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

Burgess and Secretary, Department of Social Services (Social services second review) [2017] AATA 525 (21 April 2017)
Division:GENERAL DIVISION
File Number: 2016/2783
Re:Suzanne Burgess
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Member D K Grigg
Date:21 April 2017
Place:Brisbane

The Tribunal affirms the decision under review.
................................[sgd].......................................
Member D K Grigg
CATCHWORDS
SOCIAL SECURITY – family tax benefit – late lodgement of taxation return – failure to lodge income tax returns on time – no “special circumstances” which prevented this occurring – decision under review affirmed
LEGISLATION
A New Tax System (Family Assistance) Act 1999 (Cth) s 58
A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) ss 5, 10, 13, 32A, 32B, 32C
Acts Interpretation Act 1901 (Cth) ss 28A, 29
CASES

Beadle and Director-General of Social Security (1984) 6 ALD 1
Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634

Gammaldi and Secretary, Department of Social Services [2016] AATA 1028
Groth and Secretary Department of Social Security (1995) FCA 1708
Lineham and Secretary, Department of Social Services [2016] AATA 127
Riddell v Secretary, Department of Social Security [1993] FCA 261; (1993) 42 FCR 443
Secretary, Department of Social Security v Hales [1997] FCA 1565; (1998) 82 FCR 154
Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267; [2012] FCA 639
Secretary, Department of Social Security v O’Connell; Secretary, Department of Social Security v Sevel (1992) 38 FCR 540
REASONS FOR DECISION
Member D K Grigg
21 April 2017
INTRODUCTION

Ms Burgess applied for a lump sum family tax benefit (“FTB”) for the 2013-2014 financial year. On 6 November 2015 the Department of Human Services (“Centrelink”) advised Ms Burgess that because she had not confirmed her income for the 2013-14 financial year it was unable to pay her full FTB Entitlement.[1]
[1] Exhibit 1, T Documents, T8, pages 26-27, Centrelink letter re Account payable dated 6 November 2015.
In this instance, to be entitled to FTB, income tax returns for the relevant financial year need to be lodged by 30 June of the following year. That means Ms Burgess needed to lodge her and her husband’s tax returns by 30 June 2015, but they were not lodged with the Australian Taxation Office (“ATO”) until 30 November 2015 and 1 December 2015.[2]
[2] Exhibit 1, T Documents, T12, page 48, Electronic File Notes (Centrelink).
Ms Burgess’ application for an extension of time to meet the legislative timelines was rejected by Centrelink.[3]
[3] Exhibit 1, T Documents, T9, pages 28-33, Letter from Centrelink to Ms Burgess re: Your review outcome dated
3 February 2016.
Ms Burgess argues that special circumstances exist such that an extension of time to lodge her tax returns should have been granted.
For the reasons set out below I have affirmed the decision under review. No special circumstances exist such that the time for the lodgement of her tax return should be extended.
Claim History
Ms Burgess sought a review of Centrelink’s original decision by an Authorised Review Officer (“ARO”). The appeal to the ARO was unsuccessful on the grounds that no “special circumstances” existed to extend the lodgement period for her tax returns.[4]
[4] Exhibit 1, T Documents, T9, pages 28-33, Authorised Review Officer’s letter and decision dated 3 February 2016.
Ms Burgess then lodged an application for review with the Social Services and Child Support Division (“SSCSD”).[5] The SSCSD rejected Ms Burgess’s claim and affirmed the ARO’s decision on 21 April 2016.[6]
[5] Exhibit 1, T Documents, T10, pages 34-35, Letter from Ms Burgess to Centrelink requesting Review dated
4 February 2016.
[6] Exhibit 1, T Documents, T2, pages 3-5, SSCSD’s Decision and Reasons for Decision dated 21 April 2016.
Ms Burgess has sought a review of the SSCSD’s decision by this Tribunal.[7]
[7] Exhibit 1, T Documents, T1, pages 1-2, Application for Review dated 23 May 2016.
ISSUES FOR DETERMINATION
Centrelink advised Ms Burgess on 23 July 2015 that because her tax returns for the 2013-14 financial year had not been lodged by 30 June 2015, she was not entitled to be paid a top-up supplemental FTB. If she had lodged her tax returns on time Ms Burgess would have been entitled to a further $9,406.05 in FTB payments.[8]
[8] Exhibit 1, T Documents, T12, page 46, Electronic File Notes (Centrelink).
The issues for determination are whether or not “special circumstances” exist such that the time for the lodgement of Ms Burgess’ tax returns should be extended.
LEGISLATIVE REQUIREMENTS
Pursuant to the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (“Administration Act”), a valid claim for FTB must be made in accordance with the Act: section 5(1), Administration Act.
If a claim is not effective, it is taken not to have been made: section 13(1), Administration Act.
Relevantly here, section 10(2)(b) of the Administration Act provides that a claim for FTB for a past period is only effective if the claim is made within:
(i)the first income year after the relevant income year; or
(ii)such further period (if any) as the Secretary allows, if the Secretary is satisfied that there are special circumstances that prevented the claimant from making the claim before the end of that first income year.
(my emphasis)
An individual's annual rate of FTB is to be calculated in accordance with the Rate Calculator in Schedule 1: section 58(1), A New Tax System (Family Assistance) Act1999 (Cth) (“Family Assistance Act”).
Section 32A of the Administration Act is entitled “FTB Part A supplement and FTB Part B supplement to be disregarded unless and until individual has satisfied the FTB reconciliation conditions”.
Relevantly here, the FTB reconciliation conditions are satisfied if section 32C is satisfied (section 32B, Administration Act).
Section 32C provides relevantly:
3. The relevant reconciliation time is the time when an assessment is made under the Income Tax Assessment Act 1936 of the first individual's taxable income for the relevant income year, so long as the first individual's income tax return for the relevant income year was lodged before the end of:
(a)the first income year after the relevant income year; or
(b) such further period (if any) as the Secretary allows, if the Secretary is satisfied that there are special circumstances that prevented the first individual from lodging the return before the end of that first income year.
The further period under paragraph (3)(b) must end no later than the end of the second income year after the relevant income year.
(my emphasis)
MS BURGESS’S TAX RETURNS WERE NOT LODGED IN TIME: SECTION 32C(3)(A)
It is not in contention that Ms Burgess and her husband did not lodge their income tax returns within the first income year (that is, between 1 July 2014 and 30 June 2015).[9] They were lodged on 30 November 2015 and 1 December 2015.[10]
[9] Exhibit 2, Secretary’s Statement of Facts and Contentions dated 24 January 2017, para 8.
[10] Exhibit 1, T Documents, T12, page 48, Electronic File Notes (Centrelink).
Therefore, section 32C(3)(a) is not satisfied and it is necessary to consider whether there are any “special circumstances that prevented” Ms Burgess from lodging her tax returns before the end of 30 June 2015.
ARE THERE SPECIAL CIRCUMSTANCES THAT PREVENTED MS BURGESS FROM LODGING HER TAX RETURNS BEFORE THE END OF 30 JUNE 2015 FOR THE PURPOSES OF SECTION 32C(3)(B)?
What does “special circumstances” mean?
The Act does not define what constitutes “special circumstances”.
There has been considerable judicial consideration of the phrase in the context of other social security legislation, for example:
·“Special” denotes something different from the usual or ordinary: Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541, at 545 per Kiefel J (as she then was).
·French J (as he then was) said in in Secretary, Department of Social Security v Hales (1998) 82 FCR 154, at 162:
The concept of special circumstances is broad. A constellation of factors, including financial circumstances, may fall within it. The express exclusion of financial hardship alone as a special circumstance is an indicator that it would otherwise be included. This gives some measure of the range of circumstances which will qualify as special. But as a matter of grammar and ordinary logic, the exclusion of financial hardship alone as a special circumstance does not mandate its inclusion in the range of matters constituting such circumstances for the purpose of enlivening the Secretary's discretion… It is inappropriate to constrain that flexibility by imposing a narrow or artificial construction upon the words. It may be that there will be few cases in which the Secretary will be satisfied that there are special circumstances in the absence of financial hardship. It may be that there are few cases in which having found special circumstances to exist, the Secretary would exercise the discretion to waive in the absence of financial hardship. But to anticipate the limits of the categories of possible cases by imposing on the language of the section a fetter upon its application which is not mandated by its words, is to erode its useful purpose.
·The Full Federal Court in Riddell v Secretary, Department of Social Security (1993) 42 FCR 443 held, at 450:
Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other.
·Jacobson J in Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267; [2012] FCA 639 explained the effect of the authorities as follows [emphasis added]:
[51] ...the phrase “special circumstances”, although lacking in precision, is sufficiently understood as including events or things that render the operation of the statue in a particular case as unfair, unintended or unjust. What is required is something that takes the case out of the ordinary, and unfairness or unintended consequences may show that this exists. Moreover, the circumstances of the case are not confined to matters that are external to the operation of the statutory scheme: see Smith per von Doussa J at 60, 61–62; Groth per Kiefel J at 545, Kertland v Secretary, Dept of Family and Community Services (1999) 95 FCR 64 per Merkel J at 71, 73; Kirkbright v Secretary, Dept of Family and Community Services (2000) 106 FCR 281 per Mansfield J at [22], [26]–[27] and [31]–[32]; see also Secretary to the Department of Family and Community Services v Allan (2001) 116 FCR 1 per Heerey J at [17].
The AAT has also considered the phrase and held that the interpretation in Beadle and Director-General of Social Security (1984) 6 ALD 1, at [12] (i.e. that the circumstances must be unusual, uncommon or exceptional), applies to the Act.[11]
[11]See Hunnibell and Secretary, Department and Community Services [2004] AATA 992, at [19]; Papps and Secretary, Department of Family and Community Services [2005] AATA 660, at [37].
In summary, the circumstances relied upon to be “special” must be unusual, different, uncommon or exceptional.[12]
[12]The core requirement for “special reasons” is that there be something “unusual or different”: French J in Boscolo v Secretary, Dept of Social Security [1999] FCA 106; (1999) 90 FCR 531, at [18]; Barker J in Kazmierczak v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] FCA 1084,
Do special circumstances exist?
The Electronic File Records of Centrelink record that between December 2015 and February 2016 Ms Burgess told Centrelink that:[13]
·she should be considered for a special circumstances extension because she was not aware of the legislation change and the requirement to lodge her tax returns by 30 June 2015, instead of 30 June 2016 (as per the legislation prior to amendment)
·she had had issues with her accountant which had delayed the lodgement of the relevant tax returns
·she had moved from South Australia to Queensland in 2012 and, due to difficulties contacting her accountant in South Australia, had changed accountants. She said it was not until changing accountants that she became aware of the new lodgement timeframes
·she had difficulty complying with the timeframes due to having to prepare multiple tax returns for her business as well as her personal tax returns, moving and starting a new business, and caring for a one year old
[13] Exhibit 1, T Documents, T12, pages 48-52, Electronic File Notes (Centrelink).
In her application for this review Ms Burgess wrote that she:[14]
·“was not in a fit mental state to get [her] tax returns in by their due date”
·“[did not] think that [she] would have been capable of getting it in even if [she] had known the date”
[14] Exhibit 1, T Documents, T1, page 2, Application for Review dated 23 May 2016.
At the hearing before me and in a statutory declaration, declared by Ms Burgess in December 2016, Ms Burgess explained that:[15]
[15] Exhibit 2, Secretary’s Statement of Facts and Contentions dated 24 January 2017, Attachment D, Statutory
Declaration of Ms Burgess declared 12 December 2016.
·She was not aware of when the tax returns had to be lodged and had not appreciated that she would not be eligible for FTB if the tax returns were not lodged on time
·Her family had relocated to Queensland from South Australia at the end of 2012
·She was having a fee dispute with her accountant in South Australia which resulted in her being unable to obtain necessary documents to complete her tax returns
·Towards the end of 2014/early 2015 she was going through a difficult time in her marriage as her husband was often away working and they were fighting a lot
·In March 2015 she discovered that her husband had had an affair
·Between March 2015 and September 2015 she was in a “mental fog” trying to decide whether to stay in the marriage
·She was having difficulties running a small business with her husband
·She was caring for 4 children
·She and her husband had attended two relationship counselling sessions with a family counsellor in April 2015 and October 2016[16]
·She was in such an emotional state between March 2015 and September 2015, given the potential breakdown of her marriage, that she was not capable of attending to the preparation of her tax returns
[16] Exhibit 2, Secretary’s Statement of Facts and Contentions dated 24 January 2017, Attachment E, Letter from
Maxine Giles, Family & Relationship Counsellor, Centacare CQ dated 5 December 2016.
Ms Burgess also relied on a Statutory Declaration provided by her friend Raelene Webb who supported her during her marriage break down.[17]
[17] Exhibit 2, Secretary’s Statement of Facts and Contentions dated 24 January 2017, Attachment F, Statutory
Declaration of Raelene Webb declared 15 December 2016.
Ms Burgess says all of those circumstances, in particular her marriage difficulties, constitute “special circumstances” that prevented her from lodging the relevant tax returns by 30 June 2015.
The Secretary submits that no special circumstances exist and that therefore the discretion in sections 32C(3)(b) and 32D(1)(c)(ii) cannot be invoked.
Lack of Awareness of Legislative Requirements
On 26 March 2015 Centrelink wrote to Ms Burgess advising, among other things, that her tax returns for the 2013-14 financial year needed to be lodged by 30 June 2015 and that if they were not she would not be eligible for any further FTB, including the FTB supplements for the 2013-14 financial year (“Advice Letter”).[18]
[18] Exhibit 1, T Documents, T4, pages 16-18, Letter from Centrelink to the Applicant dated 26 March 2015.
Ms Burgess gave evidence that she did not recall receiving the Advice Letter and said that, at that time, she was going through significant marital difficulties and often did not open any mail she received.
Ms Burgess told the Tribunal that she did become aware her tax returns had to be lodged by 30 June 2015 until December 2015 when she received a letter from Centrelink advising her that she was not entitled to FTB supplements.[19]
[19] Exhibit 1, T Documents, T7, pages 24-25, Letter from Centrelink to the Applicant dated 7 December 2015.
The Advice Letter is deemed to have been served by virtue of sections 28A and 29 of the Acts Interpretation Act 1901 (Cth). Section 29 of the Acts Interpretation Act 1901 (Cth) provides that where an Act authorizes or requires any document to be served by post, the service shall be deemed to be effected by properly addressing, prepaying and posting the document as a letter and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post. There is no evidence that the letters were returned to the Department or any other indication that something had gone awry in their delivery. I therefore find that the letters were sent by normal post to Ms Burgess’ correct residential address. They are deemed to have been received by her in the ordinary course of post.
Even if she was not aware, ignorance of the legal requirements is not a special circumstance. “Centrelink is not required to advise claimants about their legal rights to any particular social security payment or the rate of payment”.[20]
[20]See Milroy and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011]
I find that the state of Ms Burgess’ knowledge of the legislative requirements does not constitute a “special circumstance” that prevented Ms Burgess from lodging her tax returns before the end of 30 June 2015.
Difficulty obtaining Accountancy Assistance
Ms Burgess gave evidence she had a dispute with her accountant in South Australia over an invoice and because she refused to pay he would not release documents that her new accountant in Mackay said he required to prepared her tax returns.
There is no corroborating evidence from either accountant. Further Ms Burgess was unable to explain what documents were held by the South Australia accountant were required by her new accountant.
I also note that this Tribunal has found on numerous occasions that an accountant’s failure to lodge tax returns within time was found to not constitute a “special circumstance” for the purposes of the Act.[21]
[21]Secretary, Department of Social Services and Cannon [2015] AATA 1028; Andre and Secretary, Department of Social Services [2016] AATA 205; Fedigan and Secretary, Department of Social Services [2016] AATA 211; Elrington and Secretary, Department of Social Services [2016] AATA 169; Secretary, Department of Social Services and Bleeker [2016] AATA 290; Secretary, Department of Social Services and Irvine [2016] AATA 306.
Ms Burgess’ also gave evidence that when she found a second accountant in Mackay in or around September 2015 that accountant was able to finalise the tax returns, even though the South Australia accountant had still not provided any documentation.
Ms Burgess also said that between July 2014 to approximately September 2015 she had had no accountant and had not been unable to find anyone to help. Ms Burgess said she was overwhelmed by the need to prepare company tax returns as well as the personal tax returns. It is difficult to accept that accountancy services could not be obtained in this time frame. Further, there is no corroborating evidence of the attempts made by Ms Burgess to obtain the necessary assistance she says she needed.

I find that the evidence concerning the lack of accountancy assistance and the ongoing dispute with the South Australian accountant do not constitute “special circumstances” that prevented Ms Burgess from lodging her tax returns before the end of 30 June 2015.
Marital & Mental Health Issues
The difficulty with assessing the impact on Ms Burgess’ mental health at the relevant time and whether it prevented her from filing her tax returns in time, is that there is no corroborating medical evidence.
Marital issues and busy work and family commitments and the normal vicissitudes of life are not “uncommon”, “out of the ordinary”, or “exceptional” circumstances. They are not, generally, “special circumstances” for the purposes of the Act.
I note the Full Federal Court decision in Secretary, Department of Social Security v O’Connell; Secretary, Department of Social Security v Sevel (1992) 38 FCR 540 where the Court noted that (at p 546):
Given the evident parliamentary intention to protect the interests of dependent children, an interpretation of the Act leading to a loss of allowance by qualified people should be adopted only in the clearest of cases.
However, whilst it is understandable that Ms Burgess was going through a difficult and emotional period between March 2015 and June 2015, having discovered her husband’s infidelity, there is no medical evidence to corroborate that the impact of that occurrence was such that Ms Burgess was not capable of arranging for her tax returns to be completed.
Ms Burgess says she did not seek medical treatment for her mental state at that time because she did not want, and does not agree with taking, medication. However, if she was in such a bad way that her mental state was impacting to such a degree on her ability to think clearly, it is surprising that no treatment or counselling was sought. Further,
Ms Burgess acknowledged she was still able to care for her 4 children at that time and was preparing and lodging business activity statements and providing other bookkeeping assistance for her husband’s business.
In Gammaldi and Secretary, Department of Social Services (Social services second review) [2016] AATA 1028 the Tribunal found that even where the Applicant had had a difficult year, with family health issues, business challenges and increased responsibilities which understandably distracted him from lodging his return by 30 June 2014, these events did not constitute uncommon or unusual occurrences and were not “special circumstances”.
I was also referred by the Secretary to the decision of Lineham and Secretary, Department of Social Services [2016] AATA 127 where the Tribunal was not satisfied there were special circumstances, due to the lack of medical evidence to corroborate that the Applicant’s state of mind was such that it prevented him from lodging his tax return on time.
In Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 Brennan J (as President of the AAT) noted (at 643) that consistency with comparable cases and decisions is “[o]ne of the factors to be considered in arriving at the preferable decision”.[22]
[22] Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 643.
On the available evidence, I am unable to find that Ms Burgess’ marital issues and mental state prevented her from lodging her tax returns before the end of 30 June 2015.
CONCLUSION
Ms Burgess’s appeal fails. No special circumstances exist such that the time for the lodgement of her tax returns should be extended.
The decision under review is affirmed.

I certify that the preceding 53 (fifty-three) paragraphs are a true copy of the reasons for the decision herein of Member D K Grigg

.................................[sgd].......................................
Dated: 21 April 2017

Date of hearing: 13 March 2017

Applicant: By phone

Solicitors for the Respondent: Department of Human Services

at [37].

AATA 488, at [16]; Ivor Biddlecombe and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 451, at [23]; Brian Murphy and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 115, at [17];; Barnard and Secretary, Department of Social Services [2016] AATA 436, at [47]; Scott v Secretary, Department of Social Security [1999] FCA 1774, and on appeal Scott and Another v Secretary, Department of Social Security [2000] FCA 1241.

[2017] AATA 525

21 April 2017

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Appeal

Judicial Review

Procedural Fairness

Statutory Construction

Date of hearing:	13 March 2017
Applicant:	By phone
Solicitors for the Respondent:	Department of Human Services