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

[2020] AATA 24

Kabir and Secretary, Department of Social Services (Social services second review) [2020] AATA 24 (13 January 2020)

Division:GENERAL DIVISION

File Number:          2018/5822

Re:Humayun Kabir

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Member P Ranson

Date:13 January 2020

Place:Brisbane

The decision under review is affirmed.

................................[Sgd]......................................

Member P Ranson

CATCHWORDS

SOCIAL SECURITY - debt - family tax benefit - schoolkids bonus - percentage of care of children – overnight care - whether the applicant was entitled to receive the family tax benefit – whether the applicant had overnight care of the children - whether the applicant was entitled to receive the schoolkids bonus - whether the applicant has a debt owing to the Commonwealth - whether the recovery of the debt can be written off or waived - decision under review affirmed

LEGISLATION

A New Tax System (Family Assistance) Act 1999 (Cth)

A New Tax System (Family Assistance) (Administration) Act 1999 (Cth)

REASONS FOR DECISION

Member P Ranson

13 January 2020

BACKGROUND

1. Mr Humayan Kabir (the Applicant) has incurred a substantial debt in excess of $21,000 due to Centrelink as a result of overpayment of family tax benefit and schoolkids bonus during the financial years 1 July 2015 to 30 June 2016 and 1 July 2016 to 30 June 2017. The debt has arisen because the Applicant continued to receive those benefits even though care of his children had passed exclusively to his former partner (the Mother) and he failed to notify Centrelink of that change.

2. The Applicant appears to be of the mistaken belief that paying for the day-to-day needs of his children, including their education needs, amounts to the care of those children being with him. Despite numerous attempts to correct this misconception as to the correct basis of determining care, that is, the number of nights the children slept in his house, the Tribunal is concerned this distinction remains unclear to the Applicant.

3. In a separate, but related decision, this Tribunal found that a Care Period was established from 27 May 2016 to 13 March 2017 and during that Care Period the Mother had 100% care of the children. That is, the Applicant had no overnight care of the children and so was not entitled to certain Social Security benefits such as Family Tax Benefit and Schoolkids Bonus.

4. Despite many letters being written to the Applicant by Centrelink[1] since the children passed exclusively into the care of the Mother, the Applicant remained, and continues to remain, of the view that he does not have a debt due to Centrelink as the care of the children remains with him. This is despite the Applicant entering into a payment arrangement with Centrelink in respect of the debt[2].

   [1]     Exhibit 1, T Documents, T13.

   [2]     Exhibit 2, Department’s Statement of Facts, Issues and Contentions, dated 15 May 2019, attachment A.

5. Centrelink has the discretion to either write off the debt or to waive it in certain circumstances however none of those circumstances apply to the case of the Applicant.

6. For these reasons, the debts due to Centrelink are correct and must be repaid.

   FACTS

7. A Hearing was held on 10 September 2019 and the Applicant appeared in person and gave affirmed evidence. The Secretary, Department of Social Services (the Respondent) was represented at the Hearing.

8. The following documents were admitted into evidence at the Hearing:

Exhibit 1	Section 37 T-Documents.
Exhibit 2	Respondent’s Statement of Facts, Issues and Contentions dated 15 May 2019 with one attachment.
Exhibit 3	Respondent’s Statement of Issues dated 13 November 2018.

1. The relevant legislation for this decision, which is set out in comprehensive detail in the Respondent’s Statement of Facts, Issues and Contentions dated 15 May 2019 (the SFIC), is:

   (a)A New Tax System (Family Assistance) Act 1999 (Cth) (the Act); and

   (b)A New Tax System (Family Assistance) (Administration) Act 1999

   (Cth)

   
   

   (the Administration Act).

2. The Applicant has applied to this Tribunal to review decisions by the Social Services and Child Support Division of this Tribunal dated 29 August 2018 (AAT1) which affirmed decisions by the Department of Human Services dated 22 June 2017 to raise and recover debts totalling $21,306.32 in respect of Family Tax Benefit (FTB) and Schoolkids Bonus (SKB) (collectively, the Debt) as follows:

   ·FTB of $1,371.55 for the period 1 July 2015 to 30 June 2016;

   ·SKB of $1,284 for the bonus test day of 30 June 2016; and

   ·FTB of $18,650.77 the period 1 July 2016 to 19 June 2017.

3. The Applicant and his partner separated in 2014 and their four children remained in the care of the Applicant until 27 May 2016 by which time the oldest three left the Father’s care at his residence and entered the Mother’s care at her residence.

4. In a separate and related application to this Tribunal, it has been further confirmed the eldest three children left the Father’s care and entered the Mother’s care on 27 May 2016. At that time, the Mother entered into a tenancy agreement for a four bedroom residence in Browns Plains. The tenancy agreement was in her name alone and follows a previous tenancy agreement for the same property, which was in the name of her sister and herself. This Tribunal has concluded from copies of tenancy agreements provided, the Mother was validly the lessee of the Browns Plains property from at least December 2015 until 30 June 2019 and therefore able to provide suitable accommodation for her and the three eldest children.

5. In the related decision a Care Period was established for the period 27 May 2016 to 13 March 2017 (the Care Period). The Applicant failed to notify Centrelink of the change care and during this period continued to receive FTB and SKB to which he was not entitled. The Applicant stated many times in his evidence at the Hearing for this matter, and the related matter, he provided care for the children in the form of food, clothing and schooling needs throughout this period. The Tribunal went to great lengths to explain to the Applicant care for the purposes of Social Security benefits is totally dependent on which parent, if any, has overnight care of the children (emphasis added), that is, how many nights during the year do the children stay with each of their parents. It is not clear to the Tribunal whether the Applicant fully appreciates the distinction, which may be the reason the Applicant failed to notify Centrelink of the change of care.

6. Attachment A of the SFIC provides evidence on 20 December 2018, the Applicant entered into a payment arrangement in respect of the Debts to pay $20 per month from

   
   

   27 December 2018. Despite his protestations at the Hearing, this clearly indicates the Applicant was aware he had incurred a debt to Centrelink, whether he agreed with it or not.

   DEBT OPTIONS

7. The Administration Act offers various options for the recovery of the debt:

   (a)A debt can be written off, meaning delayed recovery, for a period if the debt is considered irrecoverable at law; or the debtor has no capacity to repay the debt; or the debtor’s whereabouts are unknown; or it is not cost-effective for the Commonwealth to take action to recover the debt[3].

   (b)The Secretary must waive the right to recover the proportion of the debt that is attributable solely to an administrative error made by the Commonwealth if the relevant subsections apply to that proportion of the debt[4].

   (c)There is a possibility of waiving all or part of a debt on the grounds of special circumstances such as the debt not arising knowingly or there are special circumstances, excluding financial hardship, and otherwise it is appropriate to write off the debt in whole or in part[5].

   [3]    Section 95 of the Administration Act.

   [4]    Section 97 of the Administration Act.

   [5]    Section 101 of the Administration Act.

8. There is no evidence before the Tribunal to suggest that the debt is irrecoverable at law; the Applicant has no capacity to repay it; or that it would not be cost-effective the Commonwealth to take action to recover. The whereabouts of the Applicant are well-known, and given the Applicant entered into a re-payment plan for the Debt, this suggests capacity to repay the Debt.

9. The origin of the Debt is the failure by the Applicant to realise the permanent relocation of the children to live with their Mother, despite his contention that they remained in his care five nights a week, amounted to a change in care as they were no longer in his care overnight (emphasis added). As such he should have notified Centrelink of the change of care and every letter sent to him by Centrelink during the care period makes mention of that. As it is his responsibility to notify Centrelink of the change of care there has been no administrative error by Centrelink.

10. The Applicant is of modest means with a taxable income for the 2018 financial year of $26,210[6]. His evidence is he has a credit card debt of approximately $33,000 and lives in shared rental accommodation. Financial hardship alone does not give rise to special circumstances for the purpose of section 101 of the Administration Act. The Applicant has already entered into a payment arrangement of $20 per month, which has been agreed to by Centrelink, and notwithstanding his modest means that amount is unlikely to cause him financial hardship.

    [6]    Personal income tax return of the Applicant for the year ended 30 June 2018.

    DECISION

11. The decision under review is affirmed.

I certify that the preceding 19 (nineteen) paragraphs are a true copy of the reasons for the decision herein of Member P Ranson

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Associate

Dated: 13 January 2020

Date of hearing:

10 September 2019

Date final submissions received:

1 October 2019

Applicant:

In person, self-represented

Solicitor for the Respondent:

Ms L Palmer

Department of Human Services