Cockbain and Secretary, Department of Families, Community Services and Indigenous Affairs

[2006] AATA 1081

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 1081

ADMINISTRATIVE APPEALS TRIBUNAL      NºW2006/217

GENERAL ADMINISTRATIVE DIVISION

Re:         ELISABETH COCKBAIN

Applicant

And:SECRETARY,

DEPARTMENT OF FAMILIES, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal:       G.D. Friedman, Senior Member

Date:             13 December 2006

Place:            Perth

Decision:The Tribunal affirms the decision under review.

.......[Sgd G.D. Friedman].........
  Senior Member

CATCHWORDS

SOCIAL SECURITY ‑ family tax benefit ‑ overpayment ‑ debt to Commonwealth ‑ waiver ‑ whether special circumstances exist

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

A New Tax System (Family Assistance) (Administration) Act 1999 s 71(2), 95, 97, 101, 105

Groth v Department of Social Security (1995) 40 ALD 541

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

Re Gerhardt and Department of Employment, Education and Training (AAT 10941, 17 May 1996)

REASONS FOR DECISION

13 December 2006  G.D. Friedman, Senior Member

1.      Elisabeth Cockbain received family tax benefit (FTB) for her child Brody (born on 19 October 1990) based on Brody’s earnings as an apprentice chef.  On 9 May 2006 Centrelink decided that she had incurred a debt of $4,802.77 for the period 1 July 2005 to 17 February 2006.  Ms Cockbain claims that the debt should be waived as it was due to an administrative error by Centrelink.   

2.      The issues before the Tribunal are whether a debt to the Commonwealth arises from the overpayment and, if so, whether the debt should be waived.

LEGISLATION

3.      The relevant legislation is the A New Tax System (Family Assistance) Act 1999 (the Act) which provides (in s 21 and 22) that a person can be paid FTB if the person has an FTB child. Section 105 of the A New Tax System (Family Assistance)(Administration) Act 1999 (the FA Admin Act) provides that a re-assessment of family tax benefit may be made on the basis of a person’s actual adjusted taxable income. Section 71(2) of the FA Admin Act provides that an overpayment of family tax benefit may be raised as a debt to the Commonwealth.

WAS THERE AN OVERPAYMENT OF FTB?

4.      Ms Cockbain told the Tribunal that in February 2005 she contacted a Centrelink call centre by telephone on an unrelated matter and told an officer about Brody’s apprenticeship.  She said that she was informed she did not need to contact Centrelink again until his earnings reached $11,233.00.  She said that she estimated that the threshold figure would be reached in February 2006.  Ms Cockbain stated that in a further telephone call in about July 2005 another Centrelink officer gave the same advice, and she had no reason to question the advice because she assumed the officers had access to her file which contained relevant information about her family’s income, and she believed her payments would cease when the threshold had been reached.

5.      Ms Cockbain explained that in February 2006 she telephoned Centrelink because she believed that Brody had reached the threshold, and was informed that she had incurred a large debt because Brody’s income had exceeded the threshold.  She said she was shocked at the news, and has been highly stressed about the events, as she had no intention to mislead Centrelink or to breach social security legislation in any way.  She admitted that in June 2005 when completing her Claim for Parenting Payment she had overlooked three boxes relating to dependent children or students, and said that Centrelink had used information that had been provided previously, and was no longer correct.  She said that her oversight should have been noticed by the Centrelink office in Geraldton, and that a simple telephone call from that office would have clarified the situation and avoided any overpayment.  She said that Centrelink was responsible for the debt, and she should not have to repay it. 

6.      Centrelink records show that Ms Cockbain telephoned on 24 February 2005 and 27 June 2005, although the file notes do not indicate that she provided information about Brody’s earnings.  On 4 July 2005, 13 July 2005 and 10 August 2005 Centrelink sent letters to Ms Cockbain informing her that she must tell Centrelink if, among other things, Brody was no longer a dependent child or received more than $11,233.00 in the current year.  Ms Cockbain said that she probably received the letters, but did not reply because she relied on the advice received by telephone.   

7.      In relation to her family situation, Ms Cockbain stated that she and her partner (Mr T. Daniels) are low-income earners.  She told the Tribunal that she works at a supermarket 20 to 38 hours per week, and her earnings vary.  Brody earns $300 per week after tax and pays $60 per week board.  She and Mr Daniels pay $260 per week in rent, and Mr Daniels is a self-employed truck driver whose earnings vary.  She said that they are in financial difficulty, and Mr Daniels requires medication which costs $110 per month.

IS THERE A DEBT TO THE COMMONWEALTH?

8. The Tribunal finds that Ms Cockbain was overpaid FTB in the amount of $4,802.77 for the period 1 July 2005 to 17 February 2006. Under s 71(2) of the FA Admin Act the Tribunal finds that that this amount is a debt owed to the Commonwealth.

SHOULD THE DEBT BE RECOVERED?

9. Under s 95 of the FA Admin Act the Secretary may decide to write off the debt in certain circumstances. The Tribunal is satisfied that it is cost effective to recover the debt and that Ms Cockbain has the capacity to repay the debt. Therefore, there are no grounds to write off the debt.

10. Section 97 of the FA Admin Act allows for waiver of debts that are solely attributable to administrative error by the Commonwealth. The Tribunal takes into account Ms Cockbain’s assertion that staff at the Centrelink office in Geraldton should have contacted her when they became aware that she had incorrectly completed her application for FTB, particularly as her failure to answer three questions led Centrelink officers to assume that the information held by Centrelink was current. Ms Cockbain had provided her contact telephone number. The Tribunal accepts that she believes that when she contacted Centrelink by telephone the staff should have given her information that was correct in the context of Brody’s situation at the time.

11.     However, FTB payments were based on estimates of income received or expected to be received by Brody, and Centrelink sent at least three letters to Ms Cockbain that included a requirement to inform Centrelink if Brody received income in excess of the threshold amount or ceased to be a dependent child.  As Ms Cockbain conceded, she did not respond to the letters.  For these reasons the Tribunal finds that the debt was not attributable solely or exclusively to administrative error by the Commonwealth (Re Gerhardt and Department of Employment, Education and Training (AAT 10941, 17 May 1996). Hence the waiver provision under s 97 of the FA Admin Act is not applicable.

12. Section 101 of the FA Admin Act allows for waiver of a debt due to special circumstances and provides:

“101.    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 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.”

13. The Tribunal accepts Ms Cockbain’s evidence that she did not knowingly fail to meet her obligations under the legislation or knowingly make false statements. She therefore meets the criteria in s 101(a) of the FA Admin Act.

14. In respect of s 101(b) of the FA Admin Act, the Tribunal notes that in ReBeadle v Director-General of Social Security (1984) 6 ALD 1, it was held that the special circumstances must be unusual, uncommon or exceptional so as to distinguish the case under review from the usual case.  In Groth v Department of Social Security (1995) 40 ALD 541 the Federal Court held that special circumstances would require something to take the case …out of the usual or ordinary case.

15.      The Tribunal takes into account Ms Cockbain’s personal and family circumstances, including her financial situation and the income received by herself and Mr Daniels.  The Tribunal finds that Ms Cockbain’s personal circumstances are difficult.  However, she receives remuneration for part-time employment.  Brody works and contributes $60 per week in board, and Mr Daniels is a self-employed truck driver who receives income on a somewhat irregular basis.  On balance the Tribunal is not satisfied that the situation in which she finds herself is vastly different from that of other social security recipients who have received overpayments.  The Tribunal is not satisfied that her circumstances constitute special circumstances (other than financial hardship alone). Hence, the waiver provisions of s 101 of the FA Admin Act do not apply.

DECISION

16.The Tribunal affirms the decision under review.

I certify that the sixteen [16] preceding paragraphs are a true copy of the reasons for the decision of:

G.D. Friedman, Senior Member

......[Sgd S da Motta]..........................

Date of hearing:  7 December 2006

Date of decision:  13 December 2006
Advocate for applicant:                Self‑represented
Advocate for respondent:            Ms M. Conlon, Centrelink