When Cassandra Clark received a letter from Centrelink in October 2018, she was shocked to find a $26,000 debt notice.

Key points:

  • Cassandra Clark has been claiming Centrelink benefits to support her son, who has special needs
  • Centrelink said she was not reporting her husband’s income correctly and sent her a $26,000 debt notice
  • Ms Clark took her case to the Administrative Appeals Tribunal and won, but now Centrelink is appealing the decision

“To hear that there’s a debt that has accrued over a five-year period, that actually was like a punch in the stomach,” she told 7.30.

“I keep hearing, ‘Don’t worry, you can just pay $20 a fortnight out of your payments that you receive for your son.’ OK, well there’s the next 90 years.”

In 2013, Ms Clark began receiving Family Tax Benefit and a carer payment. The carer payment was to support her son, who has special needs.

She began reporting her husband Roger’s income from his small business as a pest controller but received different indications from Centrelink about how and when she should be reporting this income.

“I would say it was quite confusing and frustrating at an already really stressful time as well, because we had a lot to deal with at that time,” she said.

But the letter she received in October 2018, told her that she had not been correctly reporting income for her carer’s payment — she was required to report her income twice to different parts of Centrelink.

“So that in itself was a big surprise to me that there were two separate reporting entities,” Ms Clark said.

“That hadn’t been clearly explained to me at the very beginning … when we applied for our son’s carer’s payment.”

‘Why would they still be chasing us?’

Roger Clark said it was difficult to watch Cassandra struggle with the case.(ABC News: Jerry Rickard)

Ms Clark was determined to fight the debt. She launched a case in the Administrative Appeals Tribunal, arguing that she had done everything she was told to do.

“I really questioned, really questioned why this debt accrued to begin with, what are we doing wrong?” she said.

“We’ve always been upfront and honest, sometimes to our detriment as well.”

The letters she received from Centrelink appeared to show that she had reported her husband’s income correctly. Centrelink argued that in the fine print of some of the letters she received that she should have been put on notice about declaring her husband’s income for each type of payment.

Just before Christmas last year, the AAT ruled in her favour. It found the error was “solely due to administrative error on Centrelink’s part”.

It went on to say that any indication of the error “were indistinct to the degree that no reasonable layperson would understand from them that the income Mrs Clark declared was not considered when calculating her carer payment”.

It found she was unaware of the overpayments and that she accepted them in good faith.

“It was like an elephant got off my chest and walked off for the first time,” Ms Clark said of the decision.

But Ms Clark’s relief was short-lived. In January this year, just days before the pandemic reached Australia, Centrelink launched its own appeal of the decision to the general division of the Administrative Appeals Tribunal; a more technical and complex forum for hearing cases.

“I was back to being devastated again. Back to that sick feeling in my stomach,” she said.

“I reasoned, well, OK, if I’d lost we would have had the chance to appeal that. So I was trying to be reasonable.

“But all the while thinking, why would they still be chasing after us?”

Getting legal help

Cassandra Clark says she went “back to being devastated again” when Centrelink appealed the AAT decision.(ABC News: Jerry Rickard)

As the pandemic took hold in Australia earlier this year, Mr Clark said he found it difficult to watch his wife struggle with the weight of the case.

“Seeing that, all these things come out, all these different emotions that she was going through … it broke us both,” he said.

He starting searching online for legal aid services in New South Wales, and reached out to the Welfare Rights Centre in Sydney.

“She came to us with a $26,000 debt and had no idea over a period of five years that she was being incorrectly paid,” Katherine Boyle, the centre’s director, told 7.30.

Ms Boyle began assisting the family two months ago and says she sees these types of debts far too often.

She says they are often the product of a confusion around Centrelink reporting obligations and poorly worded letters. She says they also disproportionately affect women.

“One part of Centrelink’s system is not talking to the other part of Centrelink’s system, and as a result, these debts go on for many, many years,” she said.

There’s a history of Centrelink cases like these. Letters that are so confusing that they can lead to debt waivers, known in legal circles as “Tomlin Letters”, named after an earlier 2017 case.

‘We really need to see a change’

Cassandra Clark hopes her case will make things easier for others in similar situations.(ABC News: Jerry Rickard)

Earlier in the pandemic, the Government announced a pause on a range of debt recovery activities Centrelink were undertaking.

Ms Boyle said she was surprised it had appealed the debt in Ms Clark’s case, which has now been running throughout the pandemic.

“During this time, there’s been a lot of recognition from the Government that families need support,” she said.

“And yet in this particular case, they’ve chosen to litigate the debt and to appeal it.

“I don’t believe that the Government is behaving as a model litigant. I don’t think this is the right time to be pursuing debts through the tribunal.”

The Department of Social Services instructs Services Australia in cases involving Centrelink debts.

In a statement, a Services Australia spokesman told 7.30 it would not comment on individual cases.

“It is important to note that anyone who receives Government support needs to provide information to support their continued eligibility for payments,” the spokesman said.

“Services Australia always acts in accordance with the model litigant policy.

“The appeal of a debt decision to the AAT does not prevent the pausing of debt repayments.”

The case remains ongoing at the Administrative Appeals Tribunal. The Clarks are determined to keep fighting the debt but worry that many others may find themselves in a similar situation.

“We really, really need to see a change,” Ms Clark said. “Someone needs to make it a little bit easier, a little bit more user friendly, for everybody.”

Watch this story tonight on 7.30.


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