Hambrook and Secretary, Department of Social Services (Social services second review)
[2016] AATA 424
•24 June 2016
Hambrook and Secretary, Department of Social Services (Social services second review) [2016] AATA 424 (24 June 2016)
Division
GENERAL DIVISION
File Number(s)
2015/4206
Re
Angela Hambrook
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Ms A F Cunningham, Senior Member
Date 24 June 2016 Place Perth The Tribunal remits the matter to the Respondent for reconsideration in accordance with its findings.
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Ms A F Cunningham, Senior Member
CATCHWORDS
SOCIAL SECURITY – parenting payment – family tax benefit – whether applicant principal carer of daughter R during relevant period – whether reasonable steps taken to have child returned to care - overpayments – whether debts are recoverable – administrative or determinative error – decision varied in part – remitted to respondent.
LEGISLATION
A New Tax System (Family Assistance) (Administration) Act 1999 – s16 – s 32A – s 32B – s 32D – s 32D(2)(b) – s 58(1) – s 71 – s 95 – s 95(4)
A New Tax System (Family Assistance) Act 1999 – s 21(1) – s 22 – s 23 – s 23(1) – s 23(5)(a)
Social Security Act 1991 – s 5(15)-(24) – s 500D – s 1223(1) – s 1236 – s 1236(1C) – s 1237A – s 1237AAD
CASES
Angelakos and Secretary Department of Employment and Workplace Relations [2007] FCA 25
Beadle and Director- General of Social Security (1984) 6 ALD 1
Dranichnikov v Centrelink [2003] FCAFC 133
Groth and Secretary Department of Social Security (1995) FCA 1708
REASONS FOR DECISION
Ms A F Cunningham, Senior Member
24 June 2016
BACKGROUND
The applicant is the mother of a child, R who was born on 31 August 1998. The applicant and R’s father have never lived together. The applicant has been in receipt of social security benefits and irregular child support payments from R’s father. The applicant worked in the hospitality industry often during the evenings and the weekends until serious health problems caused her to cease working. The applicant’s parents were very supportive and used to care for R when the applicant was working. R spent a lot of time at her grandparents’ home where she has her own bedroom.
On 18 September 2012, R left the applicant’s care to live with the applicant’s parents. At the time, the applicant was in receipt of parenting payment single (PPS). The applicant continued to receive PPS for the period 18 September 2012 until 4 December 2012 (loss of care debts).
On 7 June 2014, the Department of Human Services (the department) raised a PPS debt of $2829.41 as well as a Family Tax Benefit (FTB) debt of $966.51 being FTB paid to the applicant from the period 18 September 2012 to 19 December 2012. Following a reconciliation of the applicant’s entitlement to FTB on 28 October 2014, the department raised an FTB debt of $1611.99 for the period 1 July 2012 to 19 December 2012 (the FTB reconciliation debt). This debt was raised on the basis that the applicant was entitled to less FTB than she had received, due to differences between an estimated and actual income for the 2012/2013 year. The debts also arose in part because the applicant had not complied with the time limit required in which to lodge her taxation return.
The applicant requested a review of the department’s decision. The Authorised Review Officer (ARO) of the department affirmed the decision with respect to the FTB debts but varied the decision to the extent that recovery of that part of the PPS debt incurred between 1 November 2012 and 6 November 2012 be waived.
On 10 March 2015, the applicant sought review by the first tier reviewer. On 22 July 2015, the first tier reviewer affirmed the ARO decision with respect to the raising and recovery of the FTB debts but varied the decision regarding recovery of the PPS debt for the period between 1 November 2012 and 4 December 2012.
The applicant now seeks a review of the decision by this Tribunal.
The hearing was conducted by way of video link to the Perth Registry. The applicant was represented by Chris Belcher and gave oral evidence before the Tribunal. The applicant submitted further documentation in support of her application for review. The respondent was represented by Ashley Burgess. The applicant submitted the T documents pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 and called no further evidence.
ISSUES
The issues for the Tribunal to determine are:
PPS debt
·Whether the applicant was the principal carer of her daughter R from 18 September 2012 to 4 December 2012;
·Whether the applicant was overpaid PPS for the period 18 September 2012 to 4 December 2012 and whether such overpayment constitutes a debt to the Commonwealth; and if so
·Whether the debt should be waived in part or in whole.
FTB debt
·Whether R was the FTB child of the applicant from 18 September 2012 to 19 December 2012;
·Whether the applicant satisfied the requirements of FTB Part A and Part B supplement upon reconciliation which requires consideration as to whether the applicant was required to lodge a tax return by 30 June 2014; or whether there are any special circumstances which prevented her from doing so.
·Whether the applicant was overpaid FTB for 2012/2013 income year and whether such overpayment constitutes a debt to the Commonwealth; and if so
·Whether the debt should be waived in part or in whole.
LEGISLATION
The relevant legislation is contained in the Social Security Act 1991 (the Act); the A New Tax System (Family Assistance) Act 1999 (the Family Assistance Act); and the A New Tax System (Family Assistance) (Administration) Act 1999 (the FAA Act).
Qualification for PPS
The qualification provisions for parenting payment are contained in Part 2.10 of the Act. A PP child is defined in section 500D of the Act as:
(1) A child is a PP child of a person if:
(a)the child is a child of the person; and
(b)the person is a member of a couple; and
(c)the child has not turned 6; and
(d)the person is the principal carer of the child.
(2) A child is a PP child of a person if:
(a)the child is a child of the person; and
(b)the person is not a member of a couple; and
(c)the child has not turned 8; and
(d)the person is the principal carer of the child.
A principal carer is defined in subsections 5(15)-(24) of the Act. Subsection 5(15) requires that the child is a dependent of the person and in the person’s care. Subsection 5(17) states that a child is taken to remain in the person’s care if at the start of a period not exceeding 8 weeks, the child leaves the person’s care and throughout the period the child is the dependent child of another person and the child returns, or the Secretary is satisfied that the child will return to the first person’s care at the end of the period. This provision is not relevant in this case as R did not return to the applicant’s care and nor is there evidence that the Secretary could be satisfied that R would return to her care.
It was the applicant’s evidence that R ceased to be in her care from 18 September 2012 and had not returned to her care during the period 18 September 2012 and 4 December 2012 when her payment ceased. Therefore, from 18 September 2012 the applicant was not qualified to receive PPS for her daughter R.
Qualification for FTB
The eligibility provisions for FTB are contained in Part 1 of the Family Assistance Act. Subsection 21(1) states that an individual is eligible for FTB if the individual has the care of at least one FTB child.
Pursuant to section 22 of the Family Assistance Act, R is the applicant’s FTB child if during the relevant period she is aged under 16; is in the applicant’s care; and the applicant has legal responsibility for her. As R was not in the applicant’s care from 18 September 2012, she could not be considered as the applicant’s “FTB child” for the purposes of section 22 of the Family Assistance Act for the period 18 September 2012 to 19 December 2012.
Of relevance are the provisions of section 23 of the Family Assistance Act which provide the circumstances where a child can remain a FTB child despite being removed from the person’s care. Subsection 23(1) of the Family Assistance Act provides:
(1) This section applied if:
(a)an individual is an FTB child of another individual (the adult) under subsection 22(2) or (3); and
(aa) the circumstances surrounding legal responsibility for the care of the individual are those mentioned in paragraph 22(5)(a) or (b); and
(b)an event occurs in relation to the child without the adult’s consent that prevents the child being in the adult’s care; and
(c)the adult takes reasonable steps to have the child again in the adult’s care.
Of particular relevance in this case are subsections 23(1)(b) and (c) of the Family Assistance Act. If the Tribunal is satisfied that such “an event” occurred and that the applicant took “reasonable steps” to have R returned to her care, the applicant would remain qualified for FTB for a period of up to 14 weeks after the change of carer event occurred. (s23(5)).
The Social Security Appeals Tribunal (SSAT) was not satisfied that the applicant had taken reasonable steps to have R returned to her care on the basis that she had only contacted the Department of Child Protection (DCP) and Legal Aid after her interview with the Centrelink social worker which was some six weeks after the initial event. Accordingly, the Tribunal found that R ceased to be an FTB child of the applicant from 18 September 2012.
APPLICANT’S EVIDENCE
In the applicant’s witness statement she stated that on 18 September 2012, R’s school contacted her and informed her that R had not been attending school for at least 70 days that year. The applicant telephoned her mother and discovered that her parents were aware that R had not been going to school and they felt it was best if R stayed with them permanently. The applicant concluded that her parents had been actively encouraging R not to attend school and was accordingly very upset and angry. She went to see her parents that day and an altercation ensued which resulted in her father falling and hitting his head. The applicant’s mother told her to leave their house.
Shortly after the applicant arrived home the police arrived and informed her that she was being arrested under the provisions of the Mental Health Act. The applicant claims that she was forced into an ambulance by the police and taken to the Royal Perth Hospital where she was detained as an involuntary patient and administered sedative medication under the Mental Health Act provisions.
The applicant claims that the police advised her not to return to her parent’s house but to leave her daughter there. She was subject to a 72 hour restraining order which prevented her from physically going to her parent’s house. After being discharged from hospital on 19 September 2012 the applicant was referred by her doctor for an urgent ultrasound for her injured shoulder with a suspected blood clot. The applicant claims that she tried to contact her daughter by telephone on a number of occasions but that the mother had refused to allow her to speak to R.
The applicant states that on 20 September 2012 she telephoned R’s school hoping to speak to R but was advised that R was still not attending school. When the applicant telephoned her mother’s house, her mother refused to allow her to speak to R or discuss why R was not attending school.
The applicant claims that she contacted the DCP and advised them of the situation. They said that they would call her back but did not do so. The applicant says that she rang on at least four occasions. She also left a message with R’s psychologist to contact her. The psychologist subsequently advised that she was unable to discuss R’s situation with her because it would jeopardise her relationship with R.
The applicant states that on 21 September 2012 she contacted Legal Aid and was advised to take out a recovery order but that before taking this action, she should try to “work things out”. The applicant was reluctant to take legal action against her parents because she was concerned that it would “only make things worse”. The applicant believed that once things calmed down, she would be able to work things out with her parents and R would return to her care.
On September 2012 the applicant says that she finally spoke to her daughter by telephone. Unfortunately, it was not a positive interaction because R informed the applicant that she hated her and was never coming home. The applicant states that it appeared that R wanted to stay with her parents because they let her do whatever she wanted and didn’t impose rules and boundaries. The applicant was very upset as R had never told her before that she hated her. She was concerned about R’s state of mind and concerned that she might commit suicide. The applicant decided to leave things for a few days hoping that things would calm down and the situation could be resolved with R returning home as she had done on previous occasions.
On 26 September 2012 the applicant contacted Centrelink for an emergency advance payment because she had not been able to work and had medication and medical bills to pay. The applicant believes that she told Centrelink then that she was having problems with her daughter. On 4 October 2012 the applicant gave her mother her parenting payment of $511.10 hoping that this would assist in sorting things out.
The applicant said that in discussions with R’s father, they had decided to enrol R in a private school for the following year. R’s father had suggested that his child support payments be used towards the private school fees and it was agreed that he would make no further payments to the applicant until R had returned to her care. The applicant’s mother had agreed to take R to her father’s place on 9 October 2012 and the applicant gave her money for petrol. It was shortly after this, that the applicant visited the Morley Centrelink office and informed them of the situation. When the applicant informed the office that she had paid her PPS payments to her mother, she was advised that she should not have done this and she should make an appointment to see a social worker. Her initial appointment dated of 31 October 2012 was subsequently changed to 1 November 2012.
The principal of R’s school contacted the applicant on 17 October 2012 and advised that R had apparently taken an overdose the previous evening. Out of concern, the applicant contacted the police who advised that they would “do a welfare check on R”. On 18 October 2012, the applicant states that she contacted the DCP regarding her concerns for R and was unable to get any help and did not know what else she could do.
At paragraph [45] of her statement, the applicant lists the following contacts: R’s psychologist on 20 September 2012, 13, 21, 25 and 29 October 2012; Legal Aid on 21 September 2012, 7 and 12 November 2012; Zoe at Parenting Line on 18 October 2012; The Family Relationships Advice Line on 18, 19, 20, 22 and 24 October 2012 when she spoke to a legal representative; The Passport Information Line on 22 and 24 October 2012 (about cancelling R’s passport).
On 24 October 2012 the applicant states that she received a letter from Centrelink for an appointment with a social worker at the Midland office on 1 November 2012. On 1 November 2012 the applicant made an application to Chisholm College for R to attend in 2013 and paid an application fee of $85. The applicant advised R’s father accordingly and R signed the enrolment application form on 2 November 2012.
The applicant claims that she saw a social worker, Lateah, at Midland Centrelink and advised of the circumstances and her concern for her daughter. The social worker advised that she would follow things up with the DCP. She suggested that the applicant take legal action and referred her to Legal Aid. After conferring with another officer at Centrelink, it was decided that the applicant’s payments would continue for a further 14 weeks and that the applicant was to keep Centrelink informed.
The applicant states that on 6 November 2012 she was informed by the principal of R’s school that R was now attending Morley High School and had been enrolled there since 1 November 2012. The applicant was advised that her mother had alleged that the applicant had been physically abusing R. After telephoning Morley High School the applicant was informed that her mother had advised that she would provide the school with a Court order on 7 November 2012. After consulting Legal Aid on 7 November 2012 and checking the Family Court website listings, the applicant discovered that there was an ex parte hearing scheduled for that morning regarding an application by her mother for custody of R. The applicant was advised by Legal Aid to lodge an objection which she did and attended their earliest available appointment on 12 November 2012.
The applicant had been advised by the Family Court that the final hearing was set down for 3 December 2012 with a mediation conference scheduled for 20 November 2012. The applicant subsequently left a message with the Centrelink social worker to return her call. The applicant finally spoke to the Centrelink social worker, Lateah on 8 November 2012 who said that she would check and advise whether her payments could continue. The applicant subsequently received a telephone message with advice from Lateah that payments would continue.
On 20 November 2012, the applicant states that she attended the case assessment conference at the Family Court. On 30 November 2012, the applicant contacted the Child Support Agency and cancelled the child support payments for R. On 5 December 2012, the applicant attended the Family Court hearing and a further date was set for 23 January 2013. On 6 December 2012, the applicant advised the Centrelink social worker Lateah, that the DCP had placed R temporarily with her mother and that the next court date was scheduled for 23 January 2013.
The applicant received a further PPS payment for R on 6 December 2012. The applicant spoke to Lateah on 20 December 2012 and suggested that her FTB payments be continued and that she would forward the payments to her mother because she still believed that R would return to her care. She was advised against this by Lateah who suggested that her mother make her own claim for payments for R. The final FTB payment received by the applicant for R was on 24 December 2012, in the sum of $64.06.
On 23 January 2013, the Family Court application was adjourned again until 5 March 2013. Prior to the Court date in March, the applicant said that she decided not to continue with her application as it was obvious that R did not want to live with her. The whole matter was affecting her mental health and causing financial strain. She subsequently advised the Family Court that she would withdraw her opposition to the application for custody of R and consent orders granting custody of R to her parents were entered on 5 June 2013.
On 17 May 2013, a letter was forwarded to the applicant from Centrelink enclosing a series of questions regarding the circumstances in which R left her care and action that she had taken to have R returned to her care. The applicant answered the questions and annexed further information (T5, pp 76-80).
CONSIDERATION AND FINDINGS
The applicant’s evidence was that R had periodically spent considerable periods of time with her parents often staying overnight, particularly when R was younger and the applicant was required to leave for work early in the morning or work late at night. The applicant said that her daughter effectively had “a second home” at her parents’ house. The applicant said that after R continued to stay with her mother from 18 September 2012, the applicant believed that R was “just having time out” and would return home in due course.
The applicant had stated at paragraph [23] of her statement that in August 2012 she had discovered that R was self-harming. She spoke to R’s psychologist who advised that she should allow R to spend more time away from her and allow R to stay over at her parents’ home if this is what R wanted. The applicant had also spoken to R’s father who said that he would look after R during the school holidays.
R’s father did not think that the local high school was good for R and they discussed the possibility of moving R to a private school. It would appear that her fears were confirmed when she was contacted by R’s school on 18 September 2012 about R’s prolonged absences. It was the applicant’s evidence that she understood that her mother would ensure that R attended school on the days that she had stayed overnight with her. She was not previously aware that R was not attending school on those occasions.
The applicant became particularly concerned, when she learned that her mother had instituted legal proceedings with the Family Court for R’s custody. It was with reluctance and sadness that she finally consented to the custody order after realising that R did not wish to live with her. It was the applicant’s evidence that she had continued to pay private health insurance for R because she had believed and hoped R would return to live with her. The applicant informed the Tribunal that she now enjoys a good relationship with her daughter as well as her mother who has assisted her in caring for her son whilst she recovered from her injuries.
The issue for the Tribunal to determine is whether it can be satisfied that “an event” occurred preventing R from being in the applicant’s care and whether the applicant took “reasonable steps” to have R returned to her care.
Up until 18 September 2012, R had been assessed in accordance with the provisions of section 22 of the Family Assistance Act as the FTB child of the applicant who was in receipt of FTB payments. It was accepted that the applicant was the adult legally responsible for R’s day-to-day care, welfare and development. Thus the provisions of subsections 23(1)(a) and (aa) of the Family Assistance Act appear to be satisfied. It is contended, on behalf of the applicant that the evidence of the circumstances in which R ceased to be under the care of the applicant supports a finding that the remaining criteria of subsections (b) and (c) are satisfied.
The first question for the Tribunal is whether there was “an event” that occurred that prevented R from being in the applicant’s care. It was the applicant’s evidence that she attended her parents’ house where her daughter R had been staying to confront them about her school absences. A serious altercation resulted in which her father was injured and R informed the applicant that she did not want to return home with her. Shortly after the applicant arrived home the police attended and forcibly transported her in an ambulance to hospital where she was involuntarily detained under the provisions of the Mental Health Act. It was the applicant’s evidence that her shoulder was seriously injured by the police during the forcible removal from her home. The applicant was sedated and detained in hospital overnight. After her discharge she sought urgent medical attention for her injured shoulder.
It was the applicant’s evidence that she tried to contact R by telephone on a number of occasions but her mother refused to allow her to speak to her daughter. The applicant telephoned her daughter’s school to try and speak to her but was told that R was still not attending school. The applicant also contacted the DCP on a number of occasions, left a message for R’s psychologist to contact her and sought legal assistance. She declined Legal Aid’s advice to take out a recovery order believing that legal action against her parents would only make matters worse. She believed that once things had calmed down, R would return to her care. She finally spoke to her daughter on 22 September 2012 when she told the applicant that she hated her and would never return home. The applicant said that she was reluctant to force the issue because R had on prior occasions attempted suicide and she was concerned for her welfare and state of mind. It was the applicant’s evidence that she believed that R would eventually return home as she had done in the past.
On the basis of this evidence which was not contested, the Tribunal is satisfied that “an event” occurred on 18 September 2012 and in the ensuing days which prevented the child R returning to the applicant’s care. As from this date, R was clearly in the care of the applicant’s parents without the applicant’s consent. Following the altercation at her parents’ home, the applicant was forcibly detained in hospital and unable to take steps to have R returned to her care. The Tribunal is satisfied on the evidence that in the days and weeks following the event on 18 September 2012, the applicant took all reasonable steps in the circumstances to have R returned to care, not wishing to make the situation with her parents any worse, mindful of her daughters suicide attempts, and always hopeful that R would voluntarily return to her care as she had done in the past.
Throughout this period the applicant telephoned numerous agencies for assistance including the DCP, to try and resolve the issue and to make sure that R was alright. There is simply no evidence that the applicant acquiesced in the change in care arrangements for R and reluctantly agreed to a custody order in favour of her parents when she accepted that R did not wish to return to live with her. R was aged 14 years at the time and the evidence is that she made her wishes abundantly clear to the applicant who was understandably reluctant to have R forcibly returned to her care. The SSAT was not satisfied that the applicant had taken reasonable steps to have R returned to her care stating that the applicant appeared to have only contacted DCP and Legal Aid after her interview with the Centrelink social worker, which was some six weeks after the initial event. This however was not the evidence presented to this Tribunal as outlined above.
In accordance with the above findings the Tribunal determines that R continued to be an FTB child despite being removed from the applicant’s care and the applicant thus remained qualified for FTB for a period of 14 weeks as from 18 September 2012.
FTB reconciliation debt
The nature of the applicant’s FTB claim was payment by instalment determined in accordance with section 16 of the FAA Act with respect to the 2012/2013 income year. Section 58(1) of the FAA Act provides that the annual rate of FTB is calculated in accordance with the rate calculator in schedule 1 to the Family Assistance Act. Clauses 3 and 25 of Schedule 1 provide for the inclusion of a Part A supplement in the calculation of the rate of FTB Part A and clause 29 provides for the inclusion of a Part B supplement in the rate of FTB Part B.
Section 32A of the FAA Act makes provision to the effect that FTB Part A supplement and FTB Part B supplement are to be disregarded in the calculation unless and until the individual has satisfied the FTB reconciliation conditions. Section 32B of the FAA Act prescribes when the FTB reconciliation conditions are satisfied. As the applicant was not a member of a couple the relevant provision is section 32D prior to its amendment on 28 June 2013.
There is no dispute that the applicant failed to lodge her income tax return for the 2012/2013 income year within the requisite two year period, having lodged her tax return with the Australian Tax Office on 9 October 2014. the applicant relies on the provisions of subsection 32D(2)(b) which provide as follows:
(2) The relevant reconciliation time is the time when an assessment is made under the Income Tax Assessment Act 1936 of the first individual’s taxable income for the relevant income year, so long as the first individual’s income tax return for the relevant income year was lodged before the end of:
(a) the first income year after the relevant income year; or
(b) such further period (if any) as the Secretary allows, if the Secretary is satisfied that there are special circumstances that prevented the first individual from lodging the return before the end of that first income year.
The term “special circumstances” is not defined in the FAA Act or in related legislation but has been extensively considered in case law. (See Beadle and Director-General of Social Security (1984) 6 ALD 1; Groth and Secretary Department of Social Security [1995] FCA 1708; Angelakos and Secretary Department of Employment and Workplace Relations [2007] FCA 25). The term is commonly accepted as meaning circumstances which are unusual, uncommon or exceptional such to distinguish them from the ordinary or usual case.
The applicant contended that the special circumstances in her case that prevented her from lodging her return within the required timeframe were that she was unaccustomed to lodging her own taxation returns and that her mother usually attended to this on her behalf; the birth of her son on 7 November 2013 following a difficult pregnancy and no contact with the child’s father; and a number of health problems that occurred throughout 2012 and 2013.
The applicant does not dispute that she received correspondence from the Department on 10 February 2014 and 17 March 2014 reminding her of the requirement to lodge her tax return by 30 June 2014 in order to ensure that she was paid her full FTB entitlement.
The Tribunal does not consider that the circumstances referred to by the applicant as outlined above are particularly unusual or uncommon such as to constitute “special circumstances” preventing her from lodging her taxation return within the requisite timeframe. As pointed out by the respondent, it is not uncommon or unusual for a person to have to lodge their own tax return for the first time. Further, regarding the fact that the applicant had a new child, the majority of FTB recipients will have had to lodge a tax return within a year of giving birth to a child in order to become or remain qualified for the benefit. The applicant did not submit any medical evidence in support of her contention that her health problems had prevented her from attending to the lodgement of her tax return by the requisite date. There is no evidence that despite being advised by the Department on two occasions of the requirement to lodge her tax return by 30 June 2014, the applicant made no enquiries or took any steps to ensure that this was done.
In accordance with these findings, the Tribunal determines that the applicant was not entitled to the FTB supplements for the 2012/2013 income year and that a debt for the overpayment was correctly raised. The reconciliation process resulted in a debt being raised against the applicant in the sum of $1611.99. This was because, based on the income reported in her tax return, the applicant was paid more FTB (based on her income estimates) than she was entitled to during the 2012/2013 income year. The Tribunal was advised that the full amount of the debt has since been recovered from the applicant.
CONCLUSION
Ms Belcher on behalf of the applicant submitted that there had been a number of variations in the determinations from the respondent regarding the calculation of the debts. As the calculation of the debts was not an issue in the reviewable decision, this Tribunal has no jurisdiction to review the calculation process.
In accordance with the above findings and the provisions of subsection 1223(1) of the Act and section 71 of the FAA Act, the Tribunal determines that the applicant has been overpaid the following:
·PPS for the period 18 September 2012 to 4 December 2012;
·FTB for the period 1 July 2012 to 19 December 2012 (the reconciliation debt).
In accordance with the above provisions the overpayments constitute legally recoverable debts. The next question for the Tribunal is whether the debts should be recovered or whether there is any basis for waiving either part of or the whole of the debts.
RECOVERY OF THE DEBTS
Section 1236 of the Act provides that a debt may be written off for a stated period or otherwise, subject to the provisions of subsection (1A). This subsection provides that a debt may be written off if it is either irrecoverable at law; the debtor has no capacity to repay the debt; the debtor’s whereabouts are unknown; or it is not cost-effective for the Commonwealth to take action to recover the debt. Similar provisions are provided in section 95 of the FAA Act.
Section 1236(1C) of the Act provides that if the debt is recoverable by means of deductions from the debtor’s social security payment, the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship. It is noted that the FTB debts have been recovered in full. There was no persuasive evidence that the recovery of the repayments caused the applicant severe financial hardship. Accordingly the provisions of section 95(4) of the FAA Act are not met in that it cannot be demonstrated that the applicant does not have a capacity to repay the debt.
The first-tier reviewer found that the portion of the outstanding balance of the PPS debt as at 1 November 2012 arose due to an error by the Department. The first-tier reviewer found that the applicant had contacted the Department on 1 November 2012 to advise that R had left her care without her consent. The social worker report dated 1 November 2012, confirmed this advice.
The issue of administrative error was considered by the Full Court of the Federal Court in Dranichnikov v Centrelink [2003] FCAFC 133 where it said at paragraph [62]:
It is neither possible nor appropriate to attempt a meaning of the words “administrative error” which would accurately cover every case for much will turn upon the circumstances. Essentially, however, the concept is one where the error or mistake arises as a result of the procedure that has been adopted. An obvious example would be payment of benefit where the decimal point was wrongly located. An error made by Centrelink or the Australian Taxation Office acting on its behalf in its administration of the law will generally be an administrative error. On the other hand, a decision made, for example, on a question of legal entitlement to a benefit while no doubt made in the course of administration of the law would not be an administrative error…
Consistent with this statement by the Federal Court, it was submitted on behalf of the Secretary that the Department’s error in continuing to pay PPS to the applicant despite her advice that R was no longer in her care did not constitute an “administrative error” but rather a “determinative error”. The error made was regarding the question of legal entitlement to the benefit although made in the course of administration of the law.
The Tribunal is bound by the decision of the Full Court of the Federal Court and accordingly finds that the PPS debt cannot be waived under section 1237A of the Act.
However, the Tribunal considers that the debt should be waived pursuant to the provisions of section 1237AAD of the Act on the basis of the special circumstances of this case. The Tribunal is satisfied that the provisions of subsection (a) are satisfied in that the debt did not result from the applicant making a false statement or false representation or failing to comply with a provision of the Act. The circumstances that the Tribunal considers are particularly unusual in this case are that, had the Department made a determination at the time when the applicant advised that R was no longer in her care and therefore not entitled to PPS, the applicant would have been in a position to claim another payment e.g. Newstart Allowance. The applicant was however advised at the time that she was entitled to and would continue to be paid her PPS benefit until such time as the custody dispute was settled in the Family Court.
The Tribunal agrees with the conclusion of the SSAT that the determinative error made by the Department precluded the applicant from claiming an appropriate benefit from 1 November 2012. This unjust outcome constituted a special circumstances such as to justify a waiver of the debt that arose in the period 1 November 2012 to 4 December 2012. The Tribunal, however, is not satisfied that there are special circumstances with respect to the FTB debts (which have been fully recovered) that would make it desirable to waive recovery.
In summary, the findings of the Tribunal are as follows:
(i)That the decision to raise a PPS debt be affirmed on the basis that the applicant was not qualified to receive PPS for her daughter R during the period 18 September 2012 to 4 December 2012.
(ii)On the basis that the Tribunal is satisfied that “an event” occurred preventing R from being in the applicant’s care and further that the applicant took “reasonable steps” to have R returned to her care, the Tribunal finds that R continued to be an FTB child for a period of 14 weeks from 18 September 2012, in accordance with s23(5) of the Family Assistance Act.
(iii)That part of the PPS debt that arose from 1 November 2012 to 4 December 2012 be waived on the basis of the special circumstances of the applicant’s case.
(iv)That the decision under review to raise and recover the FTB reconciliation debt be affirmed.
DECISION
The Tribunal accordingly remits the matter to the Secretary for reassessment in accordance with the above findings.
I certify that the preceding 68 (sixty-eight) paragraphs are a true copy of the reasons for the decision herein of Ms A F Cunningham, Senior Member
.....[Sgd]...................................................................
Administrative Assistant
Dated 24 June 2016
Date of hearing 31 March 2016 Advocate for the Applicant Ms C Belcher Representative for the
ApplicantWelfare Rights & Advocacy Service Representative for the
RespondentMr A Burgess
Solicitors for the Respondent
Sparke Helmore Lawyers
Key Legal Topics
Areas of Law
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Administrative Law
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Statutory Interpretation
Legal Concepts
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Judicial Review
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Jurisdiction
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Procedural Fairness
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Standing
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Statutory Construction
-
Remedies
1
1
0