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

[2016] AATA 651

Hobson and Secretary, Department of Social Services (Social services second review) [2016] AATA 651 (29 August 2016) 

Division	GENERAL DIVISION
File Number(s)	2015/3942
Re	Leona Hobson
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Senior Member A Poljak
Date	29 August 2016
Place	Sydney

The Tribunal affirms the decision under review.

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Senior Member A Poljak

CATCHWORDS

SOCIAL SECURITY – Family Tax Benefit – tax return not filed within the 12 month period – whether there are special circumstances that prevented the applicant from filing her tax return – no special circumstances found – decision affirmed

LEGISLATION

A New Tax System (Family Assistance) Act 1999 ss 21, 26

A New Tax System (Family Assistance) (Administration) Act 1999 ss 28, 32B, 32C

CASES

Andrews and Director-General of Social Security [1983] AATA 248

Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Beadle and the Director-General of Social Security (1984) 6 ALD 1
Milroy and Secretary Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 488
Scott v Secretary, Department of Social Security; Scott and Another v Handley and Another [1999] FCA 1774
Scott v Secretary, Department of Social Security [2000] FCA 1241
Secretary, Department of Social Services and Cannon [2015] AATA 1028
Secretary, Department of Social Services and Hollis [2015] AATA 941

Wilson and Director-General of Social Services [1981] AATA 88

REASONS FOR DECISION

Senior Member A Poljak

29 August 2016

INTRODUCTION

1. Ms Hobson was in receipt of Family Tax Benefit (“FTB”) during the 2012/13 financial year. In the ordinary course, she was entitled to receive an FTB ‘top-up’ payment at the end of the financial year after she lodged her tax returns, in this case, before 30 June 2014.

2. It is common ground that Ms Hobson and her partner both lodged their tax returns for the 2012/13 financial year on 4 November 2014.

3. Ms Hobson seeks review of a decision made by the Social Security Appeals Tribunal (“SSAT”), dated 22 June 2015, affirming a decision of the Department of Human Services (“the Department’) made on 5 November 2014 not to pay a FTB top-up payment to Ms Hobson for the 2012/13 financial year because she did not lodge her tax return on time (“the decision”).

4. The issue before the Tribunal is whether the time for Ms Hobson to lodge her 2012/13 tax return, for the purposes of the FTB top-up payment, should be extended to 4 November 2014 by reason of special circumstances which prevented her from lodging it before 30 June 2014.

   LEGISLATION

5. Ms Hobson satisfied the eligibility requirements for the payment of FTB under s 21 of the A New Tax System (Family Assistance) Act 1999 (Cth) (“the Act”). Section 26 of the Act provides that only one member of a couple may be eligible for the payment of FTB.

6. The relevant law at the time is contained in A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (“the AdministrationAct”).

7. Where a person has received instalments of FTB for a particular year, and that person and/or their partner are required to lodge a tax return, but have not done so by the due date, then the Department must determine that there was no entitlement to FTB for that year pursuant to section 28 of the Administration Act.

8. Subsection 28(3)(d) provides that if a person (and/or their partner) lodges their tax return late, after the due date, then the person will only be entitled to the lesser of what they were already entitled to, based on their income estimates at the time, or the recalculated amount.

9. Section 32B of the Administration Act enables there to be reconciliation of entitlement to FTB for the year once the actual income of a couple in that year had been determined. Under s 32B of the Administration Act, reconciliation may be made where Ms Hobson (as the first individual) satisfies s 32C of that Act.

10. Section 32C of the Administration Act deals with reconciliation times for persons who are members of a couple and requires that tax returns be filed by the end of ‘the first income year after the relevant income year’, in this case by 30 June 2014, or pursuant to 32C(3)(b) within:

    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. (emphasis added)

11. In other words, I have discretion to extend the statutory time period for lodging a tax return but only where firstly, there were special circumstances and, secondly, the special circumstances prevented Ms Hobson from filing her tax return by the statutory time period; in this case by 30 June 2014.

    SPECIAL CIRCUMSTANCES

12. The Secretary contends that there were no special circumstances which prevented Ms Hobson from lodging her tax return within the requisite timeframe.

13. Special circumstances are not defined in the Act however the Tribunal is provided some guidance by the decision of Beadle and the Director-General of Social Security (1984) 6 ALD 1 at [3]:

    An expression such as “special circumstances” is, by its very nature, incapable of precise or exhaustive definition.  The qualifying adjective looks to circumstances of unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special (emphasis added).

14. In Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25 at [33], Besanko J explained what is required for there to be special circumstances:

    I also note that the authorities have emphasised time and again the importance of maintaining flexibility in determining what constitutes special circumstances.  The danger is that the test will be overstated if the word ‘exceptional’ is emphasised.  It was not the intention of Parliament to confine the exercise of the discretion to an exceptional case.  There is less risk of overstatement if the words ‘unusual’ or ‘uncommon’ are emphasised.  Those words indicate, correctly in my view, the fact that there must be something that distinguishes the case from the ordinary or usual case.  It may not be easy to postulate the ordinary or usual case other than in quite general terms and, in doing so, close attention must be given to the particular statutory context.

15. Ms Hobson submits that there were two special circumstances which prevented her from lodging her tax return on time. Firstly, she states that she was unaware of the changes to the legislation, reducing the time frame for lodging her tax return from two years to one year; secondly, she relies on the failure of her accountant and bookkeeper to lodge her tax return by 30 June 2014.

16. The Secretary submits that the Department sent a letter to Ms Hobson on 18 March 2014 advising her of the changes to the law and that from the 2012/13 income year onwards, individuals were required to lodge their tax returns within one year instead of two, in this matter, by 30 June 2014. Ms Hobson did not provide any evidence to rebut the service of the letter but maintained at hearing that she did not receive it. Whether or not this is the case, it is immaterial. The information was publicly available and the Department has no statutory obligation to provide her, or any of its clients, with information regarding changes to the law; Secretary, Department of Social Services v Hollis [2015] AATA 941; Secretary, Department of Social Services and Cannon [2015] AATA 1028.

17. As a matter of general principle, ignorance of the law is no excuse for a person’s failure to comply with it. In addition, there is no legal obligation on the Secretary or any Government Department to advise claimants of potential benefits; Scott v Secretary, Department of Social Security; Scott and Another v Handley and Another [1999] FCA 1774. The Tribunal in Milroy and Secretary Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 488 at [19] accepted the rule in Scott as authority for the point that:

    …Centrelink is not responsible for informing any member of the public at large that he or she may be entitled to a social security payment, nor do they require Centrelink to correct errors made by a claimant.

18. On this basis I am satisfied that Ms Hobson’s lack of awareness of the changes to the applicable law does not amount to special circumstances within the meaning of the Administration Act. I note that this is consistent with the approach previously taken by the Tribunal; see Wilson and Director-General of Social Services [1981] AATA 88; Andrews and Director-General of Social Security [1983] AATA 248.

19. Ms Hobson also blames her accountant and bookkeeper for the delay in lodging her tax return on time. If I accept that is so, I am required to determine whether the circumstances amount to special circumstances that prevented the applicant from filing her tax return within the relevant financial year and whether the discretion to extend time should be exercised in her favour.

20. Ms Hobson gave evidence at hearing that she forwarded her and her partner’s books to their bookkeeper and accountant in April/May 2014, with the intention of having their tax returns lodged prior to 30 June 2014. This is supported by a letter from Ms Clyne of Horsham Bookkeeping Services, dated 18 November 2014. In a further letter dated 1 December 2015 from Horsham Bookkeeping Services, Ms Clyne states that the delay in preparing the file for the accountant was due to illness. I accept this evidence.

21. I do not however consider that a mistake or delay as a result of illness by Ms Hobson’s accountant and/or bookkeeper can be properly regarded as a special circumstance that prevented Ms Hobson from lodging her tax return for the 2012/13 income year by 30 June 2014.

22. As far as Ms Hobson was concerned, her bookkeeper and accountant simply failed to file the tax returns in a timely way because of personal and internal issues. Their behaviour did not prevent her from acting; they just failed to act on her instructions. There is nothing unusual or uncommon about that.

23. At hearing, Ms Hobson raised the issue of fairness. She stated that she and her partner were looking after a foster child with serious health problems, including autism, ADHD and post-traumatic stress disorder. She stated that the FTB was used to help with the child’s special needs and that it would be unfair on him not to receive the FTB. No evidence was provided as to how the child’s special needs impacted on Ms Hobson’s ability to lodge her tax return on time. While the Tribunal is sympathetic to the special needs of a child with such conditions, given the lack of evidence I am unable to form a view as to how the child’s conditions prevented Ms Hobson from lodging her tax return on time.

24. When questioned about the financial implications and difficulties of not receiving the FTB, Ms Hobson indicated that she received carer’s allowance from the foster agency but refused to provide further details about the payments received or her financial position. It follows that without having any details or evidence before me about Ms Hobson’s financial circumstances, I cannot determine whether she had financial difficulties and consider if those difficulties amounted to special circumstances which prevented her from lodging her tax return on time.

25. For the reasons given above, I find that Ms Hobson has not satisfied the reconciliation conditions required under s 32C of the Administration Act and is not entitled to the FTB top up and supplement for the 2012/13 income year.

26. I am not satisfied there are special circumstances that prevented Ms Hobson from filing her tax return by the deadline. I therefore affirm the decision under review.

I certify that the preceding 26 (twenty -six) paragraphs are a true copy of the reasons for the decision herein of Senior Member A Poljak

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Associate

Dated 29 August 2016

Date(s) of hearing	15 July 2016
Applicant	In person
Solicitors for the Respondent	Department of Human Services