Hoffman and Secretary, Department of Family and Community Services
[2004] AATA 377
•15 April 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 377
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2003/210
GENERAL ADMINISTRATIVE DIVISION
)
Re THELMA MABEL HOFFMAN Applicant
And
SECRETARY, DEPARTMENT
OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Mr RG Kenny, Member Date15 April 2004
PlaceBrisbane
Decision The Tribunal dismisses the application on the basis that it has no jurisdiction to determine the matter.
..................(Sgd).......................
RG Kenny
Member
CATCHWORDS
Social Security – claim for self funded retirees supplementary bonus – categories of claimant – whether applicant an ATO client or Family and Community Services customer – scope of decision under review – jurisdiction to review decision
A New Tax System (Bonuses for Older Australians) Act 1999 ss 34, 37, 41, 42, 43, 44
Social Security Act 1991
Social Security (Administration) Act 1999 s179Taxation Administration Act 1953 Part IVC
REASONS FOR DECISION
15 April 2004 Mr RG Kenny, Member Application
1. Thelma Hoffman (the applicant) received income support payments under the Social Security Act 1991 in the form of disability support pension from 1 April 2000 until 18 April 2000 and then age pension from 19 April 2000 until 30 June 2000. On 10 November 2000, she was advised by a letter from the Australian Taxation Office (ATO) that she was not able to receive payment of the self funded retirees supplementary bonus (SFRS bonus) because of the income support payments that she had received in 2000. In subsequent interviews with Centrelink staff in Toowoomba and in telephone conversations with Centrelink staff, the applicant was again advised that she was not eligible to receive the SFRS bonus.
2. The matter was referred to an authorised review officer who nominated 7 December 2001 as the date of the rejection decision (T8/23) and who, on behalf of the Secretary, Department of Family and Community Services (the respondent), affirmed the decision on 17 September 2002 (T13). The matter was then heard by the Social Security Appeals Tribunal (SSAT) on 4 February 2003 which determined that it did not have jurisdiction to decide the matter although it proceeded to deliver what it described as an “advisory opinion” on the merits of the applicant’s case (T2).
3. On 7 March 2003, the applicant sought review of the SSAT decision by the Administrative Appeals Tribunal (the Tribunal) (T1).
Hearing
4. At the hearing, the applicant was not represented but appeared with her husband, Alan Hoffman, who also gave evidence. Mr James Howard, Advocate from the Advocacy and Administrative Law Team, appeared for the respondent.
5. In evidence were the T Documents (T1 – T18) (Exhibit 1) as well as the following:
Exhibit 2 - a letter, dated 10 November 2000, from the ATO to the applicant;
Exhibit 3 - a taxation return for the 1999/2000 financial year for Alan Hoffman;
Exhibit 4 - a taxation return for the 1999/2000 financial year for the applicant; and
Exhibit 5 - Centrelink file material relating to the applicant.
The SFRS bonus andscheme
6. The SFRS bonus was one of two components of a payment which was made available by the Commonwealth under the A New Tax System (Bonuses for Older Australians) Act 1999 (the NTS Act). The SFRS bonus was an amount of up to $2000 and the other component of the payment was an aged person’s savings bonus of up to $1000. The NTS Act identified three categories of eligible recipients. One category, not relevant in this matter, is that of Veterans’ Affairs customers. The other categories are Family and Community Services customers and ATO clients. Sections 23 and 37 of the NTS Act provide for the making of a proper claim and set out the relevant qualifying criteria for claimants. The categories of Family and Community Services customers and ATO clients are mutually exclusive with a distinction resting upon whether or not a potential recipient was required to lodge an income tax return for the 1999/2000 financial year. Persons required to lodge a return are ATO clients. In this case, the applicant was required to lodge such a document and a copy thereof was in evidence (exhibit 4). Section 37 of the NTS Act reads:
“37. Making a proper claim
(1) An individual who wants to be paid a bonus payment under this Part must make a proper claim for the payment.
(2) A claim by an individual for a bonus payment under this Part is a proper claim if:
(a) either:
(i) he or she is required to lodge an income tax return for the 1999-2000 income year; or
(ii) he or she is not required to lodge an income tax return for that income year, but lodges such a return and makes the claim at the same time or afterwards, provided that he or she had not made a proper claim for a bonus payment under Part 2 or 3 before lodging the return; and
(b) the claim is made after 30 June 2000 and before 1 July 2001; and
(c) the claim specifies either 1 qualifying year, or both qualifying years, in respect of which the individual claims he or she is qualified for a bonus payment; and
(d) the claim is in a form (which may be an electronic form) approved by the Commissioner; and
(e) the claim is sent to or lodged at an office of, or a place approved by, the Commissioner.
(3) An individual who makes a proper claim is an ATO client.
(4) If the claim specifies 1 qualifying year in respect of which the ATO client claims he or she is qualified for a bonus payment, he or she cannot later vary the claim to specify the other qualifying year.
7. The procedure for determining a proper claim of an ATO client is set out in sections 42 to 44 of the NTS Act which read:
“42 Commissioner to determine proper claim
The Commissioner must, in accordance with this Part, determine whether or not a proper claim is to be granted.
43 Grant of proper claim
(1) The Commissioner must determine that a proper claim is to be granted if the Commissioner is satisfied that the ATO client is qualified for a bonus payment under this Part.
(2) The Commissioner must give written notice of the determination to the ATO client. The notice must:
(a) state that he or she is qualified for a bonus payment; and
(b) specify the qualifying year or qualifying years in respect of which he or she is so qualified; and
(c) specify the amount of the bonus payment and how it was worked out; and
(d) state that he or she may object against the determination in the manner set out in Part IVC of the Taxation Administration Act 1953
44 Refusal of proper claim
If the Commissioner determines that a proper claim is not to be granted, the Commissioner must give written notice of the determination to the ATO client. The notice must:
(a) state that he or she is not qualified for a bonus payment; and
(b) state the reasons for the Commissioner's determination; and
(c) state that he or she may object against the determination in the manner set out in Part IVC of the Taxation Administration Act 1953.
8. The qualifying criteria for the SFRS bonus are set out in sub-section 41(3) of the NTS Act. This provision precludes payment if the ATO client received a disqualifying payment at any time during the 1999/2000 financial year and that term is defined in section 34 of the NTS Act to include a social security benefit or pension as provided for in the Social Security Act1991. In this case, the ATO granted the applicant’s claim in respect of the aged persons saving bonus in the maximum amount of $1000 but rejected her claim for the SFRS bonus on the basis of her receipt of income support payments under the Social Security Act1991 during the period from 1 April 2000 on 30 June 2000. The applicant was notified of this decision in a letter dated 10 November 2000 (exhibit 2) and, therein, she was also provided with the following information about her review rights if she did not agree with the decision:
“If you think our decision is incorrect, check the information in the booklet and the details in this notice. If you still think it is incorrect, you may lodge an objection with the Commissioner of taxation within 13 weeks on the date of this notice. The objection must be in writing and state in full the reasons for your objection.”
Applicant’s case
9. The applicant accepted that she had received payments of disability support pension from 1 April 2000 until 18 April 2000 and of age pension from 19 April 2000 30 June 2000. However, she said that these had been made when they were not properly payable to her and that, therefore, they should not be taken into account as disqualifying her for the purposes of receiving the SFRS bonus. In relation to the age pension, she said that this had been acknowledged by the respondent who, in September 2000, had cancelled her age pension because of the level of the assets and income of herself and her husband. She submitted that the same test should be applied to the payments of her disability support pension and that, therefore, even though these monies had been received by her, they should not defeat her claim for the SFRS bonus.
10. The applicant said that she could not recall making the initial claim for the SFRS bonus herself but thought that it had been made on her behalf by her accountant. She could not recall appealing the decision which was set out in the letter from the ATO in November 2000. She said that she recalled discussing the matter with Centrelink staff in Toowoomba and being told that she was not eligible for the SFRS bonus. She said that, in March 2001, she had requested that Centrelink review her entitlement to the income support payments that she received in 2000 but had been told that the disability support pension had been correctly paid to her and that, as a result, she was not able to receive the SFRS bonus. She said that, when she requested that this decision be reviewed by the SSAT, it was for the purposes of determining whether she was properly qualified for the disability support pension during the period when she received it.
11. In their evidence, both the applicant and her husband agreed that they had lodged taxation returns for the 1999/2000 financial year and had been required to do so by the ATO. They identified, as being the relevant documents, Exhibits 3 and 4, respectively. The applicant said that she could recall making the claim for her disability support pension and that it was initially rejected but then accepted by the respondent which made payments to her from 1 April 2000 until 18 April 2000. She said that this changed to the age pension when she reached the appropriate age. The applicant and her husband were critical of the approach adopted by the respondent in the matter and submitted that an amount greater than the SFRS bonus had probably been expended by it in the process of rejecting her claim.
Respondent’s case
12. Mr Howard submitted that there were two issues raised by the applicant in this matter. The first of these was whether or not her disability support pension should have been paid to her and the second of these was whether she was eligible to receive the SFRS bonus. He conceded that the age pension had been incorrectly paid to the applicant, that this had been discontinued and that the amount paid inadvertently had not been the subject of recovery action from the applicant.
13. In relation to the first of those issues, Mr Howard submitted that this was not a matter that had been dealt with by the SSAT and that, therefore, it was not a matter which could be the subject of review by the Tribunal because it did not fall within the terms of section 179 of the Social Security (Administration) Act 1999 (the Administration Act). In relation to the second of the issues, Mr Howard submitted that the applicant was an ATO client and, as such, was required to comply with the review processes set out in sections 42 to 44 of the NTS Act. He submitted that this required a written objection to be made with the Commissioner of Taxation within 13 weeks of the initial decision to reject a claim for the SFRS bonus. He submitted this had not been done and that this was a precondition to the matter being determined by the Tribunal.
Consideration
14. The decision of the SSAT that it did not have jurisdiction to decide this matter was based upon its findings that the applicant had not lodged a claim for the SFRS bonus and that no formal decision in writing had been made by the respondent to reject any such claim. The advisory opinion that it gave was that, even if a proper claim had been made by the applicant for the SFRS bonus, it would not have been payable to her because she had received the age pension and the disability support pension.
15. I am satisfied that no claim was made to the respondent by the applicant for the SFRS bonus. However, I am also satisfied that the applicant was required to lodge an income tax return for the 1999/2000 financial year, that she did so lodge a return and that she met the requirements of being an ATO client rather than a Family and Community Services customer as those terms are used in the NTS Act. Therefore, I am satisfied that the ATO was the appropriate Commonwealth instrumentality to receive her claim. Although the claim form or a copy of it was not in evidence before the Tribunal, I am satisfied from the terms of the ATO letter, dated 10 November 2000 (Exhibit 2), that such a claim was made to the ATO and that it was answered by the officer who completed that letter. There, the applicant’s claim for the SFRS bonus was rejected because she was in receipt of income support from 1 April 2000 until 30 June 2000. That rejection decision was able to be reviewed and the applicant was advised of this and was also advised that an objection had to be lodged with the Commissioner of Taxation within 13 weeks. In relation to the review process, section 49 of the NTS Act reads:
“49 ATO client may initiate review under the Taxation Administration Act
(1) If an ATO client is dissatisfied with:
(a) a determination of the Commissioner under section 43 or 44; or
(b) a decision of the Commissioner under section 47 or 48 to vary a determination of the Commissioner under section 43;
the client may object against it in the manner set out in Part IVC of the Taxation Administration Act 1953.
(2) However, the client must lodge an objection with the Commissioner no later than 13 weeks after notice of the determination or of the variation was given to the client.
(3) Subsection (2) has effect despite anything in Part IVC of the Taxation Administration Act 1953.”
16. I am satisfied that the applicant did not lodge, at any time, an objection to the rejection of her claim for the SFRS bonus with the Commissioner of Taxation. Part IVC of the Taxation Administration Act 1953 makes provision for review of decisions by the Tribunal but, as a preliminary step, a mandatory internal review process must be completed in the ATO and the absence of an objection by the applicant means that this has not been carried out in this matter. Accordingly, there can be no review by the Tribunal of the initial decision by the ATO to reject the applicant’s claim for the SFRS bonus.
17. Because the applicant was an ATO client rather than a Family and Community Services customer as those terms are used in the NTS Act, the only claim that she could make was to the ATO. Indeed, as the SSAT found, there is no evidence that any formal claim was made to the respondent. I accept as correct the submission of Mr Howard that the SSAT made no decision in respect of the applicant’s entitlement to receive income support payments from the respondent and that, therefore, these are not matters which are able to be dealt with by the Tribunal. In that regard, section 179 of the Administration Act reads:
“179 Review of decisions by AAT
(1) If:
(a) a decision has been reviewed by the SSAT; and
(b) the decision has been affirmed, varied or set aside by the SSAT;
application may be made to the AAT for review of the decision of the SSAT.
(2) For the purposes of subsection (1), the decision made by the SSAT is taken to be:
(a) where the SSAT affirms a decision—that decision as affirmed; and
(b) where the SSAT varies a decision—that decision as varied; and
(c)where the SSAT sets a decision aside and substitutes a new decision—the new decision; and
(d) where the SSAT sets a decision aside and sends the matter back to the Secretary for reconsideration in accordance with any directions or recommendations of the SSAT—the directions or recommendations of the SSAT.
(3) Subsection (1) has effect subject to section 29 of the Administrative Appeals Tribunal Act 1975.
(4) If:
(a) the AAT sets aside a decision of the SSAT; and
(b) the Secretary is satisfied that an event that did not occur would have occurred if the decision had not been made;
the Secretary may, if satisfied that it is reasonable to do so, direct that the event is to be taken, for the purposes of the social security law, to have occurred.”
18. To the extent that the applicant sought to challenge the respondent’s decision to pay her disability support pension and/or age pension in 2000, this is not a matter which is properly before the Tribunal because it was not the subject of decision by the SSAT.
Decision
19. The application is dismissed on the basis that the Tribunal does not have jurisdiction in the matter.
I certify that the 19 preceding paragraphs are a true copy of the reasons for the decision herein of Mr RG Kenny, Member
Signed: Denise Burton
Administrative AssistantDate/s of Hearing 7 April 2004 (Toowoomba)
Date of Decision 15 April 2004 (Brisbane)The Applicant appeared in person
For the Respondent Mr J Howard, Departmental Advocate
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