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

[2015] AATA 934

Gavranic and Secretary, Department of Social Services (Social services second review) [2015] AATA 934 (3 December 2015)

Division	GENERAL DIVISION
File Number(s)	2015/3121
Re	Kathy Gavranic
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Prof R McCallum AO, Member
Date	3 December 2015
Place	Sydney

The decision of the former Social Security Appeals Tribunal is set aside. In substitution, I exercise the special circumstances discretion in subsection 10(2) paragraph (b) subparagraph (ii) of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) and extend the time for the lodgement of Mrs Gavranic's application for Family Tax Benefit to 4 August 2014 when this application was received by the Department of Human Services.

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Prof R McCallum AO, Member

CATCHWORDS

SOCIAL SECURITY - payments - family tax benefit - application for family tax benefit out of time - whether special circumstances exist to extend the claim period - held special circumstances exist - decision set aside and substituted

LEGISLATION

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

Acts Interpretation Act 1901 (Cth) s 29(1)

CASES

Boscolo v Secretary, Department of Social Security (1999) 53 ALD 277

Dranichnikov v Centrelink (2003) 75 ALD 134
Re Hunnibell and Department of Family and Community Services [2004] AATA 992

Re Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Rahim [2010] AATA 946

REASONS FOR DECISION

Prof R McCallum AO, Member

3 December 2015

INTRODUCTION

1. The Applicant is Mrs Gavranic. She and her husband have two children, one in primary school and the other in the early years of secondary school.

2. On 8 July 2014, Mrs Gavranic attempted to make an online application for Family Tax Benefit (FTB) for the 2012-2013 financial year. However, she mistakenly applied for FTB for the 2013-2014 financial year.

3. On 4 August 2014, the Department of Human Services, that is Centrelink, received Mrs Gavranic's correct application for FTB for the 2012-2013 financial year.

4. On 8 October 2014, Centrelink rejected her claim on the ground that it was out of time.

5. Mrs Gavranic sought review from an Authorised Review Officer and then from the former Social Security Appeals Tribunal, but to no avail.

6. Mrs Gavranic now appeals to this Tribunal.

   THE LEGISLATION

7. The provisions in this matter are to be found in the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) which for simplicity sake I shall refer to as the FAA Act.

8. Subsection 5(1) makes it clear that the only way to make a valid claim for FTB is in accordance with the relevant provisions of the FAA Act.

   Subsections 10(2) and 10(2A) of the FAA Act read as follows.

   (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.

   …

9. Subsection 13(1) is as follows:

   If an effective claim is made, the Secretary must determine the claim in accordance with this Subdivision. If a claim is not effective, it is taken not to have been made.

10. These provisions are not immediately easy to comprehend. Simply put, subsection 10(2) requires claimants to lodge their claims for FBT no later than twelve months after the end of the financial year which is the subject of the claim. For example, a claimant wishing to obtain FBT for the 2014-2015 financial year which ended on 30 June 2015, has until 30 June 2016 to lodge the claim.

11. Previously, claimants had two years after the end of the relevant financial year to claim FBT. However, in the 2013 federal budget, it was announced that the period for valid claims would be shortened to one year after the end of the relevant financial year. In essence, this is what subsection 10(2) of the FAA Act now requires.

12. Subsection 10(2) paragraph (b) subparagraph (ii) of the FAA Act does give the Secretary of the Department of Social Services (the Secretary) a discretion to accept claims for FBT beyond the one year period if “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”.

13. However subsection 10(2A) of the FAA Act makes it clear that the Secretary may only exercise the special circumstances discretion for a twelve month period, that is from the beginning of the second year after the end of the relevant financial year to the end of that second year.

14. For example, where an applicant failed to apply for FTB for the 2012-2013 financial year by 30 June 2014, the Secretary may only exercise the special circumstances discretion for the one year period from 1 July 2014 to 30 June 2015.

    THE ISSUE BEFORE THE TRIBUNAL

15. It is common ground between the parties that Mrs Gavranic's correct application for FTB for the 2012-2013 financial year was out of time. It was made one month and four days beyond the end of the claim period.

16. Therefore, the issue which I am required to decide as I stand in the shoes of the Secretary, is whether special circumstances exist in Mrs Gavranic's case to enable me to extend the claim period and to accept her claim for FTB.

    THE DOCUMENTARY EVIDENCE

17. The Tribunal has before it the documents compiled by the Respondent pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (Cth) which are known as the T documents. Mrs Gavranic also provided to the Tribunal a chronicle of events dated 15 September 2015

    THE EVIDENCE OF MRS GAVRANIC

18. Mrs Gavranic attended the hearing and was accompanied by her sister. Mrs Gavranic gave sworn evidence. I found her to be an honest and truthful witness.

19. At times, Mrs Gavranic became a little confused about the exact dates of events. Accordingly, in setting out her Evidence, I have relied in part upon Mrs Gavranic's Chronicle of events dated 15 September 2015.

20. Mrs Gavranic said that her father-in-law suffered a stroke in July 2012 and went into a nursing home. He took a turn for the worse in September 2013 and was bedridden.

21. Mrs Gavranic said that her father who lives in Croatia suffered a stroke in September 2013.

22. Mrs Gavranic said that her husband then gave up work to spend time with, and to assist his father who passed away on New Year's Eve 2013.

23. Mrs Gavranic said that her husband was deeply affected by his father's death and that he is now only getting back to work.

24. Mrs Gavranic said that during this time she was the only one working, and that she worked for four days each week, and of course had to look after the children.

25. Mrs Gavranic said that at this time they were living with her mother because they were renovating a house. They moved into this house in March 2014.

26. Mrs Gavranic said that she did not know that the time to claim FBT had been shortened from two years to one year after the end of the relevant financial year. The Australian Government had sent a letter dated 10 February 2014 to Mrs Gavranic's mother's address where she was then residing. The letter explained the change time limit for claiming FTB. Mrs Gavranic said that she did not receive this letter. Mrs Gavranic said that if she had known about this change she would have ensured that she made a claim for FTB before the end of the one year period.

27. Mrs Gavranic said that on 17 March 2014, she emailed her accountant about their taxation matters, and on 18 March 2014 the accountant replied saying that the accountant would get onto them.

28. Mrs Gavranic said that on 27 June 2014, she and the children travelled to Bowral for four or five days to visit her brother.

29. On 3 and 7 July 2014, Mrs Gavranic said that she emailed her accountant to ask for the tax returns. On 8 July 2014, the accountant emailed Mrs Gavranic their tax returns.

30. Mrs Gavranic said that on 8 July she went online to lodge the claim for FTB. She said that she thought she had ticked the 2012-2013 financial year.

31. On 22 July 2014, Mrs Gavranic telephoned Centrelink to inquire about her application for FTB. She then learned that she had ticked the 2013-2014 financial year instead of the 2012-2013 financial year.

32. Centrelink mailed her the form for the 2012-2013 financial year. In T document 15 of the T documents, there is a brief file note which intimates that the 2012-2013 form was mailed to Mrs Gavranic, so that she could appeal when Centrelink decided that the claim was out of time.

33. Mrs Gavranic said that she filled in the form on 25 July 2014 and posed it to Centrelink and it was received on 4 August 2014.

    SPECIAL CIRCUMSTANCES

34. It will be recalled that subsection 10(2) paragraph (b) subparagraph (ii) of the FAA Act reposes in the Secretary a discretion to extend the period for a person to lodge a claim for FTB “...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”.

35. Over the years, the courts have commented on the meaning of the words "special circumstances".

36. In Dranichnikov v Centrelink (2003) 75 ALD 134, Hill J (with Kiefel and Heely JJ agreeing) said at [66]:

    … Other cases which have considered analogous words such as “special reasons” has tended to conclude, albeit in different contexts, that what is required will be circumstances which distinguish the case in consideration from the usual case.  There will be a requirement that the circumstances are such that takes the case out of the ordinary...

37. In Boscolo v Secretary, Department of Social Security (1999) 53 ALD 277, French J (as he then was) stated at [18]:

    The word “special” conditioning “reasons” or “circumstances” guards the entrance to the exercise of many different statutory discretions. It is generally futile to search for its meaning in terms of other words. It is in essence instrumental, a direction to the decision-maker that the discretion it constrains is not lightly to be enlivened. A Full Court has spoken of it as having content which is “...sufficiently understood not to require judicial gloss” - Beadle v Director-General of Social Security [1984] AATA 176; (1985) 60 ALR 225 at 228. If helpful to speak in terms of its meaning almost all of it comes from context. …

38. Having regard to these judicial comments, in my view the phrase "special circumstances" as it appears in subsection 10(2) paragraph (b) subparagraph (ii) of the FAA Act encompasses matters which distinguish the case from the usual cases where persons apply for FTB.

39. The matters in the field of social security under the Social Security Act 1991 (Cth) and its predecessor statutes which come before this Tribunal and which raise the special circumstances discretion, usually concern situations where applicants are seeking to have written off or to have diminished a debt which they owe to the Commonwealth.

40. The situation before me is quite different. Mrs Gavranic is seeking the exercise of a special circumstances discretion to obtain an entitlement to FTB.

41. The Respondent's statement of facts and contentions note two decisions before this Tribunal which concerned the FAA Act and special circumstances.

42. The first decision is Re Hunnibell and Department of Family and Community Services [2004] AATA 992. The issue before the Tribunal concerned the time limit for seeking review of a decision not to grant FTB. Subsection 109D(1) of the FAA Act prescribes a 52 week time limit for seeking review of various decisions specified in section 109A, including decisions to refuse FTB. Subsection 109D(2) reposes a special circumstances discretion in the Secretary to extend the 52 week time limit. Subsection 109D(2) reads as follows:

    The Secretary may, if he or she is satisfied that there are special circumstances that prevented the applicant from making an application under section 109A for review of a decision (other than an excepted decision) within the 52 weeks mentioned in subsection (1), permit a person to make the application after the end of that period and within such further period as the Secretary determines to be appropriate.

43. In this matter, the Applicant was notified on 9 January 2002 that his application for FTB was refused. The Applicant did not seek review of that decision until 16 January 2004 which was more than two years after the Applicant had been notified of the decision.

44. In Hunnibell, Member G D Friedman refused to exercise the special circumstances discretion in favour of the Applicant. Member Friedman states:

    [20] The Tribunal accepts the applicant's evidence that when he received the Notice in January 2002 he did not realise that a 52-week time limit applied to the lodgement of an application for review of the decision to refuse the grant of family tax benefit.  However, the Tribunal is satisfied that the Notice contained adequate information that would have assisted the applicant to make further enquiries and to lodge his appeal with the prescribed time limit. 

    [21] The Tribunal takes into account the personal and family difficulties described by the applicant.  However, the Tribunal notes that the letter from Centrelink dated 15  October  2002 specified that the 52-week time limit applied in respect of family tax benefit for 2000/2001, and the applicant failed to act on the advice.  The Tribunal also notes that the applicant did not raise the issue with Centrelink on 14  November  2003 or 5 December 2003.  For these reasons the Tribunal concludes that the applicant had ample opportunity to seek assistance or to make inquiries about seeking review within the time limit, and there is no material before the Tribunal to suggest that the applicant was prevented from making his application on time.

    [22]     Therefore, the applicant's circumstances do not constitute special circumstances. ...

45. The facts and circumstances in Hunnibell differ from the facts and circumstances in the matter before me. In Hunnibell, the application was more than one year out of time, and on two previous occasions the Applicant had not raised the possibility of reviewing the rejection decision with Centrelink.

46. The second decision, cited by the Respondent, concerning the special circumstances discretion in subsection 10(2) paragraph (b) subparagraph (ii) of the FAA Act is Re Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Rahim [2010] AATA 946. The facts are complex, however, for present purposes the relevant issue before the Tribunal concerned the 52 week time limit under subsection 109D(1) of the FAA Act for seeking review of a decision to cancel Mr Rahim's FTB.

47. Mr Rahim, was successful in having the special circumstances discretion in subsection 109D(2) exercised in his favour.

48. In this decision Member Hogan gave the following reasons for exercising the discretion in favour of Mr Rahim:

    [96]     In considering if special circumstances exist in the case of Mr Rahim the Tribunal made note of the following:

    (a)       Mr Rahim was in Graylands Hospital from 10 February 2004 to 27 February 2004;

    (b)       Mr Rahim left Australia when he was still mentally unwell on 7 March 2004;

    (c)       In 2004 Mr Rahim's wife did not speak, read or understand English;

    (d)       Mr Rahim was overseas when Centrelink requested information from him about his income, and then cancelled his family tax benefit when he failed to provide this information;

    (e)       Mr Rahim did not receive any correspondence from Centrelink after he left Australia on 7 March 2004;

    (f)        Mr Rahim has a psychotic illness which has led to numerous admissions to psychiatric hospitals in Australia, Afghanistan and Pakistan.  Between March 2004 and the end of 2008 Mr Rahim was admitted to hospitals in Afghanistan and Pakistan on a number of occasions as a result of psychotic breakdowns;

    (g)       After psychotic breakdown it can take Mr Rahim up to 12 months to recover;

    (h)       Mr Rahim stated he did not start to feel well again until late 2007.

    [97]     In the case of Mr Rahim the Tribunal is satisfied that, as Mr Rahim was mentally unwell in March 2004 and for at least the 52 weeks after and he did not receive the notice from Centrelink informing him that his family tax benefit had been cancelled, there are special circumstances which take his case 'out of the ordinary', and that these circumstances prevented him from applying for a review of the decision to cancel his family tax benefit within 52 weeks of being notified of the decision.

    [98]     In view of Mr Rahim's mental illness the Tribunal determines that it is appropriate to allow Mr Rahim until the end of 2007 (the time when Mr Rahim states he started to get better) in which to apply for this review.  As Mr Rahim asked for a review of the decision on 25 September 2006, the Tribunal is satisfied that Mr Rahim has asked for a review within the appropriate period.

    CONSIDERATION

49. The issue which I am required to decide as I stand in the shoes of the Secretary, is whether special circumstances exist in Mrs Gavranic's case to enable me to extend the claim period and to accept her claim for FTB.

    The lack of knowledge of the changes to FTB

50. In her evidence, Mrs Gavranic said that she did not know that the time period for lodging applications for FTB had been reduced from two years to one year after the relevant financial year. 

51. I do not regard her lack of knowledge as a special circumstance to be taken into account for the following reasons.

52. First, In paragraph 36 of the Respondent's statement of facts and contentions, it is stated that in January 2014, notice was given on the Department's website of the change in the time for lodging applications for FTB.

53. Second, Centrelink did send a letter to Mrs Gavranic on 10 February 2014 to the address at which she was residing, explaining changes to FTB.

54. Subsection 29(1) of the Acts Interpretation Act 1901 (Cth) provides as follows:

    Where an Act authorizes or requires any document to be served by post, whether the expression “serve” or the expression “give” or “send” or any other expression is used, then the service shall be deemed to be effected by properly addressing, prepaying and posting the document as a letter and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.

55. Mrs Gavranic adduced no evidence on why the letter had not been received at her residence in February 2014.

    Matters taken into account

56. In determining whether special circumstances apply to Mrs Gavranic, I take into account the stroke and death of her father-in-law and the effect of his passing on Mrs Gavranic's husband. I also take into account the stroke suffered by Mrs Gavranic's father.

57. I find that on 8 July 2014, Mrs Gavranic attempted to make an online application for FTB. From all of the evidence, I further find that in attempting to make the online application, Mrs Gavranic mistakenly ticked the 2013-2014 financial year and not the 2012-2013 financial year.  I also find that the mistake which Mrs Gavranic made on 8 July 2014 was an honest mistake.

58. I find that on 22 July 2014, Mrs Gavranic made reasonable inquiries of Centrelink about her attempted online application. Centrelink posted to Mrs Gavranic the form for FTB for the 2012-2013 financial year which Mrs Gavranic completed and posted to Centrelink.

    Conclusion

59. Mrs Gavranic attempted to apply for FTB on 8 July 2014 and she made an honest mistake. Had she not made this mistake her application for FTB would have only been eight days out of time. Although her successful application was not received by Centrelink until 4 August 2014, Mrs Gavranic did rectify her 8 July 2014 mistake within a reasonable time upon learning of her error. Given her family illnesses and the death of her father-in-law and its affects upon her husband, and that her attempted application was only 8 days out of time, I find that there were special circumstances which prevented Mrs Gavranic from making her application within time.

    DECISION

1. The decision of the former Social Security Appeals Tribunal is set aside. In substitution, I exercise the special circumstances discretion in subsection 10(2) paragraph (b) subparagraph (ii) of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) and extend the time for the lodgement of Mrs Gavranic's application for Family Tax Benefit to 4 August 2014 when this application was received by the Department of Human Services.

I certify that the preceding 60 (sixty) paragraphs are a true copy of the reasons for the decision herein of Prof R McCallum AO, Member

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Associate

Dated 3 December 2015

Date(s) of hearing	12 November 2015
Applicant	In person
Solicitors for the Respondent	Department of Human Services