A woman saddled with a $36,000 Centrelink debt will have part of it waived after a tribunal found the government welfare agency had mixed up her ex-husband's taxable income and his after-tax income.
The single mum-of-three, known just as MZNK, was previously married to a man who received compensation payments after a workplace injury in 2000.
She had received a parenting payment and then Austudy in the period from April 2007 to March 2013. Centrelink determined in August 2013, after a data-matching review, that MZNK had been overpaid for most of this time due to incorrect recording of her then husband's payments.
But in a decision handed down on Monday Administrative Appeals Tribunal (AAT) member Dr Ion Alexander ruled part of the debt was solely due to Centrelink's mistake, and sent it back for the department to recalculate.
MZNK and her ex-husband separated in June 2014 and divorced two years later. She told the AAT she and her three kids had suffered "significant domestic violence" during the 16-year marriage, including physical, emotional, and financial abuse.
"She stated that whenever she attended Centrelink she was always accompanied by her husband who, without showing her, filled out all forms and provided all information about his income," Alexander's decision reads.
The law says that any part of a debt that is solely caused by a Centrelink error must be waived if the person received it in good faith.
A document tendered to the AAT hearing, showing the ex-husband's compensation payments before and after tax, revealed that Centrelink appeared to have been counting his smaller after-tax income as his larger taxable income, resulting in the overpayments.
The evidence demonstrated Centrelink had been regularly informed of changes to MZNK's ex-husband's income, but it's unclear how it actually received that information, Alexander found.
"There is no evidence of any documents being viewed or considered and no indication as to the basis of the regular recording of taxable income, which was clearly incorrect," he wrote.
But, Alexander ruled, it was ultimately Centrelink's bad.
"The regular failure to recognise the difference between taxable income and after-tax income, in my view, is an administrative error that can be attributed solely to Centrelink."
He also hit out at the delay in stopping payments once Centrelink knew MZNK was being overpaid.
"It is unclear why it took 15 months to finalise the matter, during which time [MZNK] continued to receive payments, unaware of an increasing debt."
An earlier decision on MZNK's debt – before the now-disbanded Social Security Appeals Tribunal (SSAT) – found she had difficulty understanding the amount of her husband's weekly income, but had tried her best to provide accurate details.
"The SSAT finds without hesitation that neither [MZNK] nor anyone else knowingly made any false statement to Centrelink that gave rise to the debt, notwithstanding that her income estimates under-declared [her ex-husband’s] income," that decision said.
The debt will now go back to Centrelink for reconsideration.
MZNK has been paying back the debt in instalments of $20 per fortnight, taken out of her current social security payments.