FULLER and SECRETARY, DEPARMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
[2010] AATA 822
•25 October 2010
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2010] AATA 822
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2010/0302
GENERAL ADMINISTRATIVE DIVISION ) Re HAYLEY FULLER Applicant
And
SECRETARY, DEPARMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
And
YVETTE ASHENDEN
Other Party
DECISION
Tribunal Dr M Denovan, Member Date25 October 2010
PlaceBrisbane
Decision The Tribunal:
(1) Sets aside the decision of the Social Security Appeals Tribunal (“SSAT”) which extended the period of debt from 24 October 2007 to 27 October 2008, and substitutes its decision that the period of family tax benefit (“FTB”) debt is from 1 March 2008 to 27 October 2008; and,
(2) Sets aside the decision of the SSAT that cancelled the applicant’s FTB payments in respect of her daughter (“A”) from 24 October 2007, and substitutes its decision that FTB payments in respect of A are cancelled from 1 March 2008; and,
(3) Affirms the decision of the SSAT to raise and recover a FTB debt for the period 19 January 2009 to 16 February 2009; and,
(4) Pursuant to s 101 of the A New Tax System (Family Assistance) Act 1999 (Cth) (“the Act”), waives the FTB debt for the period 1 March 2008 to 1 May 2008.
...................[Sgd].................
Member
CATCHWORDS
SOCIAL SECURITY – Family tax benefit – Qualification to receive family tax benefit during the relevant period – If the applicant was overpaid family tax benefit should the debt be waived – Decision of Social Security Appeals Tribunal to extend the period of the debt set aside – Decision of Social Security Appeals Tribunal to cancel the applicant’s family tax benefit payments from 24 October 2007 set aside – Decision of Social Security Appeals Tribunal to raise and recover debt for specific period affirmed – Debt for remaining period waived.
A New Tax System (Family Assistance) Act 1999 (Cth) s 22
Social Security (Administration) Act 1999 (Cth) ss 71, 97, 101
Director-General of Social Services v Hales (1983) 47 ALR 281
Dranichnikov and Another v Centrelink and Another (2003) 75 ALD 134
Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Re Lucey and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 485
Secretary, Department of Family and Community Services v Holmes (2000) 98 FCR 461
REASONS FOR DECISION
25 October 2010 Dr M Denovan 1. Hayley Fuller, the applicant, has a daughter (“A”) born in 1993. On 24 October 2007 A ceased to live with the applicant. Ms Fuller continued to receive family tax benefit (“FTB”) on the basis that she had 100% care of A until 23 March 2009.
2. On 18 February 2009 Centrelink decided to cancel Ms Fuller’s FTB in respect of A from 1 March 2008. On the same day Centrelink decided to raise and recover a FTB debt of $4,018.24 for the period 1 March 2008 to 27 October 2008, and a FTB debt of $464.29 for the period 19 January 2009 to 16 February 2009.
3. Ms Fuller sought a review of those decisions, which were affirmed by an Authorised Review Officer on 3 April 2009. On 1 December 2009 the Social Security Appeals Tribunal (“SSAT”) decided to extend the first debt period, by changing the start date from 1 March 2008 to 24 October 2007. On the same date the SSAT also varied the decision to cancel the applicants FTB payments from 1 March 2008 such that it was to be cancelled from 24 October 2007.
RELEVANT LAW AND ISSUES
4. The legislation that sets out the criteria for when a person is eligible for FTB is A New Tax System (Family Assistance) Act 1999 (Cth) (“the Act”). Section 22 of the Act deems that a child is an FTB child of a person if that child is under 16 years of age and, in the care of the adult. The adult must be legally responsible (whether alone or jointly with someone else) for the day-to-day care, welfare and development of the child.
5. It is not in dispute that from 24 October 2007 A ceased to live in the same house as Ms Fuller. Ms Fuller contends that A was still “in her care” during that period. The respondent contends that the effect of A’s absence was that she was not in the applicant’s care during that period and, therefore Ms Fuller was not eligible for FTB in respect of A.
6. In order to resolve the dispute in this case, I must firstly decide whether Ms Fuller was providing the type of care that would qualify her for FTB during part or all of the period from 24 October 2007 to 21 November 2008, and from 19 January 2009 to 23 March 2009.
7. If Ms Fuller was overpaid FTB then there is a debt due to the Commonwealth[1]. If I determine that a debt is due to the Commonwealth as a result of an overpayment, I must decide whether this debt can be waived.
[1] Section 71 of the Social Security (Administration) Act 1999 (Cth).
8. Part or all of a debt can be waived if it is attributable solely to administrative error on behalf of the Commonwealth[2]. Ms Fuller does not claim that any administrative error occurred, and the respondent does not concede any.
[2] Section 97 of the Social Security (Administration) Act 1999 (Cth).
9. Section 101 of the Social Security (Administration) Act 1999 (Cth) (“Administration Act”) provides for waiver of part or all of a debt where special circumstances make it desirable to do so. For s 101 to be exercised in the applicant’s favour, the debtor must have not knowingly made a false statement or representation, or not knowingly failed to comply with a provision of the family assistance law. The respondent helpfully provided further information at the hearing, and conceded that it may be the case that s 101 could be exercised in the applicant’s favour. I will discuss this further below.
Was Ms Fuller providing the type of care for A that would result in eligibility for FTB from 24 October 2007 to 21 November 2008 and from 19 January 2009 to 23 March 2009?
(a)24 October 2007 to 27 November 2008
10. In October 2007 Ms Fuller was living in Adelaide with her three children. Ms Fuller told me that on 24 October 2007 she had a fight with A. She rang the police and asked them to remove A from her house. A then commenced living with Ms Fuller’s brother and girlfriend. This arrangement was initially congenial as her brother lived close by and she saw A regularly. It was intended that this arrangement be temporary only. Ms Fuller told me that she paid her brother all of the FTB that she received for A, after paying A’s private school fees.
11. Guidance as to what constitutes care is found in the Family Assistance Guide. Departmental policy should be applied by administrative decision makers unless there are cogent reasons for not doing so[3]. Further in Secretary, Department of Family and Community Services v Holmes[4], the Federal Court said that, in determining who has an entitlement to social security benefit, if there is any relevant government policy guidance, then appropriate regard should be paid to it.
[3] Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634.
[4] (2000) 98 FCR 461.
12. Sections 1.1.C.90 and 2.1.1.85 of the Family Assistance Guide relevantly states:
1.1.C.90
For the purposes of being considered an FTB child, FA legislation refers to being in the care of an adult. Reference is also made to legal responsibility for the day-to-day care, welfare and development of the individual. Day-to-day care generally includes physical care. Means of support and attention to health are essential to physical well-being. Some examples of day-to-day care include:
having major daily responsibility for caring for the child/ren and making the major decisions (i.e. decisions relating to immediate health issues, school attendance, transport, etc.),
bearing the costs of the child/rens' daily care,
looking after the child/rens' daily needs (i.e. food, accommodation, clothing, hygiene, medical expenses, etc.),
making arrangements for the daily needs and appointments for the child/ren (i.e. appointments at school or with doctors or dentists and accompanying them on those appointments), and/or
being the main person for the day care, school, or college to contact in emergencies.
'Care' also includes mental, moral and emotional support including love, comfort and discipline. Schooling is essential for the child's mental development and attention to matters like healthy activities is also an important aspect of care. This means that the adult must maintain a measure of oversight with a view to protection and guidance of the child/ren.
When assessing levels of 'care' consideration of the full circumstances of each case must be taken into account to decide whether care remains with a parent, is shared with others, or is not present.
2.1.1.85
‘Where possible, FTB should be paid to the person who has the actual care of a child. However, in some situations, FTB may continue to be paid to a parent who does not have the care of a child. For example, if the change of care is temporary and short term and the intention is that the child will return to the parent within a short period, the parent will continue to be paid FTB.
13. I accept that when A moved in with Ms Fuller’s brother it was intended that this arrangement be temporary. The respondent did not refute Ms Fuller’s claim that she paid her brother the balance of FTB after paying school fees and, I accept that this was the case. I also accept that during the time that A resided with Ms Fuller’s brother, Ms Fuller continued to be responsible legally for A and, continued to pay for her clothing and, for part of her day-to-day care costs. Those costs would have exceeded the amount that she received by way of FTB. Ms Fuller’s brother lived very close to her, and she had frequent contact with A during this time. Ms Fuller gave her daughter mental, moral and emotional support during this time. Ms Fuller told me that during this time she was responsible for the day-to-day care, welfare and development of A. The respondent led no evidence to the contrary. I consider that Ms Fuller maintained involvement and care of A to a sufficient degree to entitle her to FTB during the time that A resided with her brother; that is, until 27 November 2007.
(b) 27 November 2007 to 21 November 2008
14. What happened after 27 November 2007 is more complicated. Ms Fuller told me that A was not getting along with Ms Fuller’s brother’s girlfriend, so she moved in with the Ashenden family on 27 November 2007. A knew the Ashendens through one of her friends. Ms Fuller said that A staying with the Ashendens was not what she wanted, however she did not mind her staying there. Ms Fuller and the Ashendens agreed that Ms Fuller would continue to collect FTB for A, and pay the Ashendens the balance after paying A’s school fees. Ms Fuller told me that she handed the money directly to Mr and Mrs Ashenden’s son. She offered money to Mrs Ashenden but she refused to accept it. Ms Fuller saw A regularly, usually after school, and also on the weekends. She provided emotional and financial support to A. She paid for A’s phone and charger, clothes, and gave her money to go to the movies and out with friends.
15. Ms P Johnston, an Early Interventions Project Officer with the Adelaide Reconnect Program, confirmed that it was intended that A’s stay with the Ashendens was to be temporary only. She confirmed the existence of a financial agreement as described by Ms Fuller[5].
[5] Exhibit 1, T12/57.
16. Mrs Ashenden gave evidence by phone at the hearing. She told me that the financial arrangement had been orally agreed to, because this provided the most government support for A. Mrs Ashenden works and would only be entitled to a much smaller amount of FTB had she made a claim in her own name for A. Mrs Ashenden said that Ms Fuller gave her four payments. After March 2008 she received no money from Ms Fuller. Mrs Ashenden gave A pocket money, paid for her excursions and uniforms. It was intended that A’s stay with the Ashendens would be for 12 weeks however, there was a breakdown in attempts to reconcile A with her mother and A elected to remain with the Ashenden family.
17. Factors that I need to take into consideration include: the intention of the parties at the time of the change of care; the purpose of the arrangements; who bears the costs for the day-to-day upkeep of the child; food, transport to and from school etc; and, who pays for other long-term costs associated with the child such as school fees, clothing, health and dental care etc. If the parent pays for the full costs of the care or contributes to part of the cost to cover things such as food, transport etc, this may suggest that the care has not been transferred to the new carer (and the parent may still be exercising legal responsibility).[6]
[6] The Guide to Social Security Law.
18. All parties agree that when A moved in with the Ashenden family it was initially intended that that living arrangement would be temporary. Ms Fuller expected that within a short time, A would return to her home. Ms Fuller continued to pay for A’s school fees until 18 April 2008[7] and also gave some amount of cash towards the care of A. I accept that although the relationship with the Ashendens was somewhat strained, she was involved in decision making regarding A’s needs, including the decision to withdraw A from Cedar College[8].
[7] Exhibit 1, T16/74.
[8] Exhibit 1, T16/75.
19. The law does not provide for private FTB agreements of the nature that was organised between Ms Fuller and Mrs Ashenden, however the arrangement is evidence that it was the intention of all parties that Ms Fuller continue to provide financial support for the day-to-day upkeep of A, whilst she was residing with the Ashendens
20. It appears that A’s care by the Ashendens changed from temporary to ongoing on or about 1 March 2008 when family mediation failed. Around this time Ms Fuller ceased paying cash to the Ashendens, and her involvement with A’s daily care seems to have declined. Prior to that time I accept that as well as paying the Ashendens some money, and paying the school fees, Ms Fuller was seeing A regularly and providing her with money for transport, entertainment and clothing. She organised chiropractic treatment and dental treatment. She maintained a bedroom for A in her house and A and her boyfriend stayed regularly with her. She attempted to collect A from the Royal Adelaide Hospital when she was called to do so.
21. The Guide indicates that payment of FTB during short term absences in all but the most extenuating circumstances should not exceed 4 weeks unless ‘the parent's involvement in the child's care increased to a sufficient degree’.
22. This is a case of extenuating circumstances. To say that Ms Fuller has a very difficult life is an understatement. Ms Fuller suffers from bipolar disorder, diagnosed in 1998[9]. She was self medicating for many years with amphetamines. She has been hospitalised and takes medication daily. She continues to experience extreme cycles in mood from severe depression to mania. She has extremely poor coping skills and finds it hard to concentrate on any one thing at a time. She has received psychological counselling from agencies in relation to her ability to cope with parenting. Ms Fuller ceased the use of illicit drugs in August 2008. Her previous use of drugs led to violent and illegal behaviours.
[9] Exhibit 4.
23. She also has a very serious blood disorder which has resulted in multiple pulmonary emboli, and requires weekly monitoring and daily medication with warfarin[10]. This condition was not diagnosed until 2009; however the symptoms have been present for many years.
[10] Exhibit 4.
24. Ms Fuller has three children. The second child, B, is 13 years old. He suffers with ADHD, and bipolar disorder. He is being treated by a specialist. Her youngest son, C, is eight years old. He has been diagnosed with behavioural disorders and school problems. Ms Fuller has very little social or family support. Her day-to-day life is unpredictable and the medical needs of herself and her children are exceptionally high. I found Ms Fuller to be sincere. There are some variations in her history account which I consider are likely due to absences in her memory due to her medical conditions. I accept that from 24 October 2007 to 1 March 2008 she did her best to maintain as much contact as possible with A, was involved in decision making in relation to her care, and continued to financially support her. The level of care provide by Ms Fuller to A was sufficient to entitle her to FTB for A until 1 March 2008.
25. This is not to say that Mrs Ashenden did not contribute financially to A’s care during this time. I am sure that she did, the cost of supporting teenage children is extremely high. I consider that the money that Mrs Ashenden was given by Ms Fuller prior to 1 March 2008 was likely equal or greater to that which she would have otherwise have been entitled to have she claimed FTB herself.
26. It is not clear to me what was happening between 1 March 2008 and 1 May 2008. All that can be said for sure is that attempts to reconcile A’s relationship with her mother failed and Ms Fuller moved to Queensland with her two boys in early May 2008. If Ms Fuller gave any money to Mrs Ashenden after 1 March 2008 it was minimal.
27. I do not accept that from 1 May 2008 to 21 November 2008 Ms Fuller was financially or emotionally supporting A. Nor do I accept that she was involved in any day-to-day decisions and care of A from this time. Ms Fuller moved to Queensland and A remained in Adelaide. Ms Fuller was not in a position to provide the level of care required to be eligible for FTB.
28. A moved in with her mother on 21 November 2008, at the end of the school year. She then moved in with Rebecca Kassulke on a permanent indefinite basis on 19 January 2009. That A enrolled in a school located close to the Kassulke residence is indicative of an intention for the arrangement to be permanent. Ms Fuller claims to have continued to support A after she moved into the home of Ms Kassulke. There is no evidence to support this claim, and given the geographical separation I do not accept that Ms Fuller was involved in A’s daily care, or bearing the costs of her daily care during that time. For these reasons I conclude that Ms Fuller was entitled to FTB until 1 March 2008, and then from 21 November 2008 to 19 January 2009.
Can part or all of the debt be waived?
29. The waiver provisions in section 101 cannot apply where the debt arose partly or wholly due to the debtor or other person knowingly making a false statement or knowingly failing to comply with the provisions of the Act.
30. Ms Fuller says that she did not knowingly make a false declaration or knowingly fail to comply with the provisions of the Act. Ms Fuller accepts that she received correspondence from Centrelink which stated that she must inform them if there is a change in living arrangements for any of her children. She said that she did not read them. She has had debts raised for overpayments previously, and the SSAT considered that this was evidence that Ms Fuller should have been aware of the possibility of a debt being raised if she did not inform Centrelink of changes in her circumstances.
31. Ms Fuller told me that the previous debts had been waived because the children were taken off her and placed in foster care, and Centrelink decided that she did not do anything wrong. I am unaware of the circumstances of Ms Fuller’s previous debts however it appears that she may not fully understand the nature of those debts or the reasons why they were waived. I cannot conclude therefore that those debts were reason to expect her to be aware of her obligations in this circumstance. Ms Fuller told me that she did not consider there was an obligation to tell Centrelink because she considered that she was still responsible for A and still paying for her care. Given the circumstances at the time and, taking into account Ms Fuller’s medical conditions and her limited mental capacity, I accept that she did not knowingly fail to comply with the provisions of the Act during the period 24 October 2007 to 1 May 2008.
32. I do consider that when she moved to Queensland Ms Fuller should have turned her mind to informing Centrelink about the changed circumstances.
33. I next considered whether there are special circumstances that would make it appropriate to waive the debt. Whilst the term “special circumstances” is not defined in the Act, it has been held by the Tribunal and by the Federal Court that the term refers to circumstances which distinguish this case from the usual case[11].
[11] See Dranichnikov and Another v Centrelink and Another (2003) 75 ALD 134.
34. In considering whether to exercise the discretion to waive the right to recover a debt due to the Commonwealth, the Tribunal must consider all of the relevant circumstances, including the fact that the applicant has received monies to which she was not entitled, the reasons for the overpayment, the prospects of recovery in the context of the applicant’s overall financial circumstances and the taxpayer’s expectation that overpaid moneys will be recovered: Director-General of Social Services v Hales[12].
[12] (1983) 47 ALR 281.
35. In the matter of Lucey[13], Senior Member McCabe said:
‘The law reports are full of examples of events or factors or affairs that have been
considered to be special circumstances in the context of a particular case. One must
approach these reports with caution, of course: the facts of each case will be subtly
different, and what may appear unremarkable in isolation might be regarded as
special when viewed in conjunction with other factors, each of which might be
unremarkable on their own.’
[13] ReLucey and Secretary, Department of Education, Employment and Workplace Relations [2010]
36. Ms Fuller is currently in receipt of DSP. She lives in rental accommodation. She requires blood tests several times a week to monitor her warfarin levels. She attends her doctor on most days. She requires nine different medications, some of which are on private script. She owns a car which has little value, made in 2000. Her oldest child requires weekly appointments with a mental health clinic. He has been suspended from school and Ms Fuller is responsible for home schooling. Her younger son, now eight years old, has behavioural and mood disorders, and has recently been diagnosed with ADHD. He runs away regularly and his behavioural disorder creates problems at school. He requires medication and four weeks ago he overdosed. Ms Fuller has recently been diagnosed with Hepatitis C. She has been advised to lose weight to assist with her clotting disorder, however she can no longer afford to go to a gym, and has stopped her chiropractic therapy due to lack of money. She has very limited social support. Ms Fuller is unable to work now or at any foreseeable time in the future, and therefore there is very little likelihood that she will be able to supplement her income over and above social security payments. Her medical expenses are much higher than average, and the mental and emotional demands placed on her by medical conditions and her children are much greater than the average family has to deal with.
37. Ms Fuller demonstrated commitment to her daughter by continuing to pay her daughter’s school fees until the end of April 2008. This is commendable as during this same period Ms Fuller was attempting to break illicit drug addiction, and deal with the mental and physical health problems of herself and her two boys. She also maintained contact with her daughter during this time and provided some financial and emotional support to her. The FTB that she receives was therefore well and truly spent on A. Ms Fuller relied on the FTB in relation to A in order to give financial support to A up until 1 May 2008. It would be unjust and inequitable to require repayment of FTB that Ms Fuller was given during this time as she spent equal or more than she received from FTB for A on A.
38. I consider that her circumstances collectively constitute special and her debt up to 1 May 2008 should be waived. The FTB debt for money she received in relation to A from 1 May 2008 to 27 October 2008 remains, as does the debt for FTB for the period 19 January 2009 to 16 February 2009.
CONCLUSION
39. The Tribunal:
(1)Sets aside the decision of the SSAT which extended the period of debt from 24 October 2007 to 27 October 2008, and substitutes its decision that the period of FTB debt is from 1 March 2008 to 27 October 2008; and,
(2)Sets aside the decision of the SSAT that cancelled the applicant’s FTB payments in respect of her daughter from 24 October 2007, and substitutes its decision that FTB payments in respect of A are cancelled from 1 March 2008; and,
(3)Affirms the decision of the SSAT to raise and recover a FTB debt for the period 19 January 2009 to 16 February 2009; and,
(4)Pursuant to s 101 of the Act, waives the FTB debt for the period 1 March 2008 to 1 May 2008.
I certify that the 39 preceding paragraphs are a true copy of the reasons for the decision herein of Dr M Denovan
Signed: .....................[Sgd]...................................................
Kate Slack, Research AssociateDate/s of Hearing 2 September 2010
Date of Decision 25 October 2010
The Applicant was self represented
The Other party was self represented
For the Respondent Mr B Hamilton, departmental advocate
AATA 485.
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