overpayment of family tax benefit for the period 11February 2005 to 30 May 2005 should be waived under s.101 of the A New Tax System (Family Assistance) (Administration) Act 1999.

Discussion

The AAT considered the discretion for the exercise of special circumstances.

After a review of the case authority, the AAT concluded that the clear and ordinary meaning of the words ‘special circumstances’ is the meaning that should be assigned to them. The AAT also reasoned that it was important not to approach ‘special circumstances’ against an a priori set of established factual circumstances or recurring factual patterns which have been recognised in the authorities as supporting or generating special circumstances, or which in fact excludes special circumstances. The AAT went on to state that for any adjudicator to state or conclude that special circumstances precludes the exercise of a power and discretion under relevant provisions of the social security law simply because the circumstances of an income support recipient are commonplace, is to misconceive and misapply the provision.

The AAT first considered Oberhardt’s argument that because she had qualified for disability support pension, which was backdated, the overpayments of parenting payment and family tax benefit should be offset by the notional entitlement to disability support pension under special circumstances waiver.

Noting that the notional entitlement concept appears in s.1237AAC, but is absent from the other debt waiver provisions the AAT summarised the argument for and against the proposition. The AAT stated the argument against notional entitlement was that had the Commonwealth Parliament intended a notional entitlement concept to be invoked in the relevant waiver provisions it could easily have done so. The counter argument was that parliamentary recognition of a notional entitlement specific to s.1237AAC is not intended to exclude it from operating in the context of other debt waiver provisions. After considering the relevant case law, the AAT decided that a notional entitlement basis for special circumstances waiver stood outside the legislative signpost in s.1237AAD. The AAT also considered that it was outside of the preponderance of case law authority.

In any event, the AAT went onto impose a further requirement and stated that if the notional entitlement concept applied in s.1237AAD (which in its view was doubtful) then it must itself come under the ‘rubric of the range of accepted integers of special circumstances’ (para 48). Applying this test, the AAT concluded that the notional entitlement of Oberhardt to disability support pension was not sufficiently unusual, uncommon or exceptional as to justify special circumstances waiver.

The AAT then went on to consider the other circumstances of the case under the framework of special circumstances waiver. In considering this matter, the Tribunal took into account a range of factors including that Oberhardt had experienced neuropsychological malfunctioning in early 2005, she was able to negotiate and liaise with Centrelink during the debt period in relation to rehabilitation, she struggled financially and she was not on the receiving end of some maladministration on the part of Centrelink. The AAT concluded that having regard to the policy that special circumstances debt waiver should be reserved for the truly needy people in desperate financial circumstances or those people whose circumstances are outside of the ordinary run of cases, it decided that the circumstances of Oberhardt were not so special to justify waiver under the applicable debt waiver provisions.

Formal decision

In relation to the parenting payment debt, the decision under review was set aside and substituted with a decision that the Commonwealth was entitled to recover the sum of $3261.39.

In relation to the family tax benefit debt, the decision under review was affirmed.

[G.B.]