Bramley and Secretary, Department of Family and Community Services

[2004] AATA 462

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 462

ADMINISTRATIVE APPEALS TRIBUNAL

GENERAL ADMINISTERATIVE DIVISION           N2004/339

Re: Christine BRAMLEY

Applicant

And: SECRETARY, DEPARTMENT of FAMILY and COMMUNITY SERVICES

Respondent

DECISION

Tribunal:       P.J. Lindsay, Senior Member

Date:             10 May 2004

Place:            Sydney

Decision:For the reasons given orally at the hearing, the tribunal refuses to extend time for making an application for review of the reviewable decision.

(Sgd) P. J. Lindsay, Senior Member

©        Commonwealth of Australia          (2004)

CATCHWORDS Social Security – extension of time sought under s.29(7 )AAT Act – Family Tax Benefit overpayment – increase of income due to accumulated sick leave lump sum payment – exercise of discretion not exercised – application for extension of time refused.

Administrative Appeals Tribunal Act 1975 ss.29(7), (8)

A New Tax System (Family Assistance) (Administration) Act 1999 ss.7, 95, 97 and 101

Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344

Zizza v Commissioner of Taxation 99 ATC 4,711

Comcare v A’Hearn (1993) 119 ALR 85

Beadle v Director-General of Social Security (1985) 60 ALR 225

Kuljic v Secretary, Department of Social Security (1994) 33 ALD 121

REASONS FOR DECISION

P.J. Lindsay, Senior Member

1.      Centrelink has raised a debt of $2,255.70 against Christine Bramley, the applicant in this matter. Ms Bramley appealed to the Social Security Appeals Tribunal (SSAT) against the decision to impose the debt but did not succeed.   Ms Bramley now applies to the Administrative Appeals Tribunal to review the SSAT’s decision.  The application for review was not received by the Administrative Appeals Tribunal within the required 28 day period starting from the date that Mrs Bramley received the SSAT’s decision.  Mrs Bramley has applied for an extension of time to lodge an application to the Administrative Appeals Tribunal.

2.      The hearing of this matter was conducted by telephone.  The applicant was represented by her husband Graeme Bramley and the respondent by Mr A Zhang from Centrelink. The only issue is whether I should exercise the discretion to extend time for Mrs Bramley’s application for a review of the SSAT’s decision.

3.       Mr Bramley told me that there was no dispute concerning the facts and other background material set out in the respondent’s written submissions. Accordingly I make the following findings:

4.      (a) Mrs Bramley receives Family Tax Benefit.  During the 2002-03 financial year, the amount of Family Tax Benefit was calculated on the basis that Mrs Bramley would receive an estimated $8,000 and her husband $35,000.

(b) On 7 July 2003 the Australian Taxation Office informed Centrelink that during 2002-03 Mrs Bramley’s income was $5,369 and her husband’s was $47,785.  Mr Bramley’s income had increased because he was paid a lump sum of $10,000 in accrued sick leave. Centrelink made a determination that Mrs Bramley had been overpaid Family Tax Benefit in the sum of $2,255.70.

(c)  On 12 December 2003 the SSAT affirmed the decision made by an authorised review officer at Centrelink that an amount of Family Tax Benefit, $2,255.70, had been overpaid to Mrs Bramley.

(d)  The SSAT’s decision was despatched on 23 December 2003.

5.      In evidence Mr Bramley said that the SSAT’s decision was received towards the end of 2003.  He wrote to the Administrative Appeals Tribunal within a fortnight of receiving the decision. He did not hear from the Administrative Appeals Tribunal prior to his family going away on holiday on 10 January 2004.  He was surprised that he had not received a response by the time they returned home around the end of January but thought the delay must be due to the slow down during the January holiday period. He wrote another letter to the Administrative Appeals Tribunal on 17 March 2004 enclosing an application for review of the SSAT’s decision, but the application was out of time and the respondent did not consent to an extension of time.  Mr Bramley’s letter stated the following:

Towards the beginning of June 2003, my employer Integral Energy put forward an offer that all accumulated pre 1993 untaken sick leave could be paid out as a lump sum payment.  As this offer was only going to last till the end of June I quickly decided to make a few enquiries.  I was told by the Pay Office that I would be taxed 50 cents in the dollar on all moneys collected.  But after making further enquiries with my accountant she assured me that I would only pay 30 cents in the dollar tax, as my gross annual salary was under $50,000.

Last year one of my 4 daughters needed extensive orthodontic work and we all know how much they charge.  So I reluctantly decided to collect $10,000 being assured that I would only have to pay $3,000 in tax, which I decided was acceptable under the circumstances.  …

I was astonished to find out from my accountant that she had overlooked the child endowment payments which thus would put my gross yearly income over $50,000 with the sick leave money.  That’s when I felt let down and disappointed in the whole system.  Here I was a hard worker, who had worked all my life, never bludged on the system and thought I was doing the right thing collecting the money, then finding out I was misled and badly treated by people I trusted in.

6.      Both Mr and Mrs Bramley told me that they felt they have suffered a financial detriment through no fault of their own. They acted on the advice of their accountant, which they say has turned out to be wrong and they must repay a debt to Centrelink that would not have come about had they been given accurate advice.

7. Under s.29(7) of the Administrative Appeals Tribunal Act 1975 (the AAT Act), at its discretion the tribunal may extend time for the making of an application for a review of a decision; ss.29(7) and (8) provide:

(7) The Tribunal may, upon application in writing by a person, extend the time for the making by that person of an application to the Tribunal for a review of a decision (including a decision made before the commencement of this section).

(8) The time for making an application to the Tribunal for a review of a decision may be extended under subsection (7) although that time has expired.

The judgment of Wilcox J in Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 summarises the guiding principles for the Tribunal when considering whether to exercise the discretion in s.29(7) of the AAT Act. I am mindful of the Full Court’s caution in Zizza v Commissioner of Taxation 99 ATC 4,711 that the principles are a guide only and ought not be regarded as exhaustive or complete. I will now consider the application of those principles.

8.      Has there been an acceptable explanation of the delay? Although an acceptable explanation for the delay is not a precondition for success, it is expected that normally such an explanation will be given: Comcare v A’Hearn (1993) 119 ALR 85. The applicant has submitted that an application was filed within time, but it must have been misplaced at the Administrative Appeals Tribunal. I have no reason to doubt Mr Bramley’s evidence that he received the SSAT’s decision late in 2003 and then wrote to the Administrative Appeals Tribunal by 8 January 2004. Mr Bramley thought that the matter was being attended to and acted when it was apparent that was not so. I accept, therefore, that there is a reasonable excuse for the applicant’s requiring an extension of time to lodge her application.

9.      Having heard nothing from the Administrative Appeals Tribunal, Mr Bramley wrote again on 17 March 2004, which I am prepared to accept was a timely follow up on his part.  I reject any suggestion that, by waiting until 17 March 2004, the respondent was allowed to believe that the matter was finally concluded.

10.     Any prejudice to the respondent occasioned by the delay is a material factor militating against the grant of an extension. The respondent did not make a submission based on this guiding principle. On the evidence before me, the respondent has not been suffered prejudice due to delay in this matter on the part of the applicant.  It was further established in Hunter Valley Developments that mere absence of prejudice is not enough to justify the grant of an extension.  However, in this matter there is no evidence of established practices becoming unsettled if the application for an extension is successful. 

11. The merits of the substantial application must be taken into account in considering whether an extension of time should be granted. Under s.71 of A New Tax System (Family Assistance) (Administration) Act 1999 (the Administration Act) where a person receives a greater amount of family tax benefit than the amount to which they were entitled, the excess amount is a debt due from the person to the Commonwealth. It is not disputed that, due to Mr and Mrs Bramley’s combined income for 2002-03 exceeding their estimated amount of income, Mrs Bramley was paid more family tax benefit than she was entitled to. The difference in incomes has resulted in a debt of $2,255.70. Section 95 of the Administration Act gives the Secretary a discretion to write off the debt, but the circumstances permitting write off are not present in this matter. The debt, or relevant part thereof, may be waived pursuant to s.97 of the Administration Act where the debt is attributable to administrative error on the part of the Commonwealth. Since it is not suggested that such error exists in this matter, no part of the debt may be waived under that provision.

12.     Receipt of a large sum of approximately $10,000 by way of entitlement to unused sick leave has led to the overpayment of family tax benefit in this matter.  While it may be accepted, without finding, that Mr Bramley may have been given incorrect advice about the income taxation consequences of such a receipt, I find that Centrelink had written to Mrs Bramley on 30 September 2002, 7 November 2002 and 20 May 2003 to inform her that she must tell Centrelink about any changes in her or her spouse’s income.  Those letters referred to checks that would be made with the Australian Taxation Office at year end to ensure that disclosure had been made of the correct amount of the family’s income.  Whether the lump sum was taxable at a concessional rate or at a rate of tax higher than Mr Bramley expected, does not explain away the fact that the family’s taxable income was greater than the amount notified to Centrelink as their estimated income.

13. Section 101 of the Administration Act provides:

The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:

(a) the debt did not result wholly or partly from the debtor or another person knowingly:

(i) making a false statement or a false representation; or

(ii) failing or omitting to comply with a provision of the family assistance law;         and

(b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and

(c) it is more appropriate to waive than to write off the debt or part of the debt.

The circumstances that gave rise to the overpayment were that Mr Bramley received a lump sum amount of income for unused sick leave that had not been taken into account when Mrs Bramley applied for and received family tax benefit. That this amount may have been subject to a greater amount of income tax than expected, is not a ‘special circumstance’ (see Beadle v Director-General of Social Security (1985) 60 ALR 225).  There being no evidence of other financial or family matters that might be termed special circumstances, there is nothing to differentiate this matter from other cases of overpayment. There would be no basis, therefore, for the Secretary to exercise the discretion in s.101 to waive all or part of the debt. I observe at this juncture that Mrs Bramley has being repaying the debt at the rate of $40 a fortnight and the amount now outstanding is approximately $1,600. She and her husband are to be commended for the way they have dealt with a financial responsibility that they believe has been unfairly foisted upon them.

14.     I am mindful that having an arguable case on the merits is but one factor to be weighed up by the tribunal in the exercise of its discretion.  But it is a factor that in this matter I find is particularly significant because if I were to grant leave, I might be seen to be encouraging their spending time and effort on the case and contributing to an expectation of success where that is unlikely.  In this context I note the following passage from Von Doussa J in Kuljic v. Secretary, Department of Social Security

One of the principal considerations to be addressed in deciding whether it

is fair and equitable in all the circumstances to extend time is whether the

merits of the proposed appeal are such that if an extension of time is granted

there is some prospect of success in the appeal.  If a consideration of the

merits indicates that there is no question to be agitated on the appeal, and

there is no prospect of success, it would be futile to grant an extension of

time and most unjust to the respondent to subject the respondent to the costs

of defending a pointless appeal.

15. In deciding whether it is fair and equitable in the circumstances to exercise the discretion in s.29(7) of the AAT Act, I must balance the competing interests of both parties. In doing so, I am not satisfied that it would be fair and equitable to grant Mrs Bramley’s request for an extension of time to allow review of the SSAT’s decision of 23 December 2003. The application for an extension of time is refused.

I certify that the 15 preceding paragraphs are a true copy of the reasons for decision herein of P. J. Lindsay, Senior Member:

Signed:         E Pope
          ..................................................................................……………………………….

Associate

Date of Hearing  10 May 2004

Date of Decision  10 May 2004

Applicant’s representative           Self-represented

Respondent’s representative     Centrelink