Iorio and Secretary, Department of Family and Community Services

[2003] AATA 266

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 266

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2002/1115

GENERAL ADMINISTRATIVE DIVISION

Re:         ANTONIO IORIO

Applicant

And:       SECRETARY TO THE
  DEPARTMENT OF FAMILY AND

COMMUNITY SERVICES

Respondent

DECISION

Tribunal:       G.D. Friedman, Member

Date:             21 March 2003

Place:            Melbourne

Decision:The Tribunal affirms the decision under review. 

(sgd) G.D. Friedman
  Member

SOCIAL SECURITY - family tax benefit - overpayment - debt to Commonwealth - amount paid for student exchange program as direct child maintenance  

A New Tax System (Family Assistance) Act 1999 s3

A New Tax System (Family Assistance (Administration)) Act 1999   ss71(2), 95, 97, 101

Re Secretary, Department of Social Security and Rosendorf (1990) 20 ALD 270

REASONS FOR DECISION

21 March 2003  G.D. Friedman, Member

1. This is an application by Antonio Iorio (the applicant) for review of a decision of the Social Security Appeals Tribunal (the SSAT) dated 17 July 2002.  The SSAT affirmed a decision of a Centrelink delegate of the Secretary to the Department of Family and Community Services (the respondent) to raise and recover a debt of $1785.65, being an overpayment of family tax benefit for the period 1 July 2000 to 23 February 2001. 

2. At the hearing of this matter on 27 February 2003 the applicant represented himself and Ms E. King, a Centrelink advocate, represented the respondent.

3. The Tribunal received into evidence the documents lodged under s37 of the Administrative Appeals Tribunal Act 1975 (T1-T12), together with five exhibits (Exhibits A1-A5) tendered by the applicant.   

BACKGROUND

1. From 1 July 2000 the applicant was receiving family tax benefit (which replaced family allowance) in respect of his daughter Emmeline.  Emmeline was born on 24 February 1985 and was due to turn sixteen years old on 24 February 2001; after which family tax benefit would cease and Emmeline would qualify for youth allowance.  In December 2000 Emmeline was accepted into a student exchange program through the International Exchange Fund (IEF) involving a twelve months’ stay in Italy in 2001.  In an agreement signed by the applicant and his former wife (the mother) on 13 December 2000 (the agreement) the applicant and the mother agreed to share the cost of the trip.  The agreement provided that the mother would pay for travel, school expenses and other expenses to the value of $7,200.00 and the applicant would provide money to the value of $ (to be advised). The agreement also included a statement that the parents

   have agreed that the payment made to International Education Forum Australia Ltd. for the sum of $7,200 will count as child support while our daughter is studying overseas in Italy from January 30^th to December 2001. 

2. A copy of the agreement with the amount of $6350.00 inserted for the applicant’s contribution was signed by the parents and forwarded to the Child Support Agency.  On 14 December 2000 a non-agency payment of $7200.00 was credited to the mother’s Child Support Agency account following her payment directly to IEF for the cost of the program.  On 23 January 2001 the Child Support Agency sent a letter to the applicant confirming that $7200.00 had been credited to the mother’s account.

3. On 25 January 2002 Centrelink informed the applicant that he had been paid $2785.65 in family tax benefit in excess of his entitlement during the period 1 July 2000 to 23 February 2001, based on the amount of child maintenance received.  Centrelink waived $1000.00, leaving a debt of $1785.65.  On 9 May 2002 a Centrelink authorised review officer affirmed the decision that the debt should be recovered.  Following the decision of the SSAT, the applicant applied to the Tribunal on 17 October 2002 for review of the decision.

EVIDENCE

1. The applicant gave oral evidence that on 25 January 2001 he had written to the Child Support Agency objecting to its decision to credit the mother’s account with $7200.00, as this did not take into consideration his contribution of $6350.00.  He said that his contribution should also be credited against future liabilities.  He told the Tribunal that Emmeline and the mother pressured him late at night into signing the agreement the day before the deadline for payment, and he maintained that he was unaware of the details of the program.  He disagreed strongly that the $7200.00 was for travel, school expenses and other expenses, and stated that the mother’s contribution covered only air fares and supervision of Emmeline during the program. It was therefore not for Emmeline’s own maintenance as specified in the legislation, because it was not provided for her personal maintenance. 

2. The applicant stated that he was misled about the nature of the program, and discovered after Emmeline’s departure for Italy that there was no school component, and that Emmeline proposed to spend the year staying with relatives and travelling in Europe.  He said that for this reason he organised distance education for her, and he incurred the cost of providing books, internet access, telephone and other materials that enabled her to study a Victorian Year 11 course while she was overseas.  The applicant told the Tribunal that he spent about $9000 to $10,000 on providing these facilities, and that Emmeline successfully completed her studies. 

3. In relation to the crediting of the $7200.00 to the mother’s account with the Child Support Agency, the applicant stated that he had numerous telephone conversations with the Child Support Agency and with Centrelink objecting to the decision, and said that neither agency carried out the correct procedures to investigate his objection.  He said that at no time did he receive the mother’s payment, so he should not have incurred a family tax benefit debt as a result.  He stated further that the amount was actually a debt incurred by him because he was required to waive child maintenance from 30 January 2001 to 31 December 2001.  The applicant disputed the calculation of the amount of the family tax benefit paid to him in the relevant period, and claimed that he received no child maintenance for seventeen months.

4. In a document entitled Where Does the Money Go? (Exhibit A5), produced by Student Exchange Australia (through which IEF arranged the program), a breakdown of the cost of the program shows that 25% was for costs incurred in Australia for recruitment and selection of students, 27% was for getting students to and from their destination (including international and domestic travel) and 48% was for the care and support of students in the host country (including recruitment of local coordinators and professional support staff, arrival orientations, development of resource material and facilitation of school enrolments).

CONSIDERATION OF THE ISSUES

1. Section 3 of A New Tax System (Family Assistance) Act 1999 (the Act) provides:

   maintenance income, in relation to an individual, means:

   (a)child maintenance—that is, the amount of a payment or the value of a benefit that is received by the individual for the maintenance of an FTB child of the individual and is received from:

   (i)a parent of the child; or

   (ii)the partner or former partner of a parent of the child; or

   (b)partner maintenance—that is, the amount of a payment or the value of a benefit that is received by the individual for the individual’s own maintenance and is received from the individual’s partner or former partner; or

   (c)direct child maintenance—that is, the amount of a payment or the value of a benefit that is received by an FTB child of the individual for the child’s own maintenance and is received from:

   (i)a parent of the child; or

   (ii)the partner or former partner of a parent of the child;

   but does not include disability expenses maintenance.

2. Ms King drew the Tribunal’s attention to Re Secretary, Department of Social Security and Rosendorf (1990) 20 ALD 270 in which the Tribunal stated:

   10. One has to distinguish a benefit from an advantage…

   11. The Macquarie Dictionary defines the word "benefit" to mean "anything that is for the good of a person or thing". It is in this sense that the word is used in the Social Security Act.

She submitted that the mother’s payment of $7200.00 falls within the definition of direct child maintenance under s3(c) because Emmeline received the value of the benefit of the payment by the mother to IEF for the program. Ms King said that the Tribunal should use the ordinary meaning of own to refer to a particular benefit for Emmeline’s maintenance and for no other child’s maintenance.

1. Ms King also submitted that the decision to credit the mother’s Child Support Agency account with a non-agency payment of $7200.00 was correct because both parents had signed the agreement, which specified that the payment was to count for child support.  She stated that the calculation of family tax benefit by Centrelink was correct and took into account all relevant factors.

2. The Tribunal reached its decision taking into account the oral and documentary material and submissions made by the parties. 

3. The Tribunal accepts the applicant’s evidence that Emmeline and the mother exerted pressure on him to sign the agreement shortly before the deadline for payment.   However, as the custodial parent, the applicant should have been aware of details of the proposed trip and should have discussed the issues with Emmeline and sought information on the educational and other components of the program before committing himself to the expenditure and before consenting to Emmeline’s participation.  The applicant signed the agreement in its original form and again with the amount of his contribution inserted, so he had ample opportunity to read the document carefully and to revoke his consent if he was unhappy with the program.  The agreement signed by the applicant and the mother states clearly that the mother’s payment to IEF is to be counted as child support during the program.

4. The Tribunal notes the applicant’s evidence that he was forced to arrange distance education for Emmeline and he incurred considerable costs that he did not anticipate when he signed the agreement.  However, the Tribunal accepts that Emmeline completed the program and received professional support and supervision throughout her stay in Italy as indicated in the document Where Does the Money Go? Therefore, the Tribunal is satisfied that the statement in the agreement that the mother was to pay for Emmeline’s travel, school expenses and other expenses to the value of $7,200 was correct, even if the applicant also contributed a considerable sum towards her education and other expenses.  The Concise Oxford Dictionary (Seventh edition) defines own as …in full ownership, proper, peculiar, individual, and not another’s..   The Tribunal finds that Emmeline received the value of the benefit of the payment by the mother of $7200.00, and accepts the submission by Ms King that this benefit was received for Emmeline’s own maintenance and for no other person’s, from a parent.  Therefore, the Tribunal finds that the payment falls within paragraph (c) of the definition of maintenance income received by the applicant, and must be taken into account in the calculation of family tax benefit.

5. In determining whether the applicant incurred a debt the Tribunal is satisfied that Centrelink took into account the correct factors, including the amount of rent assistance, when calculating family tax benefit payable to him based on the amount of child maintenance received during the period 1 July 2000 to 23 February 2001.  The Tribunal finds that in 2001/2002 the applicant received $4603.97 in family tax benefit, and his entitlement was $2788.60 per year, (or $1818.32 for the period from 1July 2000 to 23 February 2001).  Therefore, he received $2785.65 in family tax benefit in excess of his entitlement; of which $1000 should be waived under the Family Assistance Estimate (Transition) Determination 2001..  The Tribunal finds that under s71(2) of the Act the applicant incurred a debt of $1785.65 to the Commonwealth.

6. Under s95 of A New Tax System (Family Assistance (Administration)) Act 1999 (the FAA Act) the Secretary may decide to write off the debt in certain circumstances.  The Tribunal is satisfied that it is cost effective to recover the debt and that the applicant has the capacity to repay the debt, so there are no grounds to write off the debt.  Section 97 of the FAA Act provides for waiver of a debt arising from administrative error made by the Commonwealth.  The Tribunal finds that there was no administrative error by Centrelink.  Section 101 of the FAA Act provides for waiver of recovery of a debt where there are special circumstances (other than financial hardship alone).  In this case the Tribunal finds that the applicant’s circumstances do not constitute special circumstances (other than financial circumstances alone), and waiver of the debt in whole or in part under s101 of the FAA Act is not appropriate. 

7. For these reasons, the Tribunal decides that the sum of $1785.65 in family tax benefit paid to the applicant during the period 1 July 2000 to 23 February 2001 is a debt recoverable by the Commonwealth.  

DECISION

1. The Tribunal affirms the decision under review.

I certify that the twenty [20] preceding paragraphs are a true copy of the reasons for the decision of:

G.D. Friedman, Member

(sgd)       Catherine Thomas

Clerk

Date of hearing:  27 February 2003

Date of decision:  21 March 2003
Advocate for applicant:                Self-represented
Advocate for respondent:            Ms E. King, Centrelink