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

[2015] AATA 1017

Grasso and Secretary, Department of Social Services (Social services second review) [2015] AATA 1017 (23 December 2015)

Division	GENERAL DIVISION
File Number	2015/3247
Re	Kate Grasso
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Senior Member A C Cotter
Date	23 December 2015
Place	Brisbane

The Tribunal affirms the decision under review.

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Senior Member A C Cotter

CATCHWORDS

SOCIAL SECURITY – Family Tax Benefit – failure to lodge income tax returns by the required date – whether special circumstances “prevented” the applicant from lodging returns – incorrect advice regarding requirements – information regarding requirements otherwise available – prevention not made out - decision under review affirmed

LEGISLATION

A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) s 10, 14A, 13

CASES

Groth v Secretary, Department of Social Security (1995) 40 ALD 54

Angelakos v Secretary, Department of Employment and Workplace Relations (2007) 100 ALD 9

REASONS FOR DECISION

Senior Member A C Cotter

23 December 2015

INTRODUCTION

1. Late on the afternoon of Friday, 27 June 2014, Mrs Kate Grasso lodged an online lump sum claim for Family Tax Benefit (“FTB”) for the 2012-2013 year. She and her husband, Ross, later lodged their income tax returns for the same year with the Australian Taxation Office (“ATO”), on 16 and 15 July 2014 respectively.

2. On 17 July 2014, the Department of Human Services decided that Mrs Grasso should not be paid FTB for the 2012-2013 year because income tax returns for her and her husband had not been lodged with the ATO by 30 June 2014.

3. Reviews of the decision by both an Authorised Review Officer and the then Social Security Appeals Tribunal (“SSAT”) were unsuccessful. Still dissatisfied with the outcome, Mrs Grasso has sought a review by this Tribunal.

   THE LEGISLATIVE FRAMEWORK

4. FTB can be paid fortnightly or in a lump sum at the end of a year.  Because Mr and Mrs Grasso are self-employed and their income can vary, Mrs Grasso elected to receive her FTB entitlement for the 2012-2013 financial year at the end of that year.[1]

   [1] Exhibit 1, T Documents, T 14, page 37, letter from Mr Ross Grasso, undated.

5. From 1 July 2013, the time for lodging a lump sum claim for FTB for a past period was reduced from two years to one year after the relevant year of claim. Subsections (2) and (2A) of s 10 of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (“Administration Act”) provide:

   (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.

6. Section 13 of the Administration Act goes on to relevantly provide that if a claim is not effective, it is taken not to have been made.

7. Section 14A of the Administration Act effectively provides that a past period claim for FTB is taken never to have been made if the income tax returns of the claimant or their partner are lodged after the end of the first income year following the past period income year, or such further period as the Secretary allows if the Secretary is satisfied that there are special circumstances that “prevented” the claimant from lodging the return before the end of that first income year.

   ISSUES FOR THE TRIBUNAL

8. There is no dispute that Mrs Grasso lodged a claim for FTB for the 2012-2013 financial year on 27 June 2014 and that she and her husband lodged their 2012-2013 income tax returns on 16 and 15 July 2014 respectively, after the end of the first income year following the 2012-2013 financial year.[2]

   [2] See Exhibit 2, Secretary’s Statement of Facts and Contentions dated 26 October 2015, paragraphs [27] and [28].

9. Consequently, the issue that remains to be considered by me is whether there were special circumstances that prevented Mrs and Mr Grasso from lodging their 2012-2013 income tax returns on or before 30 June 2014.

   CONSIDERATION

   What are “special circumstances”?

10. The expression “special circumstances” is not defined in the Administration Act. However, that expression has been considered extensively by the courts and this Tribunal in the context of both this and other social services legislation. For present purposes, it is suffice to say that the term is often said to refer to circumstances which distinguish the particular case from others; there must be something that takes it out of the usual or ordinary case.[3]

    [3] See for example Groth v Secretary, Department of Social Security (1995) 40 ALD 54 and Angelakos v Secretary, Department of Employment and Workplace Relations (2007) 100 ALD 9, [33].

11. I was also referred to the Department’s operational blueprint, which, although not binding, provides guidance as to what constitutes special circumstances for the purposes of s 14A(2)(b)(ii) of the Administration Act:

    A special circumstances extension should only be granted in limited situations where the customer and/or their partner, has been prevented from meeting the relevant requirements by the end of the lodgement year. The circumstances must be solely due to circumstances which are unusual or exceptional and are outside of the customer’s control.

    In all cases, consideration must be given to the reason why the customer was unable to meet the requirement within the allowable time period. When assessing a special circumstances extension request, the nature of the event (or impacts associated with the event) must have had a significant impact upon the customer’s capacity to meet the relevant requirement within the time allowed.[4] (My emphasis)

    [4] Exhibit 2, Attachment C to Secretary’s Statement of Facts and Contentions dated 26 October 2015, page 1/31.

    Mrs Grasso’s circumstances

12. Mr Grasso attended the hearing by telephone, on behalf of his wife.  He reiterated what was contained in the statutory declarations which had previously been provided to the SSAT.

13. He said that on 27 June 2014, he and his wife experienced difficulties in completing the online FTB form, and so called Centrelink while they were online. Once they were able to speak with a customer service adviser, she was able to do something which enabled them to complete the application. At the same time, Mr Grasso raised a couple of other questions, including whether their tax returns had to be sent to the ATO before 30 June. The answer he received was that as long as the online claim was completed before 30 June, the tax could be lodged “at a later date thereafter”. Once the online form had been completed, Mr Grasso called his accountant straight away, told him that they finished the claim and that there was no rush sending their returns to the ATO.[5] Mrs Grasso confirmed the content of the discussion between her husband and the Centrelink customer service adviser, as she also participated in that conversation by a hands free speaker phone.[6]

    [5] Exhibit 1, T Documents, T 12, page 31, Statutory Declaration of Ross Eric Grasso declared 30 January 2015.

    [6] Exhibit 1, T Documents, T 13, page 32, Statutory Declaration of Kate Sarah Grasso declared 30 January 2015.

14. Mr and Mrs Grasso’s accountant, Mr Michael Purcell, also provided a statutory declaration. He declared that on 27 June 2014, he received a call from Mr Grasso requesting figures of his taxable income for the 2013 financial year. As Mr Purcell had just completed the returns, he was able to advise the figures, which Mr Grasso said he was inputting into the Centrelink website as confirmation of his income for that year. Mr Grasso told him that he only needed to enter the income information on the website prior to 30 June and could lodge the tax returns at a later date. As Mr Purcell had the returns completed and ready for lodgement, he advised that he could email them to Mr Grasso to sign so that they could be lodged by 30 June if needed. He said that Mr Grasso told him that Centrelink had advised that the returns could be lodged after 30 June so long as the income figures were entered before that date. As a consequence, the returns were posted to Mr and Mrs Grasso, rather than emailed. The signed returns were received by Mr Purcell on 14 July and, according to him, lodged by him on 15 July. Assessments were received on 28 July.[7]

    [7] Exhibit 1, T Documents, T 11, pages 29-30, Statutory Declaration of Michael Eric Purcell declared 29 January 2015.

15. The contention therefore put by Mr Grasso on behalf of his wife was that special circumstances existed in this case because he and his wife were misled by the Centrelink customer service adviser. Had they been told the correct advice, they would have been able to satisfy the Act’s requirements by also lodging their returns on or before 30 June.

    Are there special circumstances that prevented Mrs Grasso and her husband lodging their tax returns on or before 30 June 2014?

16. Although Centrelink’s records reveal that, consistent with Mr and Mrs Grasso’s version of events, contact was made by Mrs Grasso on 27 June 2014 and that the information was provided via an online claim[8] lodged at 4:52 p.m. that afternoon,[9] there is no detail of the conversation described by them. In the absence of a written note in the Centrelink records and without the evidence of the Centrelink customer service adviser, it is difficult to form a concluded view as to precisely what was said, and by whom, on that occasion.

    [8] Exhibit 1, T Documents. T 15, pages 42-43.

    [9] Exhibit 1, T Documents T 5, page 15.

17. Giving Mr and Mrs Grasso the benefit of any doubt that the conversation they described took place, the question remains whether their circumstances were such that they were prevented from lodging their returns with the ATO by 30 June.

18. While they maintain that the Centrelink customer service adviser told them late on the afternoon of 27 June that the returns could be lodged later, there is a body of other material that was provided to them, or which was available to them or their accountant, which should have sounded a note of caution, or at the very least, led them to inquire further.

19. In January 2014, the Department published on its website a notice concerning “Changes to the time period for lodging lump sum claims and confirming income”. That highlighted the fact that from 1 July 2013, the amount of time to lodge a lump sum claim and confirm income had changed from two years to one year.  In particular, it stated that claimants now had one year to, amongst other things, confirm their income for FTB, meaning “you and your partner (if you have one) need to lodge a tax return” with the ATO. Later in the notice, under the heading “Important Dates for claiming”, it stated: “You have until 30 June 2014 to do any of the above things for the 2012-13 financial year”.[10] While there is no evidence that Mr and Mrs Grasso accessed the Department’s website and read this notice, the fact is that this information was generally available to FTB claimants.

    [10] Exhibit 2, Attachment E to Secretary’s Statement of Facts and Contentions dated 26 October 2015.

20. Further, the altered arrangements and timeframes were notified by the ATO to registered tax agents in the Tax Professionals Newsletter dated 6 November 2013.[11] That information would have been sent to Mr Purcell as a registered tax agent.

    [11] See Exhibit 2, Attachment F to Secretary’s Statement of Facts and Contentions dated 26 October 2015.

21. On 10 February 2014, the Department sent Mrs Grasso a SMS message to her mobile phone,[12] telling her “important” information, namely that the timeframe for lodgement of a FTB lump sum past period claim had reduced from two years to one year. The message continued:

    This means yo [sic] have until 30 June 2014 to lodge your claim and meet requirements for the 2012-2013 year.

    The message directed the recipient to the Department’s website for further information, where presumably the notice referred to in paragraph 19 above would have been found.

    [12] Exhibit 1, T Documents, T 4, page 14.

22. Most importantly, it was pointed out on behalf of the Secretary that when Mrs Grasso completed the online claim form for FTB, she would have received a response to the following effect:

    Important Note: Your lump sum claim for FTB for the 2012-2013 financial year is approaching the end of the eligible claim period.

    You must complete your lump sum claim for FTB by 30 June 2014. If you do not complete your claim by this date, you will not be eligible to receive payment for that period.

    In addition to lodging your lump sum claim within the allowable period, you and your partner (if you had one) must also lodge tax returns with the Australian Taxation Office or tell us if you are not required to lodge by the end of the financial year.[13]

    [13] See Secretary’s further submissions (letter from the Department to the Registry dated 24 November 2015).

23. At the SSAT hearing, Mr Grasso did not deny that a declaration to this effect was given to Mrs Grasso.  However, he said that they were too “flustered” by the claim process to notice it. Instead, they relied on the verbal advice given to them by the Centrelink customer service adviser.[14]

    [14] Exhibit 1, T Documents, T 2, page 5, SSAT’s Decision and Reasons for Decision dated 2 June 2015, paragraph [12].

24. Even had the Centrelink customer service adviser mistakenly told Mr and Mrs Grasso the wrong information, one would have expected them and/or their accountant, in light of the warnings and notices mentioned above, to at least clarify or confirm the advice they received, that advice being at odds with everything else they had been told up to that point in time. In that sense, the circumstances under consideration could not be said to be wholly outside Mrs Grasso’s control. Even if there had been a mistake by the Centrelink customer service officer, it was not her mistake entirely; Mr and Mrs Grasso, and indeed, Mr Purcell, all need to share some responsibility for the failure.

25. I am also conscious of the fact that the online claim form submitted by Mrs Grasso was itself wrong, in that it incorrectly stated that Mr Grasso’s and her tax returns had been lodged and Notices of Assessment received.[15]

    [15] Exhibit 1, T Documents, T 5, page 18, online claim form.

26. In any event, I have reservations as to whether the particular circumstances actually “prevented” the lodging of the income tax returns on or before 30 June. The word “prevented” is not defined in the Act, so it is necessary to have recourse to its plain English meaning. According to The Macquarie Dictionary, the word “prevent” means “to keep from occurring; hinder; to hinder (a person, etc.), as from doing something”. Similarly, The Oxford English Dictionary attributes the following meaning: “To stop, keep, or hinder (a person or other agent) from doing something”.  Mr Purcell confirmed that the tax returns were completed and ready to be signed and lodged on 27 June. They could readily have been sent to Mr and Mrs Grasso by email for signature and then lodged electronically on or before 30 June. There was nothing in the alleged error of the Centrelink customer service adviser that “prevented”, stopped or hindered the lodgement of the returns. Mr Grasso conceded as much to the SSAT.[16]

    [16] See Exhibit 1, T Documents, T 2, page 5, SSAT’s Decision and Reasons for Decision dated 2 June 2015, paragraph [11].

27. For those reasons, I do not believe there were special circumstances which prevented Mrs Grasso from lodging her and her husband’s tax returns on or before 30 June.

    CONCLUSION

28. To summarise, I am not satisfied that there were special circumstances in Mrs Grasso’s case that prevented her and her husband from lodging their 2012-2013 tax returns with the ATO by 30 June 2014, as required under s 14A of the Administration Act. As a consequence, the claim for FTB in the 2012-2013 financial year is to taken never to have been made. That means that Mrs Grasso was not eligible for FTB for that year.

29. I appreciate that this decision will be very disappointing to, and frustrating for, Mr and Mrs Grasso. However, should they still feel aggrieved, they may, as discussed at the hearing, wish to pursue other avenues available to them, either through the Department or the Ombudsman.

30. For the reasons mentioned, the decision under review is affirmed.

I certify that the preceding 30 (thirty) paragraphs are a true copy of the reasons for the decision herein of Senior Member A C Cotter

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Associate

Dated 23 December 2015

Date of hearing	19 November 2015
Date final submissions received	24 November 2015
Advocate for the Applicant	Mr R Grasso
Solicitors for the Respondent	Department of Human Services