Brown and Secretary, Department of Social Services (Social services second review)

[2018] AATA 770

Brown and Secretary, Department of Social Services (Social services second review) [2018] AATA 770 (23 March 2018)

Division:GENERAL DIVISION

File Number:           2016/6340

Re:Ellen Brown

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Senior Member R W Dunne

Date:23 March 2018

Place:Adelaide

The Tribunal sets aside the decision under review.

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Senior Member R W Dunne

CATCHWORDS

SOCIAL SECURITY – pensions, benefits and allowances – overpayment – correct entitlement to Family Tax Benefit and Parenting Payment Single – whether excess payments are debts that are recoverable in part or in full – waiver – whether special circumstances exist – decision under review set aside.

LEGISLATION

A New Tax System (Family Assistance) Act 1999 (Cth), s 21, 22, 59

A New Tax System (Family Assistance) (Administration) Act 1999 (Cth), s 71

Social Security Act 1991 (Cth), ss 5, 500, 500D

CASES

Beadle v Director-general of Social Security (1984) 6 ALD 1

Groth v Secretary, Department of Social Security (1995) FCA 1708

Dranichnikov v Centrelink (2003) FCAFC 133

REASONS FOR DECISION

Senior Member R W Dunne

23 March 2018

INTRODUCTION

1. The applicant in this matter is Ellen Brown.  She is the mother of Child N, aged five and Child W, aged three years (“the Children”). 

2. The Tribunal has decided in a separate decision in 2016/6341 that the care of the Children was nil to the applicant and 100% to Mr Spokes from 3 January 2016 and then 100% to the applicant and nil to Mr Spokes from 26 January 2016.  This changed the previous percentage of care on record in relation to the Children for the applicant of 100% care to her and nil care to Mr Spokes from at least 2012. 

3. The change in the care percentage also meant that, while previously the applicant received 100% of the Family Tax Benefit (“FTB”) for the Children from 3 January 2016, her share of FTB was nil and Mr Spokes was 100%.

4. On 26 January 2016 the care changed once more with the applicant resuming 100% care of the children and Mr Spokes resuming nil care.  This meant that the applicant was entitled to receive 100% of the FTB for the Children from 26 January 2016.

5. Initially, Centrelink decided on 1 June 2016 that the applicant had been overpaid Parenting Payment Single (“PPS”) of $6,798.33 for the period 7 January 2016 to 9 May 2016.  Centrelink also decided that the applicant had been overpaid FTB of $3,197.22 for the period 26 October 2015 to 18 April 2016.[1]

   [1] T Documents T4, p13.

6. When the applicant sought review of the decision in paragraph 5 above, an authorised review officer (“ARO”) decided to vary the decision, determining that the applicant had been overpaid FTB of $1,941.94 for the period 26 October 2015 to 18 April 2016 and that she had been overpaid PPS of $535.20 for the period 7 January 2016 to 9 May 2016.

7. The applicant applied to AAT1 for review of the decision referred to in paragraph 2 above.  As that AAT1 decision has been affirmed by this Tribunal, it is now necessary for this Tribunal to review the AAT1 decision made on 20 October 2016. 

8. In the review proceeding before me in 2016/6340 scheduled for 30 January 2018, the applicant was in attendance and the respondent was represented by Ms Odgers, (a Senior Government Lawyer of the Department of Human Services). The T documents lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (Cth) were considered in the course of the proceeding.

   ISSUES FOR THE TRIBUNAL

9. The issues to be decided by this Tribunal are:

   (a)whether the applicant was paid more than her correct entitlement to FTB and PPS; and if so

   (b)whether the excess payments are debts that are recoverable in part or in full.

   LEGISLATION

10. The legislation that is relevant in this case is contained in provisions in the A New Tax System (Family Assistance) Act 1999 (“FA Act”), the A New Tax System (Family Assistance) (Administration) Act 1999 (“Administration Act”) and the Social Security Act 1991 (“Social Security Act”). The relevant provisions are considered below.

    Family Tax Benefit

11. Section 59 of the FA Act provides that where the Secretary has determined a person’s percentage of care of a child, the person’s shared care percentage is as set out in subsection 59(2) of the FA Act. The applicant’s rate of FTB was paid to her on the basis that she had 100% care of the Children throughout the relevant period. On 20 October 2016, AAT1 decided that in the period 3 January 2016 to 25 January 2016 the applicant had nil care of the Children. As a result of the AAT1 decision relating to the applicant’s percentage of care in the period 3 January 2016 to 25 January 2016 the applicant ceased to be eligible for FTB as neither child was an FTB child. Accordingly, the applicant was not entitled to any of the FTB which she was paid in that period.

12. Section 71 of the Administration Act provides that an amount paid to a person by way of FTB where the person was not entitled to the assistance in respect of that period, the amount so paid is a debt due to the Commonwealth by the person. As a result, the Secretary contends that any amount that was paid to the applicant in the period 3 January 2016 to 25 January 2016 in respect of FTB is a debt due to the Commonwealth.

    Parenting Payment

13. A person is qualified for Parenting Payment (or PPS) if the person “has at least one PP child” (paragraph 500(1)(a) of the SS Act).  Relevantly, subsection 500D(2) of the SS Act provides that a child is a PP child of a person if the child is a child of the person, the person is not a member of a couple, the child has not turned 8 years old and the person is the principal carer of the child. 

14. Subsection 5(15) of the SS Act provides that the person is a principal carer of a child if the child is a dependent child of the person and has not turned 16.  Subsection 5(2) of the SS Act provides that a young person who has not turned 16 is a dependent child of another person (the adult) if the adult is legally responsible (whether alone or jointly with another person) for the day-to-day care, welfare and development of the young person, and the young person is in the adult’s care.  Subsection 5(20) provides that the Secretary may make the determination even if all the adults have not claimed a social security payment that is based on, or would be effected by, the adult being the principal carer of the child.  Immediately prior to the period that is the subject of these appeals, it is accepted that the applicant was the principal carer of the children.

15. Given that it was determined by the AAT1 on 20 October 2016 that the applicant did not have any care of the children in the period 3 January 2016 to 25 January 2016, it was open to the AAT1 to find that the applicant was not the principal carer of the Children in that period.  Accordingly, the applicant was not qualified for any PPS in the period 3 January 2016 to 25 January 2016.

16. Subsection 1223(1) of the SS Act provides that if a social security payment (such as a parenting payment) is made and a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit, the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.  Therefore, the Secretary contends that the amount paid to the applicant in the period 3 January 2016 to 25 January 2016 is a debt due to the Commonwealth.  Depending on the decision(s) made regarding the percentage of care of the Children, and who was the “principal carer” of the Children, the entitlements of the applicant to FTB and/or PPS will need to be reconsidered, and any overpayment will result in a debt to the Commonwealth.

17. In relation to the debts for FTB and/or PPS that have arisen to the applicant, both the FA Act and the SS Act contain provisions allowing for waiver where there are “special circumstances”. The Secretary contends that, on the currently available evidence, there are no “special circumstances” which would make it appropriate to waive some or all of any debt resulting from the AAT1 decision.

    ISSUES

18. The issues for the Tribunal to determine are whether there were overpayments of FTB and PPS, and if so are there any of the relevant waiver provisions in the FA Act and/or the SS Act that are applicable?

    CONSIDERATION

19. In the period 3 January 2016 to 25 January 2016 Centrelink paid FTB to the applicant based on her having 100% care of the Children.  However, as AAT1 determined that Mr Spokes had 100% care in this period, the applicant’s entitlement to FTB should have been nil between those dates.  Accordingly, the applicant was overpaid FTB in the period 3 January 2016 to 25 January 2016.  As AAT1 concluded that the Children were not in the applicant’s care for the period 3 January 2016 to 25 January 2016 the overpayments of FTB and PPS required recalculation.  It is understood that the following recalculations have been made:

    ·FTB debt was $1941.94 now recalculated to $718.98.  There is currently $616.77 outstanding on that debt.

    ·PPS debt was $535.20, now recalculated to $1231.16.  There is currently $695.96 outstanding on that debt.

20. It is understood that AAT1 was satisfied that the applicant gave her consent for the Children to leave her care.  Although she wanted the Children returned to her care within a few days, she did not succeed in having the Children returned to her care until 26 January 2016.  AAT1 was satisfied that there was no “written care arrangement” in place and also that the applicant did not take “reasonable care to ensure compliance with a care arrangement”.  As a consequence, AAT1 found that the applicant was not eligible to continue to receive FTB from the date that the actual care changed, that is, from 3 January 2016 until 25 January 2016.  Therefore, the Children could not be considered FTB children of the applicant and she was not entitled to receive FTB for them in the time commencing from 3 January 2016 up to and including 25 January 2016.

21. There was no dispute that the applicant was the principal carer of the Children and had been accepted as such by Centrelink. She qualified for and was being paid PPS. However, when the care of the Children changed and the applicant was no longer the principal carer, AAT1 concluded that she was no longer eligible for PPS in the period 3 January 2016 to 25 January 2016. Because Centrelink continued to pay the applicant PPS in the period 3 January 2016 to 25 January 2016, she was overpaid PPS for that period. Pursuant to subsection 71(2) of the Administration Act, AAT1 was satisfied that the applicant had incurred an FTB debt for the period 3 January 2016 to 25 January 2016. In relation to the PPS overpayment, under subsection 1223(1) of the SS Act, the overpayment became a debt to the Commonwealth and AAT1 was satisfied that the debt was for the period 3 January 2016 to 25 January 2016.

22. AAT1 then considered whether recovery of the FTB debt and the PPS debt on the ground of “special circumstances” under s 101 of the FA Act and s 1237AAD of the SS Act could be waived because there are special circumstances.

    Special Circumstances

23. The expression “special circumstances” is not defined in either the Administration Act or the SS Act. As AAT1 mentioned in its decision, the issue of special circumstances has been considered by Tribunals and the Federal Court on a number of occasions. AAT1 said that, in debt recovery cases, the individual’s circumstances are examined to determine whether they are such that it would be unjust, unreasonable or inappropriate for the debt to be recovered.

24. AAT1 considered the applicant’s circumstances.  She told AAT1 that, at the relevant time she sent the Children to the neighbour’s home just before she was admitted to hospital for mental health issues, she was in a very distraught state.  I noted particularly that she said she was a victim of domestic violence and had suffered many years of abuse.  She stated that she is devoted to her Children and it was only because of her mental health at the time (in January 2016) that the Children were being cared for by Mr Spokes.  She stated that the Children had now been removed from her care and she was missing them very much.  She explained that Mr Spokes had left her with many debts and one was for the removal of his belongings from her house.  Apparently, she is receiving Newstart Allowance, but no PPS and no FTB at the moment.

25. In Beadle v Director-general of Social Security (1984) 6 ALD 1, the Tribunal said that the circumstances must be “unusual, uncommon or exceptional”. In Groth v Secretary, Department of Social Security [1995] FCA 1708, Keifel J (as she then was) referred to a circumstance taking the case out of the “usual or ordinary” case. In Dranichnikov v Centrelink [2003] FCAFC 133, which involved Hill, Keifel and Healy JJ, Hill J said at [66]:

    “… what is required will be circumstances which distinguish the case in consideration from the usual case.  There will be a requirement that the circumstances are such that takes the case out of the ordinary.”

26. In its decision, AAT1 acknowledged that the applicant was suffering significant financial and emotional stress and that her overall health was affected by it and by the absence of her children, in particular. AAT1 accepted that the debts were a burden to the applicant, but it did not consider that the circumstances were such that they would attract the special circumstances waiver in the FA Act and/or in the SS Act.

27. In my view, the applicant’s circumstances at the time the debts arose were such that they took her case out of the usual or ordinary situation, as Keifel J said in Groth.  Moreover, the applicant’s circumstances distinguished her case from the usual case and as such took her case out of the ordinary, as Hill J said in Dranichikov. In my view the applicant’s circumstances were such that they would attract the special circumstances waiver in s 101 of the FA Act and s 1237AAD of the SS Act in relation to the FTB debt and the PPS debt.

28. It follows that the excess payments to the applicant are not debts recoverable in part or in full.

    CONCLUSION

29. In paragraph 19 of these reasons, in relation to the recalculation of the debts:

    (a)There was $616.77 outstanding on the FTB debt.  This debt has been paid in full by the applicant.

    (b)There was $695.96 outstanding on the PPS debt.  This debt has been paid in full by the applicant.

30. Given that I have decided that the applicant’s circumstances are such that they would attract the special circumstances waiver to the FTB debt(s) in the FA Act and to the PPS debt(s) in the SS Act, it seems to me that the applicant’s payments to Centrelink referred to in paragraph 29 are able to be refunded to the applicant.

    DECISION

31. The Tribunal sets aside the decision under review.

I certify that the preceding 31 (thirty -one) paragraphs are a true copy of the reasons for the decision herein of Senior Member R W Dunne

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Administrative Assistant

Dated: 23 March 2018

Date(s) of hearing:	30 January 2018
Applicant:	In person
Advocate for the Respondent:	Ms L-A Odgers
Solicitors for the Respondent:	Department of Human Services