Craufurd; Secretary, Department of Family and Community Services

[2004] AATA 553

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 553

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          N2003/1316

GENERAL ADMINISTRATIVE DIVISION		)
Re		SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Applicant

And CAITLIN CRAUFURD

Respondent

DECISION

Tribunal M.A. GRIFFIN, Member

Date31 May 2004

PlaceSydney

Decision The Tribunal sets aside the decision under review and substitutes therefor the decision that a 'top-up' of Family Tax Benefit cannot be paid to Ms Craufurd for the 2000/2001 financial year.

[Sgd] M.A Griffin, Member

CATCHWORDS

SOCIAL SECURITY - family tax benefit - income tax return not lodged by the particular time - entitlement limited to amount received - no provision for 'top-up' payment - decision set aside

A New Tax System (Family Assistance) (Administration) Act 1999 s16, s17, s28

Baronessa and Secretary, Department of Family and Community Services [2003] AATA 1276

Beaton and Secretary, Department of Family and Community Services [2003] AATA 809

Pamplin and Secretary, Department of Family and Community Services [2003] AATA 1248

REASONS FOR DECISION

31 May 2004 M.A. GRIFFIN       

1.      This is an application to review a decision of the Social Security Appeals Tribunal (“SSAT”) dated 28 July 2003 which set aside a decision of the Secretary to the Department of Family and Community Services (“the Department”) that Ms Caitlin Craufurd, was not entitled to a "top up" payment of Family Tax Benefit (FTB) for the tax year ended 30 June 2001. 

2. At the 29 March 2004 hearing, Ms Craufurd represented herself. Mr George Lozynsky, an advocate with Centrelink represented the Department. The Tribunal received into evidence the documents lodged under s37 of the Administrative Appeals Tribunal Act 1975 (T1-T22) and a bundle of documents exhibited as A1 for the Department.

BACKGROUND

3.      During the financial year of 2000-2001, Ms Craufurd received fortnightly instalments of FTB based on an estimated combined income for herself and her partner. On 24 April and 4 June 2002 Centrelink wrote to Ms Craufurd informing her that payment of any arrears of FTB could be made only if she and her partner lodged tax returns for 2000/2001 by 30 June 2002 (T3 & T4).  On 12 June 2002, Ms Craufurd’s partner advised Centrelink by phone that he would lodge his tax return as soon as possible (T5).  Ms Craufurd’s partner’s tax return was lodged after 30 June 2002 (T12).

4.      The couple’s actual combined income for the year ended 30 June 2001 was less than the estimate on which the FTB instalments were calculated.  On 3 June 2003, the Department determined that as the tax return had not been lodged by 30 June 2002, Ms Craufurd was not entitled to the difference of $4,759.10 as a "top up" of FTB (T8). On 19 June 2003 an ARO affirmed that decision (T13). The SSAT set aside that decision, finding that Ms Craufurd was entitled to receive the ‘top-up’ payment.

EVIDENCE

5.      Ms Craufurd said she and her partner had always over-estimated their income so that they would not incur a debt at the end of each financial year. Ms Craufurd explained that she is an artist and her partner is a musician and that it is very difficult to predict their incomes. Ms Craufurd said they had grossly over-estimated their income for this particular year. Ms Craufurd said the tax return was delayed unavoidably due to the death of their accountant. Ms Craufurd said she did not receive the 24 April 2002 letter from Centrelink. Ms Craufurd said she did receive the 4 June 2002 letter and that prompted her partner’s 12 June 2002 telephone call to Centrelink advising that the tax return would be lodged as soon as possible.

6.      Ms Craufurd said the tax return was delayed because the widow of their deceased accountant who was also his partner in the accountancy business had so much extra work to do. A letter from the accountant confirms this evidence (T12).

7.      Ms Craufurd was asked about a Centrelink record of the 12 June 2002 telephone call from her partner which reads, in part, “Ptr [partner] has advised tax return is being lodged asap I have warned that if their returns are not finalised by 30062002 they cannot be paid a top up if they were entitled to one”. Ms Craufurd said it was not made clear to her partner that their payments would be affected. She said “If it had been made clear we would have gone to our accountant and got it put in as soon as possible”.  Ms Craufurd said she had been told by friends that there are legal cases which support her entitlement to the ‘top-up’ payment.

CONSIDERATION OF THE ISSUES

8. Section 28 of the A New Tax System (Family Assistance) (Administration) Act 1999 (“the Act”) provides:

“28(1)  This section applies if:

(a)a determination under section 16 or 17 is in force at, or was in force before, a particular time; and

(b)there are one or more days (the cancellation days) before the particular time in respect of which the following conditions are satisfied:

(i)the cancellation days occur in the income year (the cancellation income year) that began 2 years before the beginning of the income year in which the particular time occurs;

(ii)the claimant is entitled to be paid family tax benefit under the determination for the cancellation days;

(iii)the claimant, or the claimant’s partner at the particular time (if he or she was also the claimant’s partner at some time in the cancellation income year), or both, are required to lodge an income tax return for the cancellation income year but have not done so by the particular time;

(iv)by the particular time, an assessment has not been made under the Income Tax Assessment Act 1936 of the taxable income for the cancellation income year of everyone to whom subparagraph (iii) applies.

Consequence of section applying

28(2)If this section applies, the Secretary must vary the determination so that it has the effect that the claimant is not, and never was, entitled to family tax benefit for the cancellation days.

Consequence where income tax returns are later lodged

28(3)    If:

(a)after the Secretary varies the determination under subsection (2), an assessment is made under the Income Tax Assessment Act 1936 for the cancellation income year for everyone:

(i)who was required to lodge an income tax return as mentioned in subparagraph (1)(b)(iii); and

(ii)in respect of whom an assessment had not been made before the determination was varied; and

(b)the Secretary is satisfied that the claimant was eligible for an amount of family tax benefit for the cancellation days;

the Secretary must again vary the determination so that it has the effect that, for the cancellation days, the claimant is entitled to be paid the lesser of:

(c)that amount of family tax benefit; and

(d)the amount that the claimant was entitled to be paid before the variation under subsection (2) was made.”

9. Section 16 of the Act deals with the determination of instalment entitlement claims and section 17 of the Act deals with the determination of past period entitlement claims.

10.     The SSAT considered these provisions and decided that “Section 28 does not apply in this case because by June 2003, when the determination under section 17 was made, Mrs Craufurd’s former partner had lodged his tax return” (T2, f.10). I am satisfied that this finding is incorrect. The Centrelink records in evidence show that a determination pursuant to section 16 of the Act was made with effect 1 July 2000 for instalment payments to be made fortnightly during the 2000/2001 financial year. There is no past period claim determination pursuant to section 17 for the relevant period. The claim for that period had already been determined in advance and instalment payments made accordingly. As a consequence, section 28 of the Act must apply.

11.     The Tribunal has considered the effect of this legislative scheme on previous occasions, see Re Beaton and Secretary, Department of Family and Community Services [2003] AATA 809, Pamplin and Secretary, Department of Family and Community Services [2003] AATA 1248. In Re Baronessa and Secretary, Department of Family and Community Services [2003] AATA 1276 at paragraph 5, Senior Member Pascoe had this to say about the relevant section:

“5.  Section 28 of A New Tax System Family Assistance (Administration) Act 1999 (the Act) is quite clear that:

·where a person has received FTB;

·the person or their partner is required to lodge an income tax return for the year ended 30 June 2001;

·the person or their partner has not lodged such return by 30 June 2002;

·no income tax assessment has been made by the Commissioner of Taxation by 1 July 2002; and

·the return is lodged after 30 June 2002

the person is entitled to the lesser of the entitlement to FTB based on the actual taxable income for the year ended 30 June 2001 or the total instalments actually received.”

12.     In reviewing the facts of that particular matter the Senior Member said at paragraph 7:

“While having considerable sympathy for the position in which Mrs Baronessa has found herself, the legislation is clear and contains no discretion to provide a "top up" payment in any circumstances, no matter how special, where an income tax return is not lodged by 30 June 2002. The clear words of s28 of the Act result in the entitlement to FTB for the year ended 30 June 2001 being limited to the amount of $5,792.95 actually received with no entitlement to any "top up" payment.”

13. With respect I agree that the effect of section 28 is as described in Re Baronessa above. I have considerable sympathy for the position in which Ms Craufurd finds herself. Ms Craufurd was an impressive witness and I accept that she was honest and genuine in her dealings with Centrelink and not at fault in relying upon her accountant. Nevertheless, I am satisfied there is no discretion available to this Tribunal in the interpretation of the legislation and that a payment of ‘top-up’ of FTB cannot be made to Ms Craufurd.

DECISION

14.     The Tribunal sets aside the decision under review and in substitution therefor decides that a lump sum of family tax benefit is not payable to Ms Craufurd for the 2000/2001 tax year.

I certify that the 14 preceding paragraphs are a true copy of the reasons for the decision herein of M.A. GRIFFIN

Signed: A. Krilis                   Associate

Date/s of Hearing  29 March 2004
Date of Decision  31 May 2004
Representative for the Respondent          Self
Advocate for the Applicant            Mr George Lozynsky