Flanagan and Secretary, Department of Family and Community Services

[2006] AATA 193

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 193

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2005/477

GENERAL ADMINISTRATIVE  DIVISION		)
Re		PETER FLANAGAN

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Ms N Bell, Senior Member

Date6 March 2006

PlaceSydney

Decision

1.      The decision that family tax benefit was payable to Mr Flanagan for his children, for the period 1 July 2003 to 30 June 2004, on the basis of 79% shared care of his sons and 85% shared care of his daughter is affirmed.

2.      The decision that family tax benefit was payable to Mr Flanagan for his sons, for the period, from 1 July 2004, on the basis of 78% shared care is affirmed.

3.      The decision that Mr Flanagan had a shared care percentage of 22% in respect of his daughter from 1 July 2004 is set aside, and instead, the Tribunal decides that Mr Flanagan had 78% of the shared care of his daughter from 1 July 2004 to 15 September 2005.

4.      The decision that Mr Flanagan incurred a debt of $1,098 to the Commonwealth due to overpayment of family tax benefit for the period 1 July 2003 to 30 June 2004 is affirmed.

5. The decision that there is no basis for waiver of this debt under Sections 87 or 101 of the A New Tax System (Family Assistance) (Administration) Act 1999, is affirmed.

.....................[sgd]....................

Ms N Bell  Senior Member

Administrative

ADMINISTRATIVE APPEALS TRIBUNAL )                    No N2005/477

GENERAL ADMINISTRATIVE DIVISION )

Re:Peter Flanagan

Applicant

And:Secretary, Department of Family and Community Services

Respondent

ORDER TO AMEND WRITTEN DECISION [2006] AATA 193

TribunalMs N Bell, Senior Member

Date9 March 2006

PlaceSydney

WHEREAS:

1.The Tribunal released a written decision in this matter, which was dated 6 March 2006.

2.It has come to the Tribunal’s attention that there was an error in the decision.

3.The Tribunal wishes to amend the written decision so as to rectify this error and wishing to do so with the least cost and inconvenience to the parties, applies the provision of section 43AA of the Administrative Appeals Tribunal Act1975.

now the tribunal orders that the decision should read as follows:

In the Tribunal’s Decision insert new paragraph 3 as follows:

3.  The decision that Mr Flanagan had a shared care percentage of 22% in respect of his daughter from 1 July 2004 is set aside, and instead, the Tribunal decides that Mr Flanagan had 78% of the shared care of his daughter from 1 July 2004 to 15 September 2004.

In the Tribunal’s Reasons for Decision alter paragraph 25 as follows:

Delete the words “15 September 2005” and insert the words “15 September 2004”.          

..........................................
  Ms N Bell
   Senior Member

SOCIAL SECURITY – Family Tax Benefit – Review of Percentages of Care – Tribunal Found Percentage Care of Daughter Incorrect - Debt Raised Due to Overpayment – Debt Should Remain – No Basis For Waiver

A New Tax System (Family Assistance) (Administration) Act 1999

REASONS FOR DECISION

6 March 2006 Ms N Bell,  Senior Member           

6.Mr Flanagan has three children who have been principally in his care since 31 March 2002.  He was granted family tax benefit for his three children in May 2002.

7.On 4 August 2004 Ms Shiel, the children’s mother, claimed an annual lump sum payment of family tax benefit for the 2003/2004 financial year.  Ms Shiel provided Centrelink with a copy of a Family Court Order dated 24 June 2003 which stated that the children were to live with their father (Mr Flanagan) but have prescribed contact with their mother.

8.On the basis of the Family Court Order Centrelink calculated that Ms Shiel had 21% of the shared care of their children for the 2003/2004 financial year and 22% for the 2004/2005 financial year.

9.On 4 August 2004 Mr Flanagan notified Centrelink that his daughter Karina had been “stolen” from his care on 10 June 2004.

10.Centrelink notified Mr Flanagan of this change to calculation of entitlement of family tax benefit together with a calculation that Mr Flanagan could not be paid family tax benefit in relation to Karina because it had been fourteen weeks since she had left his care.  On 1 September 2004 Mr Flanagan advised that the court orders were not being complied with and he provided diary entries to show Karina had not visited her mother on a number of appointed days in June 2004.

11.Centrelink varied its decision by changing the family tax benefit percentage for Karina from 79% to 85% for the 2003/2004 financial year and to 78% for the two boys from 1 July 2004 and 78% for Karina from 1 July 2004 to 16 September 2004.

12.Following the adjustment of Mr Flanagan’s entitlement a debt of overpayment to him was raised in the sum of $1,098.

13.The Social Security Appeals Tribunal affirmed Centrelink’s decisions in relation to percentage shared care for the three children for the 2003/2004 financial year and for the two boys from 1 July 2004 but substituted a decision that Mr Flanagan’s care for Karina from 1 July 2004 was 22%.  The Social Security Appeals Tribunal also affirmed the decision to recover the debt of $1,098.

14.Mr Flanagan does not dispute the calculation of the percentage shared care. However, I note that Section 23 of the A New Tax System (Family Assistance) Act 1999 preserves a person’s qualification for family tax benefit for up to fourteen weeks where the parent is taking reasonable steps to regain care of the child who is out of his care without his consent. Centrelink considered Mr Flanagan had been endeavouring to enforce the Family Court Order which required Karina to reside with him. I agree. Mr Flanagan should have the benefit of Section 23 for the period 1 July 2004 to 15 September 2004 and his percentage share during that period should be 78%.

recovery

15.Section 97 of the Family Assistance Administration Act provides;

Waiver of debt arising from error

(1) The Secretary must waive the right to recover the proportion (the administrative error proportion ) of a debt that is attributable solely to an administrative error made by the Commonwealth if subsection (2) or (3) applies to that proportion of the debt.

(2) The Secretary must waive the administrative error proportion of a debt if:

(a) the debtor received in good faith the payment or payments that gave rise to the administrative error proportion of the debt; and

(b) the person would suffer severe financial hardship if it were not waived.

(3) The Secretary must waive the administrative error proportion of a debt if:

(a) the payment or payments were made in respect of the debtor's eligibility for family assistance for a period or event (the eligibility period or event ) that occurs in an income year; and

(b)the debt is raised after the end of:

(i) the debtor's next income year after the one in which the eligibility period or event occurs; or

(ii) the period of 13 weeks starting on the day on which the

payment that gave rise to the debt was made; whichever ends last; and

(c) the debtor received in good faith the payment or payments that gave rise to the administrative error proportion of the debt.

(4) For the purposes of this section, the administrative error proportion of the debt may be 100% of the debt.

16.Mr Flanagan gave clear, consistent evidence of having attended the Gosford Centrelink Office with a copy of the Family Court's Order of 24 June 2003 which indicated he did not have 100% care of his children.  This evidence was supported by Mr Flanagan’s contemporaneous diary records.  I accept this evidence and consequently consider that Centrelink was on notice of the shared care arrangements and its payment to Mr Flanagan at 100% was in error.  There is no evidence of Mr Flanagan having contributed to this error.  It follows that the overpayment to him was attributable solely to an administrative error made by the Commonwealth.  There is no question as to Mr Flanagan receiving the payments in good faith.  I accept his evidence that he was unaware of the possibility of shared care arrangements, and, with the children residing with him he had no reason to expect to receive less than 100% of the payments.

17.It remains to consider whether Mr Flanagan would suffer severe financial hardship if the debt were not waived.

18.Mr Flanagan gave evidence that he secured full time employment in September 2005 and now earns $670 net per week.  In addition to rent, food and usual household expenses he pays approximately $80 per week for before and after school care.  Mr Flanagan said he owes approximately $2,000 to his mother who paid his Family Court legal fees and $1,500 on a credit card, used by him to meet a number of basic expenses before he obtained full time employment.  He described his current circumstances as much improved. 

19.Prior to obtaining full time work, however, his circumstances were very difficult.  He described having to use his credit care to meet basic expenses, resulting in the debt he must now repay; being unable to pay an electricity bill and having to turn to the Good Samaritans to make the payment for him; the high cost of petrol and the difficulty of driving to or part of the way from Terrigal to Camden to facilitate the children visiting their mother; inability to meet school related payments for excursions and fees; being dependent on his mother, whose own resources were limited, for payment of his Family Court legal fees of some $3000 and for food and clothing for the children; having the telephone disconnected and having to rely on a rarely used mobile phone for emergency purposes for the children.

20.A weekly budget prepared by Mr Flanagan shows that, during the time before he obtained full time work, after meeting essential payments for food, rent, utilities, petrol and credit card payments, there remained a sum of $6 per week to be applied to clothing, car repairs, other loan repayments and incidentals.  The overpayment debt was being repaid by withholdings of $10 per fortnight and was fully discharged by the application of $868 of his family tax benefit supplement of $1390.79 for the 2005 reconciliation.

21.I agree that, prior to Mr Flanagan obtaining full time work, his financial circumstances were very difficult indeed.  Being unable to pay an electricity bill, having the telephone disconnected, being unable to meet school related expenses amounts to circumstances which are very straightened.  However, I also note that Mr Flanagan had some assistance from his mother, who I accept, could barely afford to give him that assistance, and was able to extinguish the debt by the application of his family tax benefit supplement.  His circumstances are now tight but neither straightened nor severe.

22.While Mr Flanagan’s circumstances were very difficult, there is, unfortunately, nothing unusual, exceptional or uncommon about them. The debt has been fully recovered by small withholdings and the application of a lump sum and his circumstances, through his own hard work, have improved. I do not consider that the discretion under Section 101 to waive the debt should be exercised.

Decision

23.The decision that family tax benefit was payable to Mr Flanagan for his children, for the period 1 July 2003 to 30 June 2004, on the basis of 79% shared care of his sons and 85% shared care of his daughter is affirmed.

24.The decision that family tax benefit was payable to Mr Flanagan for his sons, for the period, from 1 July 2004, on the basis of 78% shared care is affirmed.

25.The decision that Mr Flanagan had a shared care percentage of 22% in respect of his daughter from 1 July 2004 is set aside, and instead, the Tribunal decides that Mr Flanagan had 78% of the shared care of his daughter from 1 July 2004 to 15 September 2005.

26.The decision that Mr Flanagan incurred a debt of $1,098 to the Commonwealth due to overpayment of family tax benefit for the period 1 July 2003 to 30 June 2004 is affirmed.

27.The decision that there is no basis for waiver of this debt under Sections 87 or 101 of the A New Tax System (Family Assistance) (Administration) Act 1999, is affirmed.

I certify that the 27 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Bell, Senior Member

Signed:         ...........[Linda Blue]...................................
  Associate

Date of Hearing  13 January 2006
Date of Decision  6 March 2006 
Solicitor for the Respondent     Centrelink, Legal Services