A woman with several mental and physical ailments has won a two-year battle against Services Australia to clear a $127,000 disability support pension debt.
A tribunal this week dismissed the Department of Social Services’ appeal against a decision to waive the debt and criticised the agency for mistakes that put “additional strain” on her mental health.
The woman, 50, was issued the debt in May 2019 after Services Australia determined she had been incorrectly paid the pension from November 2010 to November 2018 because the agency had not taken into account her partner’s income.
The first tier of the Administrative Appeals Tribunal ruled the debt should be waived in November 2019, but the Department of Social Services chose to appeal against the decision to the general division of the tribunal in a bid to recoup the money.
In a judgment handed down this week, senior member Chris Puplick affirmed the decision to waive the debt and criticised Services Australia for errors it made that contributed to the overpayment.
Puplick waived the debt under a provision in social security law that allows an overpayment to be waived on the basis of special circumstances.
However, he noted that this not only included the woman’s financial and health situation but also Services Australia’s errors.
He said he took into account “the extent to which the errors made by the department have themselves been contributory factors in creating unfair and unintended consequences for the respondent and her husband”.
“What is of course ‘special’, although not necessarily ‘unique’, is that there has been a degree of administrative error by the department and the tribunal accepts that this has contributed to placing the respondent under additional strain and further impacting on her mental health because she has had to deal with the consequences of such an error,” Puplick wrote.
Both the woman and Services Australia accepted that she had been overpaid because her husband earned too much for her to be eligible to receive the disability support pension.
This led to the $120,000 disability support pension debt, as well as three family tax benefit debts worth between $4,500 and $5,300.
The overpayment began, however, because Services Australia had failed to take into account “full and correct information” that the woman’s husband had provided about the couple’s annual income. His income was enough to disqualify her from receiving the payment, but the agency instead used an annual income figure of $40.80.
“There is no logical explanation for how the department manufactured, out of thin air, a combined annual income calculation of $40.80,” Puplick wrote.
Services Australia argued the woman’s husband should have noticed the mistake and “must have realised” that details of his income were important in the determination of the level of payment made to his wife.
The husband, described as a “witness of credibility”, said he might have noticed the $40.80 figure on an initial two-page letter, but if he did he would have assumed that this was some sort of “typo”.
The tribunal acknowledged the woman’s husband had at times failed to or delayed updating his income, which meant the debt could not be waived under a provision that allows waiver for “sole administrative error”.
But it noted later correspondence had recorded the husband’s income correctly, leading him to assume Services Australia had correctly applied the information he provided.
Even after he had provided the new information, Services Australia had failed to cancel the woman’s disability pension anyway, the judgment noted.
Puplick noted the woman had mental and physical aliments that have “a significant impact on her life and ability to function and which, collectively, make her life difficult”.
The woman’s husband, her principal carer, was also seeing a “psychologist for therapy to help him cope with the stresses of his life”.
In scathing comments directed at the agency, Puplick appeared dumbfounded by the administrative errors that led to the overpayment.
These included the department’s failure to take into account the income information the couple provided, its failure to enquire about their income when the couple made contact with the agency, and the fact there was a five-year gap in correspondence between Services Australia and the couple.
Even its letter to the woman in November 2018, informing her that her pension had been cancelled because it had noticed it had not taken her husband’s correct income into account, Services Australia “inexplicably” recorded their combined annual income as $2,338.
“The tribunal cannot understand how such errors occur, nor why it appears that the department expects its clients to understand this either,” Puplick wrote.
The disability pension debt, and the three family tax benefit debts, were all waived by the tribunal.
