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

[2018] AATA 2717

Johnson and Secretary, Department of Social Services (Social services second review) [2018] AATA 2717 (9 August 2018)

Division:GENERAL DIVISION

File Number:           2017/3064

Re:Belinda Johnson

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Bill Stefaniak AM RFD, Senior Member

Date:9 August 2018

Place:Sydney

The decision under review is affirmed.

...............[sgd].........................................................

Bill Stefaniak AM RFD, Senior Member

CATCHWORDS

SOCIAL SECURITY – family tax benefit – late lodgement of tax returns – whether special circumstances prevented lodgement of tax returns on time – health issues – lack of knowledge of change of time limits – decision affirmed

LEGISLATION

A New Tax System (Family Assistance) (Administration) Act 1999 s 14A

CASES

Burgess and Secretary, Department of Social Services [2017] AATA 525

Monteith and Secretary, Department of Social Services [2016] AATA 118
Nicholson and Secretary, Department of Social Services [2016] AATA 630
Scott and Anor 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 Field [2015] AATA 903

Secretary, Department of Social Services and Smith [2017] AATA 699

REASONS FOR DECISION

Bill Stefaniak AM RFD, Senior Member

9 August 2018

BACKGROUND

1. On 14 July 2016 the applicant and her husband signed a Claim for an annual lump sum payment of Family Tax Benefit (FTB) and lodged it with the respondent department on 20 July. The applicant had been in receipt of FTB for her three children since the birth of her first child in 2003 and had always lodged her forms on time.

2. The applicant and her husband also indicated that they had yet to lodge their income tax returns for the 2014/15 financial year but would do so.

3. On 21 July 2016 the department rejected the application for FTB on the grounds that it did not receive the claim by 30 June 2016.

4. On 13 February 2014, the department had notified the applicant in writing[1] that the law had changed and that “you now have one year instead of two years to: submit a lump sum claim [for FTB]”. That notice appears to have been sent to the correct address of the applicant.

   [1] T-Documents, T4 at p21.

5. The applicant told the Tribunal that she cannot recall ever receiving the above notice. She said she may have, but had no recollection of it. She said she may have been in hospital at the time. The Tribunal accepts her evidence on this point.

   THE LAW

6. Sections 14A(3) and 14A(3A) of the A New Tax System (Family Assistance) (Administration) Act 1999 provide that a claim for FTB can be accepted after the end of the following year (in this case after 30 June 2016) if special circumstances existed that prevented the lodgement of both the claimant’s and their partners tax returns.

7. It is a two pronged test. Firstly, the circumstances must be special, and secondly those circumstances must have then prevented the lodgement of both the claimant’s and his/her partner’s tax returns. It is a deliberately hard test.

   THE FACTS

8. The respondent relied in part on the applicant telling the Authorised Review Officer (ARO)[2] that she was aware there might have been a change in the law in relation to time limits for lodgement but did not know when this happened.

   [2] T-Documents, T19 at p103.

9. The applicant expanded on this in her sworn evidence before the Tribunal and said she was just being nice to the ARO as she did not wish to appear to be blaming Centrelink for her plight. In fact she had not been aware of any law change until she received notification of the 21 July 2016 decision of the department to knock back her claim.

10. As indicated in paragraph 5 above, I accept that she had no knowledge until after 21 July 2016 that the law had changed. Indeed, the applicant struck me as a truthful, decent, gentle person who had struggled with illness, having to raise three young children with apparently little if any assistance from her husband and who had and continues to battle with illness. I found her to be a lady in the old fashion meaning of that word.

11. I accept her evidence, which I note was not seriously challenged on any other issue.

12. The applicant suffered severe health problems necessitating several chemotherapy treatments and operations. Her weight at one stage dropped from 51 kg to 38 kg and did not return to 51 kg until April 2015.

13. She received R-CHOP on 18 November 2013, 9 December 2013, 30 December 2013 and 17 January 2014 and she began rituximab maintenance on 6 May 2014. This continued every second month for twelve doses with the last dose being administered on 11 January 2016 (see Dr Cartwright’s report dated 9 March 2017).[3]

    [3] Exhibit A1.

14. The respondent further accepted that the applicant underwent testing on 28 April and 5 June 2016.

15. Finally, on 5 July 2016 the applicant underwent investigation (surgery) of a thyroid nodule found on the imaging conducted to monitor her lymphoma which was found to be benign.

16. The Secretary contended that there was no evidence of the applicant having ongoing medical treatment as such from mid-January 2016 until 30 June 2016. A medical certificate from Dr Jenny Smiley dated 7 December 2015, whilst certifying that the applicant was having ongoing chemotherapy and had associated fatigue and malaise, stated that she was fit to attend work “7 hours per week as at present 4 hours on Tuesday and 3 hours on Thursday – non consequitive (sic) days are advisable”. The doctor suggested a three monthly review.

17. The applicant herself told the Tribunal she now works part time for the council on alternate days and finds that she can cope this way.

18. The applicant also told the Tribunal that although her ailments had improved, it was a struggle to get to work and her diagnosis was not good. She said “I can’t get rid of it” and “Dr Cartwright has told me the average survival rate is five to eight years and that there is a 71% survival rate for patients who survive for five years”.

19. The applicant’s problems were further compounded by her husband who she married in 2001. He made her responsible for looking after the house and paying all the household expenses and was of little or no assistance during her period of ill health from 2013 to date. He would go off on fishing trips and leave her with the children and he had to be reminded regularly to get his financial affairs in order so that the applicant could file the tax returns. She had to pick a good time to chase him up on this and the problem was compounded to an extent because a lot of his income was commission-based.

20. The applicant indicated that she stayed in a bad relationship because of her children.

21. The applicant told the Tribunal that despite the problems with getting her husband to get his documents ready so as to enable lodgement, she had always managed to lodge the returns on time in the past.

22. She also stated in evidence that if she had been told earlier about the law changes and been aware of it “I would have lodged it [the FTB claim] in time”. This was despite all her other problems.

    DOES THE APPLICANT SATISFY THE CRITERIA?

23. Let me say at the outset that I have significant sympathy for the applicant who has gone through a terrible period of ill health which may ultimately prove terminal in the next five to eight years. One can only hope with new medical advances in cancer and other treatments that a cure can be found soon which will reverse this sad diagnosis.

24. If I had a broader discretion and the law were different I would grant the applicant’s request and maybe order her husband to reimburse the respondent department so the Australian taxpayer is not out of pocket, but I am bound by the law as it is.

25. Sadly for the applicant the case law is largely against her. The cases of Nicholson and Secretary, Department of Social Services,[4] Burgess and Secretary, Department of Social Services,[5] Secretary, Department of Social Services and Smith,[6] Secretary, Department of Social Services and Field,[7] Scott and Anor v Secretary, Department of Social Security,[8] and Secretary, Department of Social Services and Cannon[9] provide discussion on ill health, difficult family situations and ignorance of changes in the law as not being sufficient to be classed as special circumstances.

    [4] [2016] AATA 630.

    [5] [2017] AATA 525.

    [6] [2017] AATA 699.

    [7] [2015] AATA 903.

    [8] [2000] FCA 1241.

    [9] [2015] AATA 1028.

26. The Tribunal accepts the respondent’s view that Monteith and Secretary, Department of Social Services[10] can be distinguished because of departmental error.

    [10] [2016] AATA 118.

27. The fact that the applicant’s doctor has diagnosed that she has only five to eight years to live may be significant in my view. I could not find anything approaching a similar situation in the case law, nor could counsel for the applicant or the respondent.

28. I note that this situation may not have had any real impact on her ability or otherwise to lodge her FTB claim on time, but it is out of the ordinary. Most cases just deal with the illness being an occurrence that may in itself prevent the lodgement of the FTB without the additional complication of the claimant having hanging over their head that they only have a few years left to live, and young children to worry about.

29. The depressing prognosis in this case is in my view such that it takes the applicant’s situation out of the normal more run of the mill type of cases and make it special. Accordingly I find this prognosis to be a special circumstance.

30. If I am wrong in this, it is still not the end of the matter as the special circumstances have to prevent the applicant from lodging the form on time.

31. The applicant was clear that it was ignorance of the change in the law that was the real reason for her not lodging her FTB claim on time.

32. Despite her considerable health issues, the fact her husband was also part of the problem and not part of the solution and was of no assistance to her, and the fact she had to run a household of three young children largely by herself, she still felt that had she known of the law changes she would have been able to lodge her FTB claim in time. In other words, it was not her special circumstances that prevented her from doing so.

33. It was, unfortunately, her lack of knowledge of the law change that caused her not to lodge the claim on time. The cases, especially Nicholson, Field, Scott and Cannon, are clear that lack of awareness of the law or changes to the law cannot amount to special circumstances.

34. In a number of cases where the claimant was not aware of law changes and if it were not for the lack of action by a third party or parties, the claim may well have gone in on time regardless of the law change, the claimant may well have a potential recourse against that third party.

35. In this case, the Tribunal recalls some brief discussion about whether the applicant and her husband’s relationship was ending. The Tribunal accepts that if it was not, there is probably little to be gained from taking this point further, but if the relationship was coming to an end, the applicant should talk to her solicitor about whether this loss of income due to the late lodgement is something that could be included in any property and/or maintenance settlement.

36. It does seem to this Tribunal that it could well be said that if the applicant’s husband had been more helpful then the FTB claim could well have gone in on time. It may be worth looking at this further, depending on her current matrimonial situation.

    DECISION

37. Unfortunately, for the reasons given above, this Tribunal will have to affirm the decision of the AAT1 but I take this final opportunity to thank the applicant for her candour and the strength she has shown during this troublesome time. It can only be hoped that some new treatment or medicine can be found that will enable her doctor’s gloomy prediction to be turned on its head and at any rate I am personally aware of many people who are still alive today when their prognosis had them dying ten years ago.

38. The Tribunal thanks the parties for their presentations and submissions in this matter.

39. The decision under review will be affirmed.

I certify that the preceding 39 (thirty-nine) paragraphs are a true copy of the reasons for the decision herein of Bill Stefaniak AM RFD, Senior Member

...............[sgd].........................................................

Associate

Dated: 9 August 2018

Date of hearing:	3 April 2018
Date final submissions received:	12 April 2018
Solicitors for the Applicant:	Mr I Turton, Illawarra Legal Centre
Solicitors for the Respondent:	Ms S Mahony, Department of Human Services