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

[2016] AATA 1065

Finelli and Secretary, Department of Social Services (Social services second review) [2016] AATA 1065 (22 December 2016) 

Division	GENERAL DIVISION
File Number	2016/1747
Re	Gabriella Finelli
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal:Senior Member R W Dunne

Date:22 December 2016

Place:Adelaide

The Tribunal affirms the decision under review.

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Senior Member R W Dunne

CATCHWORDS

SOCIAL SECURITY – family tax benefit – claim for payment of family tax benefit for a past period – whether special circumstances exist to extend the claim period – special circumstances found not to exist – decision under review affirmed.

LEGISLATION

A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) ss 5(1), 7(1), 10(2), 10(2A) and 13(1)

CASES

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

Re Hooker and Secretary, Department of Social Services [2015] AATA 732

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

REASONS FOR DECISION

Senior Member R W Dunne

22 December 2016

INTRODUCTION

1. The applicant in this matter is Gabriella Finelli (previously Centofanti).  The matter concerns a claim by Ms Finelli for family tax benefit (“FTB”). 

2. The applicant is seeking review of a decision dated 9 February 2016 made by the Social Services & Child Support Division of the Administrative Appeals Tribunal (“AAT1”) that she did not make an effective claim for FTB for the 2013/2014 income year and that she should be allowed additional time to make her claim because there were special circumstances that prevented her from doing so within time.

3. At the hearing before me, the applicant was represented by Ms M Riley (from the Welfare Rights Centre) and the respondent (“Centrelink”) was represented by Ms L Odgers (from FOI and Litigation Branch, Department of Human Services).  I admitted into evidence the T documents[1] lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (Cth), together with the following exhibits:

   ·copy of supplementary documents of Ms Finelli;[2]

   ·copy of Centrelink address history for the applicant;[3]

   ·copy of Centrelink claims overview for the applicant;[4]

   ·copy of Centrelink system action record for the applicant;[5] and

   ·copy of Centrelink customer record for the applicant.[6]

   [1] Exhibit R1.

   [2] Exhibit A1.

   [3] Exhibit R2.

   [4] Exhibit R3.

   [5] Exhibit R4.

   [6] Exhibit R5.

   ISSUES FOR THE TRIBUNAL

4. The issues for the Tribunal are as follows:

   (a)Whether the applicant made an effective claim for FTB for the 2013/2014 income year.

   (b)If not, whether there are “special circumstances” that prevented the applicant from making an effective claim for FTB within the required time limit.

   LEGISLATION

5. The legislation that is presently relevant is found within what is often referred to as family assistance law, in particular, the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (“Administration Act”). Subdivision A of Division 1 of Part 3 of the Administration Act deals with the making of FTB claims. Under s 5 of the Administration Act, which is part of Subdivision A, the only way that a person can become entitled to be paid FTB is to make a claim in accordance with that Subdivision. Section 7 of the Administration Act explains that an individual can make a claim:

   (a)for payment of FTB by instalment; or

   (b)for payment of FTB for a past period.  (The reference to “past period” means a prior period in respect of which a person is entitled to make a claim for FTB.)

6. Section 10 of the Administration Act (which is also part of Subdivision A) contains restrictions on claims for payment of FTB for a past period. Section 10 relevantly reads:

   “10  Restrictions on claims for payment of family tax benefit for a past period

   …

   (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.”

   BACKGROUND

7. The applicant is the mother of two young children.  She and her husband separated in December 2012.  In the 2013/2014 financial year she was self-employed, subcontracting to an entity known as Media Make-up.  She had a variable income and did not receive her FTB payments fortnightly.  In September 2014, she started an on-line claim for FTB, but she was unable to complete the claim form. 

8. In November 2014, the applicant contacted Centrelink about parenting payment single (PPS) and there was a discussion about her 2013/2014 taxation return.  She requested an extension of time because the taxation return had not been completed.  On 24 June 2015, a notice of assessment for the year ended 30 June 2014 issued.  The applicant then lodged an actual claim for lump sum payment of FTB in respect of her children for the 2013/2014 financial year on 23 July 2015.  On or about 23 July 2015, a Centrelink officer decided that the claim was not an effective claim as it was not lodged by 30 June 2015. 

9. On 3 September 2015, an authorised review officer affirmed the decision.  Following the decision of AAT1 on review on 9 February 2016, the applicant (through Ms Riley) applied to this Tribunal for further review to allow an additional period to lodge an effective claim for FTB in the special circumstances of the case.

   EVIDENCE OF APPLICANT

10. It was Ms Finelli’s evidence that she was a make-up trainer and subcontracted to Media Make-up for two days each week.  As she was not an employee, she did not receive pay slips.  When she separated from her husband, she lived with her mother.  When her mother died she moved into community unit accommodation.  However, her neighbours were difficult and her mail went missing.  Because of this she, did not receive a letter from Centrelink in February 2014 advising her that the period of time that families had to claim FTB after an income year had been reduced to only one year, instead of two. 

11. The applicant said that on 12 November 2014 she contacted Centrelink about parenting payments single.  Centrelink requested that she provide information about the position of her 2013/2014 taxation return.  She requested an extension of time as her return had not been completed.  The delay was due to her not having sufficient tax information to provide to her accountant.  In relation to making her FTB claim, the applicant said that she often went to the Centrelink on-line site, but her claim would be “timed out”.  She said she could not complete her claim without having filed her taxation return.  However, she confirmed that her 2013/2014 taxation return had been lodged and she had received a notice of assessment from her accountant.  She had lodged her claim form for an annual lump sum payment of FTB with Centrelink on 23 July 2015.

12. The applicant also said that she owned an investment property at Munno Parra with her brother and the property was rented out.  The information relating to the investment property had delayed the lodgement of her income tax return. 

13. When asked about her health at the time, she said that she had become anxious and stressed because of the delay in receiving the FTB.  As a result, she had become depressed and was taking antidepressant medication.  She also had outstanding school fees, and credit card debt of $15,000. 

14. In cross-examination by Ms Odgers, the applicant said she had a lock available to secure the letter box at her unit.  In relation to her FTB claim, she said she started the claim in March 2014.  However, Ms Odgers referred to Exhibit R3 and suggested that the claim for 2013/2014 commenced in September 2014.

    CONSIDERATION

    Did the applicant make an effective claim for FTB for the 2013/2014 financial year?

15. The process and the time limits for claiming FTB have changed over the years.  Originally, in 1999, the time limit to lodge a FTB claim for a past period was one year.  This was amended in 2003 to allow a further 12 months for FTB claimants to lodge a tax return and still be eligible to receive their entitlements.  On 1 July 2013, the time limit was again changed and reduced to 12 months, but the discretion to extend the time limit was re-introduced.

16. Under sub-paragraph 10(2)(b)(i) of the Administration Act, a claim for payment of FTB for a past period is not effective if the period falls wholly within one income year (“relevant income year”), but the claim is made after the end of the relevant income year. In Ms Finelli’s case, she made a claim for a lump sum payment of FTB in respect of her children for the 2013/2014 financial year on 23 July 2015. The claim had to be made by 30 June 2015. In these circumstances, she has not made an effective claim for FTB for that financial year.

    Are there “special circumstances” that prevented the applicant from making an effective claim for FTB within the required time limit?

17. The term “special circumstances” is not defined in the Act, nor is it defined in the Social Security Act 1991.  It is therefore necessary to apply the ordinary meaning of the words used.  Included in the various definitions provided by the Macquarie Dictionary (6^th Edition) for special are “extraordinary; exceptional”.  In my view, these are words that would generally be taken to be synonymous with “special” in the context in which that word is used in the Act.

18. Although it is necessary to be careful not to substitute the words of a statute with other words when interpreting the words used, in Beadle and The Director-General of Social Security[7] the Tribunal there said at [12]:

    “An expression such as ‘special circumstances’ is by its very nature incapable of precise or exhaustive definition.  The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur.  For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases.  This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.”[8]

    [7] (1984) 6 ALD 1.

    [8] (1984) 6 ALD 1 at page 3.

19. The meaning of “special circumstances” for social security law has been considered by Tribunals and the Federal Court on many occasions.  It is an expression “by its very nature incapable of precise or exhaustive definition”.  Clearly, its meaning will depend on the context in which the circumstances occur.  If the context is different, the meaning of special circumstances will be different. 

20. In Re Hooker and Secretary, Department of Social Services[9], the Tribunal there dealt with a late lodged lump sum claim for family tax benefit that was governed by the same provisions of the Administration Act that apply in the present case. Senior Member Toohey said:

    “14.In order for the time for making a claim to be extended, the Secretary (and so the Tribunal) must be satisfied, firstly, that circumstances existed that were special and, secondly, that those special circumstances prevented the claimant from making his or her claim within time.

    ...

    19.… In the case of a late claim for FTB, the special circumstances must prevent a person from making a claim on time.  That is a more stringent, two-part test.” [emphasis added]

    [9] [2015] AATA 732.

21. In Re Secretary, Department of Social Services and Hollis,[10] Deputy President Humphries cited the above extract from the Hooker decision with approval.  He said:

    “30.However, Dr Hollis needs to show more than that the circumstances she faced were special.  In Hooker and Secretary, Department of Social Services [2015] AATA 732 Senior Member Toohey considered the test in s 10(2) of the Act, which imposes a similar test for late lodgement of a claim for family tax benefit to the test in s 49J(2). She observed (at [19]):

    ‘In the case of a late claim for FTB, the special circumstances must prevent a person from making a claim on time.  That is a more stringent, two-part test.’

    31.Thus, in order for the time for making a claim to be extended, the Secretary (and in turn the Tribunal) must be satisfied of two things: first, that circumstances existed that were special and, secondly, that those special circumstances prevented the claimant from making her claim within time.”

    [10] [2015] AATA 941.

    Were Ms Finelli’s circumstances special?

22. As I have said, the meaning of special circumstances for the purposes of social security law has been considered on many occasions.  It is an expression “by its very nature incapable of precise or exhaustive definition” and its meaning will depend on the context in which the circumstances occur.  The circumstances need not be unique “but they must have a particular quality of unusualness that permits them to be describes as special”:  see Beadle and Director-General of Social Security.[11]

    [11] (1984) 1 ALD 6.

23. In giving her evidence (and in submissions Ms Riley put for her), Ms Finelli’s circumstances were these:

    (a)She was unable to complete the Centrelink on-line form for FTB.  The claim form kept timing out.

    (b)She believed she had an extension of time to make a claim.  However, in looking at the T documents,[12] it is not clear whether any extension was granted and whether it related to her claim or to her income tax return.  And it is not clear how long any extension was for.  I find it difficult to believe that Centrelink has the authority or power to grant an extension of time to lodge an income tax return. 

    (c)She had to look after her two young children, she had been working long and irregular hours and she had separated from her husband in December 2012.

    (d)She had health problems caused by (a), (b) and (c) above involving anxiety, stress and depression.

    (e)It appears she had received misinformation from her accountant who had advised her that she would get FTB when she got her tax refund.[13]

    [12] Exhibit R1, page 88.

    [13] Exhibit R1, page 8, paragraph 13.

24. I accept that Ms Finelli’s circumstances might be said to be, in part, unusual.  I also accept that there was a misunderstanding which, at the time, Centrelink did not clarify concerning the need to lodge an income tax return before she would be able to make an on-line FTB claim.  That said, I have difficulty accepting that Ms Finelli’s circumstances are “special” because, when closely analysed and put together, the circumstances are not (in my opinion) such that they take her case out of the ordinary. 

    Did special circumstances prevent Ms Finelli from making her claim on time?

25. There are a number of provisions in social security law concerning “special circumstances”.  For example, a preclusion period following receipt of a lump sum compensation payment may be waived or waived if the Secretary thinks “it is appropriate to do so in the special circumstances of the case”.  Recovery of a debt may be waived “if there are special circumstances” that make it desirable to do so.  In such cases, it is sufficient for the Tribunal to be satisfied that special circumstances exist.  In the case of a late claim for FTB, the special circumstances must prevent a person from making a claim within time.  As Senior Member Toohey found in Hooker, this is a more stringent, two-part test which I believe could be viewed as precedential in cases of this kind. 

26. Even if I accept that Ms Finelli’s circumstances are special, which I am afraid I do not, I am not in any event satisfied that they prevented her from making her claim before 30 June 2015. 

27. After the hearing concluded, the Secretary’s representative provided further documentation which she submitted explained the various claims made by the applicant, and the various payments received by her from 14 March 2013.  Ms Finelli’s representative provided a written response to the effect that the applicant gave evidence that she received no Centrelink payments during the period in question and that this evidence had not been challenged at the time.  For clarification, I should make it clear that nothing contained in the Secretary’s further documentation was of assistance to me in reaching my decision.  The issue in dispute was whether there are special circumstances in Ms Finelli’s case in the relevant period and on the evidence before me, both oral and written, I found that there are not.

    CONCLUSION

28. I have a good deal of sympathy for Ms Finelli. I found her to be an honest and truthful witness. However, the provisions in the Administration Act are strict. For the reasons I have given, I am not satisfied, even if Ms Finelli’s circumstances are special, that they prevented her from making her claim for FTB by 30 June 2015.

    DECISION

29. I affirm the decision under review.

I certify that the preceding 29 (twenty -nine) 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: 22 December 2016

Date(s) of hearing:	1 November 2016
Advocate for the Applicant:	Ms M Riley
Solicitors for the Applicant:	Welfare Rights Centre (SA) Inc
Advocate for the Respondent:	Ms L Odgers
Solicitors for the Respondent:	Dept of Human Services