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

[2021] AATA 2275

Gunn and Secretary, Department of Social Services (Social services second review) [2021] AATA 2275 (14 July 2021)

Division:GENERAL DIVISION

File Number:          2020/8081

Re:Nirvalla Gunn

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:R Cameron Senior Member

Date:14 July 2021

Place:Melbourne

The Tribunal affirms the decision under review.

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R Cameron Senior Member

Catchwords

SOCIAL SECURITY — parenting payment — Centrelink underpaid Applicant —  review not sought within 13 weeks — no discretion for payment of arrears — decision under review is affirmed

Legislation

Social Security (Administration) Act 1999 (Cth)

Cases

Winton and Secretary, Department of Social Services [2017] AATA 847

REASONS FOR DECISION

R Cameron Senior Member

14 July 2021

INTRODUCTION

1. The Applicant seeks a review of a decision made by the Social Services and Child Support Division of this Tribunal on 25 November 2020 (“AAT-1”).[1] That decision affirmed a decision made by an Authorised Review Officer (“ARO”) of the Respondent’s Appeals Branch made on 16 September 2020.

   [1] The "reviewable decision".

2. The Decision of the ARO reviewed the decisions made by the Respondent on 8 November 2018, 20 March 2019, 1 July 2019, 20 September 2019, 20 March 2020, 1 May 2020,1 July 2020 and 9 September 2020.[2] Collectively, these decisions related to the rate of payment to the Applicant of what is known as a Parenting Payment (“PP”) for the period 27 July 2018 to 7 September 2020.

   [2] Hereinafter collectively referred to as "the notices".

3. The ARO decision found that the Applicant was entitled to a back payment of the PP for the period 1 July 2020 to 7 September 2020 but not otherwise as was sought by the Applicant.

   RELEVANT FACTS

4. On 20 July 2018, the Applicant lodged an online claim for the PP following the separation from her husband. At the time of making such lodgement, she declared that she had no involvement in either a company or a trust. Her application was rejected by the Respondent agency because it considered that her assessable income was above the allowable limit.

5. The Applicant had for some time been an appointor and beneficiary of a trust known as the “2 Cans Trust”. The trustee of that trust was “Cans 2 Pty Ltd”. She was a director of the trustee with her husband. Apparently, this structure was put in place by her husband for taxation purposes. It is a common corporate and trust structure used for the purposes of conducting many businesses.

6. On 30 June 2018, the trustee of the 2 Cans Trust passed a directors’ resolution, which was signed by the Applicant, distributing its net income for the financial year ended 30 June 2018 entirely to the Applicant.[3]

   [3] A copy of the Directors Resolution, dated 30 June 2018 and signed by the Applicant was document T 10 of the T documents.

7. On 19 August 2018, the Applicant signed her 2018 financial year tax return which included the distribution from the 2 Cans Trust totalling the sum of $34,483.

8. Subsequently, steps were taken by way of the execution of legally binding documentation which severed all connections that the Applicant had with the trust. Details of these documents need not be reproduced for the purposes of these reasons. She ceased to be a beneficiary and appointor of the Trust. She resigned as a director of the trustee.[4]

   [4] Copies of the relevant documentation are contained document T 15 of the T documents.

9. On 8 November 2018, the Applicant’s claim for the PP was granted as and from 27 July 2018. The decision to grant the PP included, for the purpose of assessing the amount of such payment due to her, the distribution income of $34,483 paid by the trust to her. It was assessed for a period of 12 months from 19 August 2018, which was the date that she signed her 2018 financial year tax return.[5]

   [5] This detail emerged in a telephone conversation between the Applicant's accountant and an officer of the Respondent on 29 October 2018. Details of the phone conversation are recorded in document T 31 of the T documents. Her tax return was also in evidence as document T 12 of the T documents.

   CONSIDERATION

10. The problem with this case, or its gravamen, is that the assessments in subsequent years, in which decisions were made about the rate of payment of the PP to the Applicant, used the annual income of $34,810.93 (representing a trust distribution) to calculate such rate. This of course was wrong because the distribution of $34,483 to the Applicant for the 2018 financial year was not repeated in subsequent financial years. It was a one-off payment in the 2018 financial year. There were no subsequent distributions to her from the trust.

11. Subsequent notices of decision were sent out by the Respondent agency which are referred to in paragraph 2 above in these reasons. The contents of those notices are largely the same as that of the notice of decision of 8 November 2018. The critical factor for the purposes of this application is that each of those notices assessed the rate of PP to which the Applicant was entitled, based upon her continuing receipt of an annual income of $34,483. As was observed earlier, of course, no such distribution was made, or income received by the Applicant. Had the assessment been adjusted after 19 August 2019, the Applicant would have been entitled to a higher rate of PP throughout the applicable period covered by such notices of decision.

12. It should be noted that each of the notices of decision contained a statement or endorsement to the effect that if the recipient (the Applicant in this matter) disagreed with the decision, she must seek review within 13 weeks. It also stated that if the recipient requested a review more than 13 weeks after being notified, and the decision could be changed, she may only receive her entitlement from the date that she requested the review.

13. The Applicant did not seek a review of the decisions until 8 September 2020.[6] As a result of this, on 8 September 2020 the Respondent reassessed the trust distribution income to $nil as and from that date. It did not make any further reassessments for the period between 19 August 2019 and 8 September 2020.  

    [6] She requested the review when she contacted Centrelink on that date.

14. Understandably, the Applicant contends that outside of the initial period of assessment, which ended on 19 August 2019, no further income obtained from the distributions by the trust should have been assessed for the purposes of calculating her entitlement to the PP. The Applicant’s contention is correct, in that after the applicable year for the purposes of assessing her entitlement to the PP, the trust distribution income should have been assessed at $nil.

15. The review of the ARO was only partially successful, giving the Applicant the payment of arrears as and from 1 July 2020, being the date of the only decision made within 13 weeks of her request for a review.

16. Initially, during the hearing there was some doubt as to whether the Applicant had received each of the notices.[7] The Applicant stated that she did not believe she received the notice dated 8 November 2018.

    [7] Copies of the notices are to be found at pages 210-218 of the T documents. The Applicant was taken to each of them during the hearing.

17. The Respondent maintains a sophisticated electronic recordkeeping system. It records the date of each notice which is sent to a recipient’s “MyGov” account.[8] At all material times relevant to this application, the Applicant maintained a “MyGov” account which contained an inbox.[9]

    [8] See document ST 5 of the Supplementary T documents (“ST documents”).

    [9] The Applicant had a "MyGov" inbox as and from 16 April 2014 and had subscribed to "Electronic Messaging" from 12 June 2013. These are systems facilitating electronic communications between government agencies, and recipients of government benefits and other persons who have interaction with such agencies. They are commonly used platforms.

18. The Respondent’s electronic recordkeeping system also records when a recipient’s inbox is accessed.[10] During this hearing the Applicant was taken to the relevant notices on the date of access, and to her credit acknowledged that, save for the 8 November 2018 notice, she had received the notices and probably had done so by accessing her inbox.

    [10] See document ST 8 of the ST documents.

19. She also readily conceded, to her credit, that the explanation given in paragraph 25 of the AAT-1 reasons was an accurate statement of what occurred. She reiterated this explanation at the hearing of this application.

20. The explanation was that when receiving the notices, she had no idea that they constituted notices of decision. More particularly, and unfortunately for her, she paid no attention to the lower part of the notices which contained warnings that if she was dissatisfied with the decision, she must seek review within 13 weeks. This was until she received the notice of 8 September 2020, which triggered her response and prompted her to contact Centrelink. This led Centrelink to identify and subsequently rectify the error of including distribution of monies from the trust for the purposes of assessing her PP entitlement, as noted earlier.

21. Additionally, it was not until 8 September 2020 that she became aware that the failure to seek a review within 13 weeks could impact upon her right to be paid arrears. Further, she repeated that she did not know that a rate of PP was being incorrectly assessed. She assumed that Centrelink and the Australian Taxation Office (“ATO”) passed information to each other. She had lodged tax returns for later financial years with the ATO. Therefore, it never entered her mind to check what Centrelink had on its files until the notice of September 2020, which warned her to carry out the relevant check. It was then she saw that there was the error and immediately telephoned Centrelink.

22. The Tribunal is satisfied, based upon both the entries recorded in the Respondent’s sophisticated electronic recordkeeping system, and the admissions made by the Applicant during this hearing of the application, that she received each of the notices. The Tribunal also finds that as she admitted, she did not pay attention to the relevant part of them that included the warning that if she wished to seek a review of the relevant decisions she must do so within 13 weeks. This is most unfortunate.

23. The Applicant made compelling submissions about the effect that this error has had upon her and her family. Throughout the relevant period she was living in financially straitened circumstances, having recently separated from her husband and having parental responsibility for her children. Had the error been detected and the correct amounts of PP been paid to her, it would have significantly assisted her. The Tribunal acknowledges this fact. One must have sympathy for her predicament.

24. Regrettably for the Applicant, section 109 of the Social Security (Administration) Act1999 requires a person who seeks review of a decision in relation to that person’s social security payment (of which a PP is such a payment) to do so within 13 weeks after the notice is given. There is no discretion given or provision made for an extension of time or exception to the 13 week time limit. Additionally, there is no provision for backdating payments beyond 13 weeks. See by way of example Winton and Secretary, Department of Social Services.[11] It is unfortunately a form of financial “sudden-death” if an application for review is not made within the 13 week time limit.

    [11] [2017] AATA 847.

25. In this case, save for the decision of 1 July 2020 which was varied by the ARO, the other decisions cannot be reviewed by this Tribunal because no application was made to do so within the 13 week time limit.

26. This is an unfortunate case. The Tribunal echoes the sentiments of both the ARO and AAT-1 that the Applicant should consider making a customer compensation claim under the Compensation for Detriment caused by Defective Administration Scheme. Naturally, this Tribunal expresses no opinion on the prospects of success in making such a claim.

    DECISION

27. Accordingly, the reviewable decision is affirmed.

I certify that the preceding 27 (twenty-seven) paragraphs are a true copy of the reasons for the decision herein of R Cameron, Senior Member

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Associate

Dated: 14 July 2021

Date of hearing:	7 July 2021
Solicitor for the Applicant:	Self-represented
Solicitor for the Respondent:	Tim Noonan, Services Australia