Centrelink has lost a bid to chase nearly $45,000 in payments it made in error to a client, after an appeals tribunal disagreed with a government claim she received the money in bad faith.
The Administrative Appeals Tribunal last Friday overturned a decision forcing 41-year-old mother Carly Hockey, who was receiving the family tax benefit and the schoolkids bonus, to pay back the funds after a glitch that saw her overpaid for more than two years.
Officials from the Department of Social Services admitted the mistake was solely Centrelink's as it miscalculated payments due to the Brisbane woman, wrongly estimating she had full care of five step-children instead of half care.
Despite the error, the government told the AAT Ms Hockey had received the money between 2013 and 2016 in bad faith and should pay it back.
It said there was no documentary evidence she had called Centrelink to query the pay increase, and said that in an initial call in 2013 she had likely called about another matter.
Ms Hockey told the tribunal she called the agency in July 2013 after receiving notices recording her payments had grown, but was told her payments were calculated correctly.
An official told her that despite the statement indicating she was registered as having full care of her step children, Centrelink's computer system correctly registered her as having only 50 per cent care, she said.
"We did not hear anything further from Centrelink following my call to them and my concerns about the percentage of care issues and so, at this point, we assumed that there was some sort of glitch in their system that was reflecting an incorrect percentage of care on my letters (as stated in the initial call) and that, as the screens that the officers worked off reflected the accurate percentage of care (i.e. 50 per cent) that we simply carried on as normal," she told the AAT.
"I trusted Centrelink to handle my information correctly and so trusted that we were being paid correctly following my call. I did not understand the increase, however I had not, at any stage, informed Centrelink that the percentage of care had changed for the children."
Centrelink sent her other statements saying it registered her as having full care of her step-children.
She has started paying the $44,700 debt off in $15 fortnightly instalments since the government raised the overpayments in January 2016, and the AAT found no evidence she was not capable financially of paying the money back.
However it disagreed with the Department of Social Services, which was pursuing the debt in the tribunal, that Ms Hockey received the additional money in bad faith. The AAT said records showed she repeatedly contacted Centrelink between 2013 and 2016 providing information about her and her partner's income, and other details.
"It seems unlikely to this tribunal that someone who had such regular contact with Centrelink providing requisite information necessary for Centrelink to calculate her family tax benefit, parenting payment, schoolkid bonus, childcare benefit and childcare rebate would purposely neglect to ensure that her family tax benefit was being calculated correctly. That would seem out of character," the AAT said.
Ms Hockey told the tribunal that when she contacted Centrelink regarding changes in childcare she would always confirm the details it had on its system and was told it indicated 50 per cent shared care of her step-children.
The AAT accepted Ms Hockey's evidence that she was informed that her benefits had been calculated correctly and found she had been "upfront with Centrelink about her situation and regularly provided accurate information".
"There is no evidence that Ms Hockey turned a 'blind eye', nor did she fail to make timely enquiries of Centrelink."
The tribunal's finding that the debt should be written-off follows a blasting it gave Centrelink last year after it found the agency misled a client who was later told she owed $37,000 in debts.
The Department of Human Services overseeing Centrelink said that as the AAT decision was recent, it would not be appropriate to comment on the case.