Cichero and Secretary, Department of Social Services (Social services second review) - [2017] AATA 66

Cichero and Secretary, Department of Social Services (Social services second review) [2017] AATA 66 (25 January 2017)
Division:GENERAL DIVISION
File Number: 2016/4131
Re:Carolyn Cichero
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Senior Member T. Tavoularis
Date:25 January 2017
Place:Brisbane

The decision under review is affirmed.
.......................[sgd]............................................
Senior Member T. Tavoularis
Catchwords
SOCIAL SECURITY – family tax benefit – late lodgement of claim - late lodgement of tax return – whether an extension of time can be granted – whether “special circumstances” prevented lodgement within time – where applicant did not know of legislative change – where applicant relied on incorrect professional advice – no special circumstances exist – no special circumstances prevented timely lodgement – decision under review affirmed
Legislation
A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) ss 10, 13, 14A
Cases
Hooker and Secretary, Department of Social Services
[2015] AATA 732

Secretary, Department of Social Services and Hollis
[2015] AATA 941

Robson and Secretary, Department of Social Security
[2016] AATA 1012

Groth v Secretary, Department of Social Security
(1995) 40 ALD 54

Angelakos v Secretary, Department of Employment and Workplace Relations
(2007) 100 ALD 9

Wilson and Director-General of Social Services
[1981] AATA 88

Andrews and Director-General of Social Security
[1983] AATA 248
REASONS FOR DECISION
Senior Member T. Tavoularis
25 January 2017
INTRODUCTION

Ms Carolyn Cichero (“the Applicant”) seeks review of a decision dated 5 July 2016 of the Social Security and Child Support Division of this Tribunal (“AAT1”),[1] which affirmed a decision by the Department of Human Services (“the Respondent”) to deny her claim for Family Tax Benefit (“FTB”) for the 2013-2014 financial year on the grounds of late lodgement of the requisite information.[2]
[1] T Documents, T 3, 9-13.
[2] Ibid, T 9, 93.
HISTORY OF THE MATTER
The Applicant and her husband, Mr Martin Cichero, submitted a claim for an annual lump sum payment of FTB for the 2013-2014 financial year on 21 July 2015.[3] This means they had elected to receive this payment as a lump sum at the end of the 2013-2014 financial year, had they been successful in their claim. They had previously claimed FTB for the 2012-2013 financial year.[4]
[3] Ibid, T 7, 31-90.
[4] Ibid, T 6, 29-30.
I note that the Applicant and her husband received notification of a change in the time period in which to submit claims and other relevant documentation for FTB. This notification was provided by way of a letter from the Respondent dated 12 February 2014.[5] They have not sought to contest this. That notification indicated a change in legislation such that applicants for FTB had one year to lodge their claims, instead of two. This applied from the 2012-2013 financial year.
[5] Ibid, T 5, 27-28.
On 19 June 2014, the Respondent notified the Applicant that she needed to lodge hers and her husband’s tax returns before 30 June 2014 to be eligible to claim FTB for that year.[6] I note that in that event, the Applicant did successfully lodge the tax returns before the relevant date for that claim, in accordance with the letter she had received that February.[7]
[6] Ibid, T 6, 29-30.
[7] Ibid. T3, 11, [7].
On 30 June 2015, the Applicant tried to lodge her FTB claim for the 2013-2014 financial year. Unfortunately, there were issues with the electronic lodgement of the form, so she was granted an extension for lodging the form.[8] There are some discrepancies in the evidence regarding the length of the extension; the Respondent claimed it was until 1 July 2015 in a letter dated 10 December 2015,[9] but the Respondent claims it was 21 days.[10] In light of an internal document from the Respondent, which stated a hard-copy claim form had been mailed off,[11] I am inclined to accept that the extension was for at least 21 days. This means that the Applicant lodged her claim forms for FTB in time.
[8] Applicant’s Statement of Issues.
[9] T Documents, T 9, 93.
[10] Applicant’s Statement of Issues.
[11] T Documents, T 11, 102.
However, the Applicant needed to provide to the Respondent more information than the claim forms.[12] Thus, on 21 August 2015, the Respondent notified the Applicant that it was unable to process her claim because she had not provided all relevant documentation (in this case, the income tax returns for her or her husband).[13] The Applicant’s husband did not lodge his tax return until 1 November 2015, and the Applicant did not lodge hers until 6 November 2015.[14]
[12] See e.g. ibid, T 5, 27-28.
[13] Ibid, T 8, 91-92.
[14] Ibid, T3, 10, [6]; Respondent’s SFIC, [9].
On 10 December 2015, the Respondent rejected the Applicant’s application for an extension of time to lodge her and her husband’s tax returns.[15]
[15] Ibid, T 9, 93.
The Applicant applied for review of this decision, and her claim for FTB was correspondingly reviewed by an Authorised Review Officer (“ARO”). The ARO made a decision dated 30 January 2016, rejecting the Applicant’s claim for DSP.[16] Notably, the ARO made the following findings of fact:
[16] Ibid, T 10, 95-98.
Findings of Fact
After careful consideration of the evidence, I have made these key findings:
·Your claim for Family Tax Benefit as a lump sum at the end of the financial year.
·On 12 February 2014 the department sent you a letter which told you “From the 2012/2013 financial year onwards you now have one year instead of two years to: submit a claim for Family Tax Benefit; confirm your income for Family Tax Benefit – this means you and your partner need to lodge your tax returns with the Australian Taxation Office; ensure that your children have met and immunisation or health check requirements for the relevant financial years”. The letter went on to say “If you have not already claimed family assistance payments for the 2012/2013 financial year, and you intend to do so, you will need to submit a claim and confirm your income by 30 June 2014”.
·On 1 July 2015 you contacted the department in relation to claiming the Family Tax Benefit for the 2013/2014 financial year. Due to difficulties you were experiencing lodging your claim, you were granted an extension to lodge your Family Tax Benefit claim ending 28 July 2015.
·You lodged your claim for Family Tax Benefit on 21 July 2015.
·On 21 August 2015 the department sent you a letter advising that the department was unable to complete the assessment of your Family Tax Benefit for the 2013/2014 financial year/ This letter told you that you and your partner needed to lodge your 2013/2014 tax returns with the Australian Tax Office before 30 June 2015.
·On 10 December 2015 the department wrote to you and advised your request for extension of time to confirm your and your partner’s income for the 2012/2013 financial year by lodging tax returns had been rejected.[17]
[17] Ibid, T 10, 96.
The ARO ultimately found that the Applicant had not in fact met the lodgement requirements to be eligible for FTB. She further found that no sufficiently special circumstances existed which prevented her from lodging her and her husband’s tax returns in time, and so which would have allowed her to successfully claim.[18]
[18] Ibid, 96-97.
Dissatisfied with this result, the Applicant sought review of this decision with AAT1. In a decision dated 5 July 2016, AAT1 affirmed the decision under review.[19]
[19] Ibid, T 3, 9-13.
THE LEGISLATIVE FRAMEWORK
As mentioned above, from 1 July 2013, the time for lodging a lump sum claim for FTB for a past period was reduced from two years to one year after the relevant year of claim. Subsections (2) and (2A) of s 10 of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (“Administration Act”) now provide:
(2) A claim for payment of family tax benefit for a past period is not effective if:
(a)the period does not fall wholly within one income year; or
(b)the period does fall wholly within one income year (the relevant income year) but the claim is made after the end of:
(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.
(2A) The further period referred to in subparagraph (2)(b)(ii) must end no later than the end of the second income year after the relevant income year.
Section 13 of the Administration Act relevantly provides that if a claim is not effective, it is taken not to have been made.
Section 14A of the Administration Act provides that a past period claim for FTB is taken never to have been made if the income tax returns of the claimant or their partner are lodged either:
·after the end of the first income year following the past period income year; or
·after such further period as the Secretary allows if the Secretary is satisfied that there are “special circumstances” that “prevented” the claimant from lodging the return before the end of that first income year.
ISSUES FOR CONSIDERATION
In determining whether the Applicant should be taken as having submitted a valid claim for FTB, I must answer the following questions:
(a)Did the Applicant in fact lodge her and her husband’s FTB claim and tax returns for the 2013-2014 financial year in accordance with the relevant time limits?
(b)If she did not, are there “special circumstances” which existed that prevented her from lodging her claim or tax returns by the relevant time limits?
I further note that there is a consensus that the “special circumstances” test requires a two-part approach: first, the Tribunal must determine whether sufficiently special circumstances existed, then whether those special circumstances prevented the Applicant from lodging her claim for FTB and her and her husband’s tax returns in time.[20]
CONSIDERATION
[20] See e.g. Hooker and Secretary, Department of Social Services [2015] AATA 732 (SM Toohey); Secretary, Department of Social Services and Hollis [2015] AATA 941 (DP Humphries); Robson and Secretary, Department of Social Security [2016] AATA 1012 (SM Cotter).
Did the Applicant lodge the relevant information in time?
I begin by noting that the Applicant was validly granted, and complied with, an extension of time for the lodgement of her FTB claim forms. What is in issue is the lodgement of her and her husband’s tax returns, which were not lodged until November 2015, some three months out of time.
Even if I were to consider that the extension of time applied to the tax returns as well as to the FTB claim forms – which I do not – the tax returns were still lodged some two months out of time. Clearly, the first question cannot be answered in the affirmative. I do recognise, however, that because the FTB claim form lodgement was effectively done in time, I only need to consider whether there were special circumstances which applied for the lodgement of the Applicant’s and her husband’s tax returns.
Does the “special circumstances” test apply?
Were there “special circumstances”?
There are several primary grounds upon which the Applicant claims that special circumstances existed:
·that she did not understand the importance of lodging tax returns by a certain date;
·that she wrongly thought that the extension of time she had been granted applied to her and her husband’s tax returns, as well as their FTB claims;
·that that extension clearly ought to have said it only applied for the FTB claim forms, and that an extension ought to have been granted for the same reason for their tax returns; and
·that there were general stresses and life disruptions, largely arising from moving homes a number of times, that impeded on her and her husband’s ability to lodge their tax returns.[21]
[21] Applicant’s Statement of Issues.
For the following reasons, I do not consider that any of the above grounds constitutes “special circumstances”.
“Special circumstances” is not a term that has been defined in the Administration Act. Consequently, it has been extensively unpacked by the courts and by this Tribunal. Its definition can be generally be summarised as “circumstances which distinguish the particular case from others; there must be something that takes it out of the usual or ordinary case.”[22]
[22] Robson and Secretary, Department of Social Security [2016] AATA 1012, [18] (SM Cotter); see also: Groth v Secretary, Department of Social Security (1995) 40 ALD 54; Angelakos v Secretary, Department of Employment and Workplace Relations (2007) 100 ALD 9, [33].
I note that there is a general and long-standing rule that lack of awareness or understanding of a law is not an excuse for an individual’s failure to comply with it, and that such a lack of understanding certainly does not meet the threshold of “special circumstances”.[23] This has significant consequences for the Applicant’s arguments.
[23] See e.g. ibid, [26]; Wilson and Director-General of Social Services [1981] AATA 88; Andrews and Director-General of Social Security [1983] AATA 248.
With respect to her first ground of claiming “special circumstances”, I refer to my above statement – as unfortunate as it may be, not understanding the need for all relevant documents to be lodged in time simply does not meet the threshold and so cannot be considered a special circumstance. Further, the Applicant had been notified by the Department on February 2014 that to make a valid claim FTB, inter alia, “you and your partner (if you have one) need to lodge your tax return/s with the Australian Taxation Office, or tell us that you do not need to lodge a tax return” within one year from the end of each financial year for which she wanted to claim FTB.[24] This letter directly told the Applicant what she needed to lodge, and to whom she needed to lodge it. Any lacuna in the Applicant’s knowledge or understanding therefore ought to rest solely on her shoulders. This is not a special circumstance.
[24] T Documents, T 5, 27.
With respect to the second and third grounds, I note that individual tax returns are lodged with the Australian Taxation Office, not with the Respondent. I further note that from the evidence before me, it appears that the Applicant had partially completed the tax return forms on 30 June 2015, but never submitted them.[25] There is no indication before me that there was any difficulty in lodging those forms online. On the other hand, there was an accepted difficulty with the online lodgement of FTB forms to the Respondent.[26]
[25] T Documents, T 10, 99-100.
[26] Respondent’s SFIC, [35].
Consequently, I see no reason why there should have been a burden on the Respondent to grant an extension of time for the lodgement of her or her husband’s tax returns. Though necessary for the grant of FTB, the lodgement of tax returns is a wholly separate process to the lodgement of FTB claim forms. There is no evidence before me that there was any difficulty with lodging the tax returns online. Rather, it seems to me that the Applicant simply gave up with each process when one failed. Due to the fact that they are separate processes, this was a mistake on her part that there was on onus upon the Respondent to correct. While it was in those circumstances appropriate for an extension to be granted for the FTB forms, it was similarly inappropriate for one to be granted for the lodgement of tax returns that the Applicant had not even tried to lodge. It would be inappropriate for me to find that a reasonable administrative action such as this is a special circumstance alleviating the burden imposed upon the Applicant by her own error.
In any event, the extension of time was only applied for after the relevant lodgement date. The Applicant had already failed to lodge her tax returns in the relevant period when it was granted for her FTB forms. It would be putting the cart before the horse to then find that a failure to grant an extension after the fact had prevented her from lodging the returns.
With respect to the fourth, I simply do not consider those circumstances to be particularly out of the usual. Particularly given there is evidence that the Applicant had at least partially completed the online tax return lodgement forms, and had been able to lodge them in time the previous year, I find the propensity of evidence to weight against these circumstances being special – particularly so special as to prevent the Applicant from submitting her and her husband’s tax returns on time.
Consequently, I do not consider there to have been any “special circumstances” for the purposes of ss 10(2) or 10(2A) of the Administration Act.
Did “special circumstances” prevent the Applicant from lodging the tax returns?
Even if I were to find that “special circumstances” did in fact exist (and I do not), there is still another element to the test the Applicant must show – that the special circumstances prevented her and her husband from lodging their tax returns on time.
I consider that the Applicant also fails on this ground. She waited until the last possible moment, 30 June 2015, to submit the FTB claim forms. At any stage prior to that, she could easily have submitted the tax returns (and indeed the other relevant forms), but she did not. Indeed, she could still have lodged the tax returns after she found she was unable to lodge the FTB claim forms. She simply did not try to.
Consequently, I cannot say that the Applicant was prevented from lodging her or her husband’s tax returns.
CONCLUSION
As the Applicant did not lodge her or her husband’s tax return forms in time, and there were no “special circumstances” which prevented her from lodging those tax returns, by operation of s 13 of the Administration Act, it should be taken not to have been made.
I therefore affirm the decision under review.

I certify that the preceding 32 (thirty -two) paragraphs are a true copy of the reasons for the decision herein of Senior Member T. Tavoularis

.......................[sgd]............................................
Associate
Dated: 25 January 2017

Date of hearing: 16 January 2017

Applicant: In person

Advocate for the Respondent: Ms Maleah Underhill

Solicitors for the Respondent: Department of Human Services

Date of hearing:	16 January 2017
Applicant:	In person
Advocate for the Respondent:	Ms Maleah Underhill
Solicitors for the Respondent:	Department of Human Services