Blanche and Secretary, Department of Family, Community Services and Indigenous Affairs

[2007] AATA 1020

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1020

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2006/1069

GENERAL ADMINISTRATIVE DIVISION		)
Re		LISA BLANCHE

Applicant

And SECRETARY, DEPARTMENT OF FAMILY, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Senior Member M D Allen

Date24 January 2007

PlaceSydney

Decision The decision under review is affirmed.

(Sgd) M.D. ALLEN
  ...........................................
  Senior Member

CATCHWORDS

SOCIAL SECURITY – overpayment of child care benefit – Applicant received a Teacher Training Scholarship increasing her taxable income for the 2004/2005 tax year – entitlement to Child Care Benefit for the 2004/2005 tax year thus reduced – Tribunal found no reason why a debt of $731.21 should not be recovered from the Applicant – decision under review affirmed.

A New Tax System (Family Assistance) (Administration) Act 1999 – sections 71C, 97, 101

Schedule 3

REASONS FOR DECISION

24 January 2007 Senior Member M D Allen

1.      By application made the 18^th day of August 2006, the Applicant sought review of a decision by a Social Security Appeals Tribunal on the 13^th day of July 2006 affirming a prior determination that she had been overpaid the sum of $731.21 in Child Care Benefit and that that amount was to be recovered.

2.      The facts in this matter are straight-forward namely:

(i)        The Applicant, on 17^th July 2003, entered into an agreement with the New South Wales Department of Education, pursuant to which that Department agreed to pay her tuition and course administration fees relating to an Accelerated Teacher Training Program, together with a one off payment for additional costs including textbooks.

(ii)       As consideration for these benefits, the Applicant agreed to serve the Department as a teacher for a period of 36 months following graduation.  Appointment as a teacher was not however guaranteed.

(iii)      The Applicant commenced her Teachers’ Training Course in September 2003 and completed it at the end of the 2004 calendar year.  In 2005 she commenced employment with the Department of Education.

(iv)      The agreement provided that if the Applicant failed to complete the Teachers’ Training Course or did not fulfil the 36 months period of obligation to the Department having completed the course, then she had to repay to the Department the sums expended on her behalf.

(v)       In the 2004/2005 tax year the Applicant received the sum of $1,831.53 in Child Care Benefit.  That sum was assessed on an estimated income of $56,000.00 for the Applicant and $35,000.00 for her partner.  This estimate of income was supplied to the Respondent by the Applicant.

3.      Following a data matching exercise, the Respondent received advice from the Australian Taxation Office regarding the income of the Applicant and her partner for the 2004/2005 tax year.  The Australian Tax Office deemed payments made pursuant to the Teachers’ Training Scholarship received by the Applicant to be a fringe benefit which amounted to the sum of $16,327.57.  This resulted in the Applicant’s taxable income for the period being assessed as $66,987.56.  The net result was that the income received the Applicant and her partner increased from the estimate of $91,000.00 to $104,506.56.

4.      On 20^th August, 2005, using the information it received from the Australian Tax office, the Respondent reconciled the Applicant’s entitlement to Child Care Benefit for the 2004/2005 tax year, and this resulted in a determination that the Applicant had been overpaid $731.29 in Child Care Benefit for the tax year.

5.      On the 12^th March 2006, the Respondent raised a Child Care Benefit debt in the amount of $731.29 against the Applicant.  The said amount is currently being repaid, and no issue was raised in these proceedings as to the calculation of the amount.

6.      With effect from 1^st July, 2000, the payment of Child Care Benefit was made pursuant to the following Act namely A New Tax System (Family Assistance) Act 1999 and A New Tax System (Family Assistance) (Administration) Act 1999.

7.      A person’s “adjusted taxable income” is defined in Schedule 3 to the Family Assistance Act 1999 as being a person’s taxable income plus other specified amounts, minus certain child maintenance expenditure.  In Schedule 3 to the said Act it is stated:

1. Adjusted taxable income relevant to family tax benefit and child care benefit

An individual's adjusted taxable income is relevant to eligibility for, and the rate of, family tax benefit and child care benefit.

2. Adjusted taxable income

(1)  For the purposes of this Act and subject to subclause (2), an individual's adjusted taxable income for a particular income year is the sum of the following amounts (income components):

(a)  the individual's taxable income for that year;

(b)  the individual's adjusted fringe benefits total for that year;

(c)  the individual's target foreign income for that year;

(d)  the individual's net rental property loss for that year; and

(e)  the individual's tax free pension or benefit for that year;

less the amount of the individual's deductible child maintenance expenditure for that year.

The Act also states that “taxable income” has the same meaning as in the Income Tax Assessment Act 1997.

As stated above, the Australian Tax Office assessed the Applicant as having received an amount of $16,327.57 in adjusted fringe benefits during the 2004/2005 tax year and that assessment is not disputed.  Indeed it would not be possible to dispute that assessment in these proceedings.

Section 71C of the Family Assistance Administration Act states inter alia if:

Debts arising in respect of child care benefit where overpayment

If:

(a)  an amount (the received amount) has been paid to a person by way of child care benefit in respect of a period; and

(b)  the received amount is greater than the amount (the correct amount)  of benefit that should have been paid to the person under the family assistance law in respect of that period;

the difference between the received amount and the correct amount is, subject to section 71F, a debt due to the Commonwealth by the person.

8.      Although section 97 of the Family Assistance Administration Act makes provision for the wavier of debts arising solely through administrative error, there were no submissions in this matter that there had been in fact any administrative error.  Likewise, although section 101 of the said Act makes provision for the waiver of debts if there are special circumstances, there were no submissions that any such special circumstances existed in this matter, and the material before me does not raise any such circumstances.

9.      Given all the material before me, I can see no reason why section 71C of the Family Assistance Administration Act should not apply to the Applicant, and as it is incontrovertible that under the current legislation a Teacher Training Scholarship has to be taken into account as a fringe benefit, the decision under review is affirmed.

I certify that the 9 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member M D Allen

Signed:     [Amanda Aitken]            .....................................................................................

Associate

Date/s of Hearing  16 January 2007
Date of Decision  24 January 2007
Representative for the Applicant      Self-Represented 
Advocate for the Respondent          Ms A Garcia, Centrelink Legal Services