Isakidis and Secretary, Department of Family and Community Services

[2004] AATA 1050

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 1050

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2004/705

GENERAL ADMINISTRATIVE DIVISION

Re:         DORA ISAKIDIS

Applicant

And:SECRETARY,

DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal:       G.D. Friedman, Member

Date:             4 October 2004

Place:            Melbourne

Decision:For reasons given orally at the hearing, the Tribunal affirms the decision under review.

(sgd) G.D. Friedman
  Member

SOCIAL SECURITY - family tax benefit - overpayment - debt to Commonwealth - waiver of debt - write-off of debt 

A New Tax System (Family Assistance) Act 1999 s 58, Schedules 1, 3

A New Tax System (Family Assistance)(Administration) Act 1999   ss 16, 20, 31A, 71(2), 95,

97, 101, 102, 105, 107

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

REASONS FOR DECISION

4 October 2004  G.D. Friedman, Member

1.      This is an application by Dora Isakidis (the applicant) for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 7 May 2004.  The SSAT affirmed a decision of an authorised review officer of Centrelink dated 4 March 2004 to raise and recover a debt of $1362.70 arising from an overpayment of family tax benefit from 1 July 2002 to 30 June 2003. 

2.      At the hearing on 4 October 2004 the applicant represented herself, and Mr W. Zita, a Centrelink advocate, represented the Secretary to the Department of Family and Community Services (the respondent).

3. The Tribunal received into evidence the documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (T1‑T26), and one exhibit (Exhibit R1) lodged by the respondent.

BACKGROUND

4.      In the 2001/2002 financial year the applicant had been receiving family tax benefit in respect of her three children.  On 22 May 2002 the applicant provided a new estimate of her ($3000) and her husband’s ($42,000) combined income to Centrelink.  On 22 May 2002 and 17 June 2002 Centrelink sent letters to the applicant advising her of the amount of family tax benefit she would receive and the benefit was paid to her from 1 July 2002 to 1 July 2003.

5.      On 1 August 2002 the applicant visited Centrelink at Oakleigh to amend her and her husband’s estimated combined income to $48,000 for 2002/2003.  On 1 August 2002 Centrelink sent a letter to the applicant advising her that the amount of family tax benefit was based on the revised estimate of combined income, and payments were adjusted from this date.  Similar notices were sent to the applicant on 3 March 2003 and 3 July 2003.

6.      The actual combined income for the applicant and her husband in the 2002/2003 financial year was $69,003, including $25,065 for her earnings.  On 9 December 2003, a data match by Centrelink showed that the applicant had received $1362.70 in excess of her entitlements in family tax benefit from 1 July 2002 to 30 June 2003.  An amount of $345.53 was recovered directly from the applicant’s tax refund, and a Centrelink officer decided to raise and recover the remainder as a debt.  On 4 March 2004, an authorised review officer affirmed the decision.

7.      On 23 September 2003 the applicant sought review of the decision by the SSAT.  On 7 May 2004 the SSAT affirmed the decision.  The applicant lodged an application with the Tribunal on 17 June 2004 for review of the SSAT decision.

8.      The issue before the Tribunal is whether the applicant has a debt to the Commonwealth, and if so, whether the debt should be waived or written off. 

EVIDENCE

9.      Centrelink records show that the applicant contacted the Oakleigh office on 1 August 2002 and that there was discussion of her and her husband’s combined income for the 2002/2003 financial year, including a note that the applicant had decided that the estimate of combined income of $48,000 should remain, even though she indicated that her husband was ill. 

10.     In oral evidence the applicant said she did not dispute the amount of the overpayment.  She stated that her husband had suffered a heart attack in April 2002 and she was uncertain about his earnings for the 2002/2003 financial year, as he took time off work.  She told the Tribunal that there was a delay in receiving WorkCover payments, so she had approached Centrelink for possible assistance.  The applicant stated that because of the uncertainty she obtained part-time employment in May 2002, and this was the basis of her estimate of $6000 for her earnings and $42,000 for her husband.

11.     The applicant emphasised that on 1 August 2002 she visited Centrelink and asked that family tax benefit be cancelled because of the uncertainty and her desire to avoid an overpayment.  She said that she assumed her request would be carried out, and was adamant that the Centrelink record of the visit was incorrect.  She said that she had made a follow-up telephone call to Centrelink about one week later and the call-centre officer assured her that the payments would be cancelled.  She did not know why Centrelink had no record of the conversation, and she said that she should have asked for the officer’s name.

12.     The applicant told the Tribunal that she does not recall receiving letters sent by Centrelink in August 2002 and March 2003, as the family was under considerable stress as a result of her husband’s illness.  She said that the family tax benefit was paid into a passbook account operated by her husband, and agreed that he informed her after 1 August 2002 that payments were still being credited to the account, despite her request to Centrelink that payments be cancelled.  She did not give a reason for failing to notify Centrelink of the continuing payments, and said that she had done all she could to ensure the cancellation.  The applicant stated that she was notified in September 2003 that there was an overpayment.

13.     The applicant explained that she and her husband are currently working irregular hours and that their combined taxable income is about the same as in the 2002/2003 financial year ($65,000).  Nevertheless she said that the family is suffering financial difficulty because of ongoing medical costs and everyday living expenses for the three children, of whom one is working on a casual basis, a second is undertaking an apprenticeship and the third is in Year 9 at school.  She said that mortgage repayments are about $75 per week. 

CONSIDERATION OF THE ISSUES

14.     Section 105 of the A New Tax System (Family Assistance)(Administration) Act 1999 (the FA Admin Act) provides that a re-assessment of family tax benefit may be made on the basis of a person’s actual adjusted taxable income. Section 71(2) of the FA Admin Act provides that an overpayment of family tax benefit may be raised as a debt to the Commonwealth and calculated under s 58 and Schedules 1 and 3 of the A New Tax System (Family Assistance) Act 1999 (the FA Act), and s 16, s 20, s 31A, s 102, s 105 and s 107 of the FA Admin Act.

15.     The applicant submitted that she should not have to re-pay the overpayment because Centrelink’s actions in failing to carry out her request to cancel family tax benefit were wholly responsible for the debt.  The applicant reiterated that she acted in good faith at all times.  Mr Zita submitted that there was no administrative error by Centrelink, and even if there was some error, there were no grounds to write off or waive the debt because payments were not received in good faith by the applicant, and there were no special circumstances to waive the debt.  

16.     In reaching its decision the Tribunal takes into account the oral and written evidence and submissions made at the hearing. 

17.     There was no dispute that in the relevant period the applicant received payments in family tax benefit in excess of her entitlement, and the Tribunal finds that the amount of $1362.70 is a debt to the Commonwealth.  

18.     Under s 95 of the FA Admin 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.  Therefore, there are no grounds to write off the debt.

19.     Section 97 of the FA Admin Act provides for waiver of a debt or a proportion of a debt that is attributable solely to an administrative error made by the Commonwealth, and the overpayment that makes up the debt is received in good faith and the person would suffer severe financial hardship if the debt were not waived.  The Tribunal accepts that the applicant is clear in her own mind that on 1 August 2002 she requested Centrelink to cancel her family tax benefit.  However, on balancing her recollection with the documentary evidence, such as Centrelink’s records of conversations, receipt summary screens and customer record Access Monitor reports, the Tribunal is not reasonably satisfied that her recollection is accurate.  Nor is there any corroborative evidence that she contacted Centrelink a week later to confirm that action had been taken to implement the cancellation request.

20.     The Tribunal notes that the applicant received letters from Centrelink in August 2002 and March 2003 about the continuing family tax benefit.  The Tribunal accepts that the family was experiencing health and other difficulties at that time, but the contents of the letters should have made the applicant aware that payments had not been cancelled.  The Tribunal notes that the applicant’s husband made her aware of the continuing payments after 1 August 2002, but she did not notify Centrelink.  For these reasons, on balance the Tribunal finds that the debt was not attributable solely to administrative error made by the Commonwealth, and the waiver provision in s 97 does not apply.

21.     Section 101 of the FA Admin Act provides for waiver of recovery of a debt where there are special circumstances (other than financial hardship alone).  In Re Beadle and Director-General of Social Security (1984) 6 ALD 1 the Tribunal held that special circumstances must be unusual, uncommon or exceptional.  The Tribunal takes into account the applicant’s personal and family circumstances including her husband’s health problems, their financial situation and the requirements of providing for three children.  The Tribunal notes that the applicant and her husband are employed and earn a combined income of $65,000 per annum, and two of the children are making a financial contribution to their upkeep.  Overall, the Tribunal finds that the applicant’s circumstances are not unusual, uncommon or exceptional and therefore do not constitute special circumstances (other than financial hardship alone). 

22.     After considering all relevant matters and viewing the applicant’s case in its entirety, the Tribunal is satisfied that waiver of the debt in whole or in part under s 101 is not appropriate. 

23.     For these reasons, the Tribunal decides that the overpayment of $1362.70 in family tax benefit from1 July 2002 to 30 June 2003 is a debt recoverable by the Commonwealth.

DECISION

24.     For reasons given orally at the hearing, the Tribunal affirms the decision under review.

I certify that the twenty‑four [24] preceding paragraphs are a true copy of the reasons for the decision of:

G.D. Friedman, Member

(sgd)       Catherine Thomas

Clerk

Date of hearing:  4 October 2004

Date of decision:  4 October 2004
Advocate for applicant:                Self‑represented
Advocate for respondent:            Mr W. Zita, Centrelink