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Wednesday, 29 November 2000
Page: 20085

Senator CHRIS EVANS (10:40 AM) —I move opposition amendment No. 13:

(13) Schedule 1, page 17 (after line 26), after item 30, insert:

30A Subsection 1237A(1)

Repeal the subsection (including the note), substitute:

(1) Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.

Followers of social security debates in the Senate will be much happier now because I think we are going to have a good old-fashioned argument about this amendment, and civility and agreement will go out the window. Senators behind me were getting concerned that I had lost my touch, moving amendments that the government could agree to, which was ruining my reputation. I understand the government is not going to support this amendment, so we are back to a more natural state of affairs.

This amendment seeks to broaden the coverage of section 1237A(1) of the Social Security Act that deals with the waiver of a debt arising from error. It will ensure that all debts or the proportion of a debt that is attributable to an administrative error are required to be waived if not identified within the specified period. This particular provision has been amended by both the former Labor government and the current coalition government. The last time the issue was discussed, the coalition intended to remove the discretion of waiver. Understandably, individuals receive debts through no fault of their own. Information may have been recorded incorrectly by Centrelink and an incorrect payment may have resulted. In the opposition's view, it would be unfair to raise a substantial debt against these people, given that they received the payments in good faith.

As I understand it, the section requires that such debts be waived if they are not detected within six weeks of the initial incorrect payment. However, for this provision to have effect, the debts must be due solely to administrative error. In essence, an individual cannot be seen to have contributed in some way to the debt, no matter how slight. There are clearly circumstances where that is unfair. An example is where an individual declares earnings which may affect their payment, but they are recorded incorrectly by Centrelink or another agency. This may lead to an ongoing payment of benefit above that to which the person is technically entitled, without the individual noticing that to be the case.

Subsequently, a debt may be raised outside the existing six-week time frame because of the inclusion of the word `solely' in the current waiver provisions. This is the case because a notice may have been sent regarding their payment adjustment and the information used to calculate the changed rate of payment. The receipt of this notice and apparent duty to report the error means that the individual may have contributed to the ongoing overpayment. Thus the debt would not be due solely to an administrative error. The reference to the word `solely' was originally drafted under the Labor administration, but our experience has been that it is proving to be too restrictive. In light of the fact that the coalition have subsequently tightened the section, we believe there is a need to make it fairer.

The change we are proposing will not mean that those who deliberately let an error go unchecked get off scot-free. That is clearly not the intention. The section's reference to the term `received in good faith' will ensure that, where there is a substantial error, there is obviously a reasonable expectation that it would be noticed and Centrelink advised. We believe current case law regarding this provision supports this interpretation. We think this would be a useful addition to protect those persons who incur debts through no fault of their own and that the use of a broader interpretation would provide some relief to those who genuinely are not at fault when incurring debts through overpayments. Experience has shown that this would protect some of those clients who have been getting into difficulty through no fault of their own. We think the interpretation would provide more room for those people's interests to be protected.