Keen and Secretary, Department of Family and Community Services
[2004] AATA 312
•18 March 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 312
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2003/2018
GENERAL ADMINISTRATIVE DIVISION ) Re
Wayne Keen
Applicant
And
Secretary, Department of Family and Community Services
Respondent
DECISION
Tribunal Mr RP Handley, Deputy President Date18 March 2004
PlaceSydney
Decision For the reasons given orally at the hearing, the Tribunal sets aside the decision under review and remits the matter to the Respondent with a direction that Mr Keen owes a debt to the Commonwealth in respect of an overpayment of Parenting Payment (Single) from 24 October 2002 to 4 November 2002 and of Family Tax Benefit from 24 October 2002 to 11 November 2002.
..............................................
RP Handley
Deputy President
CATCHWORDS
SOCIAL SECURITY – overpayment of parenting payment – overpayment of family tax benefit – examination of the relationship between the child and his parents – examination of the residence and contact arrangements for the child – special circumstances – whether the Applicant was qualified for family tax benefit and parenting payment (single) – temporary absences from claimant’s care – examination of when it would have been reasonable for the Applicant to assume that the child was no longer in his care – held Applicant was entitled to payments for two weeks from the date the child went his mother – no special circumstances – decision under review set aside and remitted to the Respondent with a direction that a debt is due to the Commonwealth for parenting payment (single) and family tax benefit from 24 October 2002, two weeks after the child left the Applicant’s care.
Social Security Act 1991 ss5(2), 500D, 500D(2), 1223(1), 1236, 1237AAD
A New Tax System (Family Assistance) Act 1999 s 21, 22, 23, 23(1),
A New Tax System (Family Assistance) (Administration) Act 1999 ss 71(1), 71(2), 94, 95, 101
Beadle v Director-General of Social Security (1985) 60 ALR 225
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Re Beadle and Director-General of Social Security (1984) 6 ALD 1REASONS FOR DECISION
18 March 2004 Mr RP Handley, Deputy President Summary
1. The Applicant, Wayne Keen, was in receipt of parenting payment (single) and family tax benefit in respect of his son, Elliott, who resided with him. Elliott left Mr Keen’s care to spend the school holidays with his mother, Ms Ross. Mr Keen believed at the time that Elliott would be returning five days later. However, Elliott remained in his mother’s care. Mr Keen did not inform the Respondent, the Department of Family and Community Services, that Elliott was no longer in his care and continued to receive parenting payments during the period 9 October 2002 to 4 November 2002 and family tax benefit during the period 9 October 2002 to 11 November 2002. The Respondent sought to recover the resulting overpayment from Mr Keen. This is the decision to be reviewed by the Tribunal.
Background
2. Mr Keen was born on 1 February 1959 and is aged 45. He has been receiving newstart allowance since 5 November 2002. Mr Keen has three children from a relationship with Wendy Joyce Ross: Jeremy, born 13 September 1987, now aged 16; Elliott, born 25 September 1989, now aged 14; and Carah, born 12 May 1993, now aged 11. Mr Keen and Ms Ross have never lived together except for a short period in approximately 1995 or 1996. There are no formal family law arrangements in place between Mr Keen and Ms Ross with respect to residence and contact for the children. The three children have all lived with either Ms Ross and Mr Keen at various times and with Ms Ross’ mother at other times: Jeremy is presently residing with his mother; Carah has resided with her grandmother, Ms Ross’ mother, for approximately seven or eight years because of conflict between her and her brothers. Mr Keen does not pay child support for Jeremy or Carah. However, he has been paying $10 per fortnight child support for Elliott since October 2002 when Elliott went to live with Ms Ross.
3. Since May 1997, Mr Keen and Ms Ross had had an informal mutual arrangement whereby Elliott resided with Mr Keen. On 9 October 2002, Elliott went with Ms Ross and her partner to spend the remainder of the October school holidays with her at her home at Bowraville. Mr Keen was expecting Elliott to be returned on 13 October 2002 in time to resume school on 14 October 2002. Elliott did not return at the end of the school holidays and Mr Keen was not able to contact Ms Ross to find out when Elliott would be returning.
4. On 21 October 2002, Centrelink forwarded a notice to Mr Keen advising him of his parenting payment (single) and family tax benefit payment in respect of Elliott. The letter also informed Mr Keen of his responsibility to inform Centrelink of any change in circumstances, including if the child for whom he was being paid benefits stopped living with him or could no longer be considered his dependent (T5 p28). Mr Keen did not inform Centrelink that Elliott was no longer in his care.
5. On 30 October 2002, Ms Ross informed the Nambucca Heads office of Centrelink that Elliott had been living in her care since 9 October 2002 and requesting that the Centrelink records be amended to reflect this (T6 p31). On 6 November 2002, Centrelink cancelled Mr Keen’s entitlement to parenting payment (single), back-dated to 9 October 2002 (T9 p32). On the same day, Ms Ross lodged an application for family tax benefit in respect of Elliott (T7 p32).
6. On 13 November 2002, Centrelink wrote to Mr Keen requesting that he complete a questionnaire as to the children currently living with him, the full name and address of the person with whom Elliott was living and whether there was a registered parenting agreement or order in respect of Elliott. Mr Keen was also informed that unless he provided the information within 14 days, his family tax benefit might be cancelled (T10 p35). Mr Keen did not respond to this letter.
7. On 20 November 2002, Mr Keen telephoned Centrelink to inquire as to why his parenting payments had ceased. Mr Keen was informed that because Elliott was no longer in his care, he was not eligible for parenting payment (single) or family tax benefit (T11 p37). On 29 November 2002, Centrelink approved Ms Ross’s claim for family tax benefits for Elliott back-dated to 9 October 2002 (T9 p34).
8. On 13 February 2003, Centrelink wrote to Mr Keen informing him that as Elliott had left his control on 9 October 2002, he had received an overpayment of parenting payment (single) from 9 October 2002 to 4 November 2002 in the sum of $839.31 and an overpayment of family tax benefit from 9 October 2002 to 11 November 2002 in the sum of $776.38, and that Centrelink was therefore seeking recovery of the total overpayment of $1,615.69 from him (T17 p51 and T18 p52). On 3 March 2003, Mr Keen requested a review of this decision.
9. On 5 March 2003, the original decision-maker affirmed the decision (T19 and T20) on the basis that Mr Keen only advised Centrelink Elliott was not in his care when the parenting payment (single) and family tax benefit had not been paid in his bank account. On 16 May 2003, Mr Keen requested a review by an authorised review officer (T p57) who, on 18 June 2003, affirmed the decision, stating that as Mr Keen had failed to notify Centrelink that Elliott was no longer in his care, Centrelink was legally entitled to recover the debt raised against him (T22 p58). On 20 June 2003, Mr Keen lodged an application for a review of the decision by the Social Security Appeals Tribunal (“SSAT”) (T29 p74).
10. On 29 August 2003, the SSAT affirmed the decision in relation to the family tax debt owing to Centrelink and set aside the decision relating to the parenting payment (single) debt. It decided that the parenting payment (single) debt should be waived for the period 9 October 2002 to 23 October 2002 because of the special circumstances of the case, thus leaving a debt for recovery for the period 24 October 2002 to 4 November 2002 in the sum of $373.02, making the total debt owing by Mr Keen $1,149.40. On 13 October 2003, Mr Keen lodged an application for a review of this decision with the Brisbane registry of the Administrative Appeals Tribunal.
11. At the hearing of this matter heard in Coffs Harbour, Mr Keen was self-represented and the Respondent was represented by Andrew Zhang, a Centrelink Advocate. The evidence before the Tribunal comprised the documents produced pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (“the T Documents”) together with the evidence presented by the parties at the hearing. Mr Keen gave oral evidence in person. Prior to the hearing of this matter, Ms Ross was invited by the Tribunal to advise whether, as an interested party, she might like to apply to be joined to the application. However, she declined.
Applicable Legislation
12. The primary legislation is the Social Security Act 1991 (“the 1991 Act”). Section 5 of the Act provides that a young person who has not turned 16 is a “dependent child” of another person (“an adult”) if the adult is legally responsible for the day-to-day care, welfare and development of the young person (s 5(2)).
13. The qualifications for receipt of parenting payments are set out in s 500, as follows:
500(1) A person is qualified for parenting payment if:
(a) the person has at least one PP child (see sections 500D to 500H); and
(b) the person is an Australian resident; and
(c) the person satisfies any requirement to enter into a participation agreement that applies to the person under Division 2; and
(d) at least one of the following conditions is satisfied:
(i) the person is not a member of a couple and the person was not a lone parent at the start of the person's current period as an Australian resident (see subsections (2) and (3));
(ii) the person has, at any time, been in Australia for a period of, or periods adding up to, at least 104 weeks during a continuous period throughout which the person was an Australian resident;
(iii) the person has a qualifying residence exemption for parenting payment.
500(2)For the purposes of subparagraph (1)(d)(i), a person's current period as an Australian resident is a period that satisfies both the following conditions:
(a) the person has been an Australian resident for the entire period;
(b) the person lodged the claim for parenting payment during the period.
500(3) For the purposes of subparagraph (1)(d)(i), a person was a lone parent on a particular day if, on that day:
(a) the person was not a member of a couple; and
(b) the person had a dependent child.
14. A “parenting payment” child is defined in s 500D as follows:
500D(1) A PP child of a person is a child who:
(a) is a dependent child of the person; and
(b) has not turned 16.
500D(2) For the purpose of determining whether a child is a PP child of a person, the child is taken to remain in the person's care if:
(a) at the start of a period not exceeding 8 weeks, the child leaves the person's care; and
(b) throughout the period, the child is the PP child of another person; and
(c) the child returns, or the Secretary is satisfied that the child will return, to the first person's care at the end of the period.
500D(3)Subsection (2) does not, by implication, affect the determination of whether a child is in the care of a person in cases to which the subsection does not apply (for example, if the period exceeds 8 weeks).
15. Section 1223(1) provides that if a social security payment was made and the person to whom the benefit was paid was not entitled to that benefit, then the amount of the payment is a debt due to the Commonwealth.
16. Section 1236(1) provides that the debt may be written off, including if the debtor has no capacity to repay the debt (s 1236(1A)).
17. Section 1237AAD provides:
The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a) the debt did not result wholly or partly from the debtor or another person knowingly:
(i) making a false statement or a false representation; or
(ii) failing or omitting to comply with a provision of this Act or the 1947 Act; and
(b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c) it is more appropriate to waive than to write off the debt or part of the debt.
18. Sections 21, 22 and 23 of the A New Tax System (Family Assistance) Act 1999 (“the FA Act”) provides for the payment of family tax benefit as follows:
When an individual is eligible for family tax benefit in normal circumstances
21(1) An individual is eligible for family tax benefit if:
(a) the individual has at least 1 FTB child (see section 22 and later provisions); and
(b) the individual is an Australian resident; and
(c) the individual's rate of family tax benefit, worked out under Division 1 of Part 4, is greater than nil.
(2) However, the individual is not eligible for family tax benefit if another provision of this Subdivision so provides.
22(1) An individual is an FTB child of another individual (the adult) in any of the cases set out in this section.
Individual aged under 18
(2) The individual is an FTB child of the adult if:
(a) the individual is aged under 18; and
(b) the adult is legally responsible (whether alone or jointly with someone else) for the day-to-day care, welfare and development of the individual; and
(c) the individual is in the adult's care; and
(d) the individual is an Australian resident or is living with the adult.
Effect of FTB child ceasing to be in individual's care without consent
23(1) This section applies if:
(a) an individual is an FTB child of another individual (the adult) under subsection 22(2) or (3); and
(b) an event occurs in relation to the child without the adult's consent that prevents the child being in the adult's care; and
(c) the adult takes reasonable steps to have the child again in the adult's care.
When the child remains an FTB child of the adult
(2) The child is an FTB child of the adult for that part of the qualifying period (see subsection (5)) for which the child would have been an FTB child of the adult under subsection 22(2) or (3) if the child had not ceased to be in the adult's care.
When the child is an FTB child of another individual
(3) If the child would have been an FTB child of any other individual under subsection 22(2) or (3) during any part of the qualifying period if the event had not occurred, the child is an FTB child of the other individual.
(4) Except as provided in subsection (2) or (3), the child cannot (in spite of section 22) be an FTB child of any individual during the qualifying period.
Definition of qualifying period
(5) In this section:
qualifying period means the period beginning when the child ceases to be in the adult's care and ending at the earliest of the following times:
(a) if the child again comes into the adult's care at a later time—that later time;
(b) after 14 weeks pass since the child ceased to be in the adult's care;
(c) if:
(i) the adult is a parent of the child; and
(ii) no family law order or registered parenting plan is in force in relation to the child; and
(iii) the child comes into the care of the other parent at a later time;
that later time.
19. Section 71(1) of the A New Tax System (Family Assistance) (Administration)) Act 1999 (“the FAA Act”) provides that an amount paid to a person by way of family tax benefit when that person was not entitled to the assistance becomes a debt due to the Commonwealth by that person. Section 95(1) provides that the debt may be written off if any of the provisions in s 95(2) apply:
(2) The Secretary may decide to write off a debt under subsection (1) if, and only if:
(a) the debt is irrecoverable at law; or
(b) the debtor has no capacity to repay the debt; or
(c) the debtor's whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d) the debt cannot be recovered by deductions under this Act or the Social Security Act 1991 and it is not cost effective for the Commonwealth to take action to recover the debt.
20. Section 101 of the FAA Act provides the circumstances under which the debt may be waived:
Waiver in special circumstances
The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a) the debt did not result wholly or partly from the debtor or another person knowingly:
(i) making a false statement or a false representation; or
(ii) failing or omitting to comply with a provision of the family assistance law; and
(b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c) it is more appropriate to waive than to write off the debt or part of the debt.
Mr Keen’s Evidence
21. Mr Keen said his relationship with Ms Ross started about 17 years ago. Their three children have lived at various times with Ms Ross’ mother, with Ms Ross and with Mr Keen. For example, in 1995, all three children were living with Mr Keen. Then, Carah went to live with her grandmother and Jeremy went back and forth between Ms Ross and Mr Keen, ultimately deciding to live with Ms Ross. Elliott remained living with Mr Keen and, by 2002, the two of them had been living together for about five years.
22. As was not unusual, Ms Ross arrived at Mr Keen’s place on 9 October 2002 in her boyfriend’s car and said she would take Elliott home with her for the last week of the school holidays. Mr Keen assumed, as had happened before, that Ms Ross would return Elliott the following Sunday or Monday before school resumed on the Tuesday of that week. Elliott took a few clothes and other things with him in a bag and went with his mother.
23. When Ms Ross did not return Elliott the following Sunday, Mr Keen assumed either that Ms Ross’ car had broken down or that she had decided to keep Elliott with her for a few days longer. Mr Keen does not have a car. He has a mobile phone on which he can receive incoming calls but not make outgoing calls. Mr Keen did not have Ms Ross’ address and Ms Ross did not have a phone so there was no easy way for Mr Keen to contact her. He assumed that Ms Ross would let him know what was happening.
24. When Ms Ross did not contact Mr Keen, he phoned her mother who lives at Sawtell, a few kilometres south of Coffs Harbour. She told Mr Keen that Ms Ross had dropped both Carah and Elliott off with her on the previous weekend. Elliott had spent the first week of the school term staying with her. Ms Ross had then collected Elliott and took him home with her again. Ms Ross’ mother said she did not know what was going on.
25. Mr Keen therefore phoned Ms Ross’ boyfriend at the garage where he worked and asked him what was going on. He said he would speak to Ms Ross. Ms Ross did not, however, phone Mr Keen. Mr Keen said he phoned the boyfriend at work on two further occasions and asked that Ms Ross should phone back. She did not do so.
26. Mr Keen did not remember receiving a Centrelink letter dated 21 October 2002, which included a notice that he should notify Centrelink of any change of circumstances. Mr Keen said he did not regard his circumstances as having changed at this stage. He still regarded Elliott as being in his care and control. Mr Keen did recall receiving a questionnaire from Centrelink dated 13 November 2002. He said he put it aside, still regarding Elliott as being in his care and control.
27. Mr Keen first realised his parenting payment (single) and family tax benefit had been cancelled on about 20 November 2002 when he found the payments had not been made into his bank account. It was then he contacted Centrelink.
28. Mr Keen said on other occasions when the children have moved out of his care, he has always willingly provided a letter confirming this so that Ms Ross could claim the appropriate entitlements. Neither she nor Centrelink asked for such a letter on this occasion.
29. Mr Keen does not currently have any of the children living with him although they come and stay from time to time. For example, Elliott stayed with him for four weeks over the past school holidays. Mr Keen is receiving newstart allowance and looking for work. He is about to do a Roads and Traffic Authority course. He receives $385 newstart allowance gross per fortnight. From this is deducted Housing Commission rent of $91.20, child support for Elliott of $10, withholdings of $10, $35 in respect of electricity, and $55 in respect of his rented television and stereo. He receives $180.80 net a fortnight after these deductions. Mr Keen has no other major expenses. He pays $80 to $100 per fortnight for food, $20 for tobacco and $30 to $40 for entertainment.
Application of the Law and Findings
21. The first issue for the Tribunal to determine is whether Mr Keen was qualified for family tax benefit and parenting payment (single) after Elliott went to stay with Ms Ross on 9 October 2002. Secondly, if he was not so qualified for the whole or part of that period, the Tribunal must determine whether he received an overpayment and if so whether that overpayment is a debt due to the Commonwealth. The third issue for the Tribunal is whether any debt should be recovered and, in particular, whether, pursuant to s 1237AAD of the 1991 Act and s 101 of the FAA Act there are special circumstances which justify the exercise of the Secretary’s discretion to waive the whole or part of the debt.
22. Having heard Mr Keen’s evidence, the Tribunal finds that because of previous arrangements between Mr Keen and Ms Ross with regard to the care of the children, Mr Keen did not worry immediately when Ms Ross did not return Elliott to Mr Keen to enable him to resume school on 14 October 2002. In addition, because he did not know Ms Ross’ address and because she did not have a phone, he was unable to contact her directly to ask whether she was going to return Elliott to his care. After about a week when he had heard nothing, he telephoned Ms Ross’ mother to ask if she had heard from Ms Ross. She told him that Ms Ross had left Carah and Elliott with her the previous weekend but, after a week, Ms Ross had collected Elliott and taken him home with her. This is the week Elliott should have been back at school.
23. Mr Keen subsequently phoned Ms Ross’ boyfriend at the garage where he worked and asked him to get Ms Ross to phone Mr Keen. Despite two further calls, Ms Ross did not do so.
24. In the Tribunal’s opinion, the important issue is at what time it was reasonable for a person in Mr Keen’s position to realise that Ms Ross was intending to keep Elliott with her so that Elliott was no longer in Mr Keen’s care and control. Moreover, at what stage should he have notified Centrelink of his change of circumstances? These issues are important in determining at what date Mr Keen’s qualification for parenting payment (single) and family tax benefit ceased. The legislative regime for both payments permits temporary absences from the claimant’s care. The question is at what date Elliott’s absence was no longer temporary. It is at this date that Mr Keen’s qualification for the two payments ceased.
25. The Tribunal accepts Mr Keen’s evidence that for the period immediately after 9 October 2002, he considered Elliott to be still in his care. Given previous arrangements between Mr Keen and Ms Ross, this was reasonable in the circumstances. However, when Ms Ross did not respond to the message Mr Keen gave to her boyfriend asking that Ms Ross phone Mr Keen, it would have been reasonable for Mr Keen to assume that Ms Ross was intending that Elliott should remain with her. In the Tribunal’s opinion, Mr Keen’s call to the grandmother would have taken place about Monday 21 October; Mr Keen’s phone call to the boyfriend a day or two later. By the end of Wednesday 23 October, it would have been reasonable for him to assume that Ms Ross would not be returning Elliott to him, and that Elliott was no longer in his care.
26. Thus the Tribunal finds that from 24 October 2002, Mr Keen was no longer responsible for Elliott’s day to day care and Elliott was therefore no longer Mr Keen’s dependent child for the purposes of s 5 of the 1991 Act. Mr Keen ceased to be qualified for parenting payment (single) for Elliott from that date.
27. In the same way, because Elliott ceased to be in Mr Keen’s day to day care, pursuant to s 22(2)(b) and (c) of the FA Act, Elliott ceased to be his family tax benefit child and Mr Keen ceased to be qualified for family tax benefit from 24 October 2002.
28. As a result, Mr Keen received an overpayment of both payments from 24 October 2002. Pursuant to s 1223(1) of the 1991 Act and s 71(1) of the Family Assistance (Administration) Act 1995, these overpayments constitute debts due to the Commonwealth.
29. Both Acts make provision for the recovery of debts to be written off or waived in certain limited circumstances. Write off – the suspension of recovery of a debt – is not appropriate in these circumstances. A debt may be waived pursuant to s 1237AAD of the 1991 Act and s 101 of the FAA Act where the debt did not result from the debtor or another person making a false statement or representation or failing or omitting to comply with a provision of the Act, where there are special circumstances (other than financial hardship alone) that make it desirable to waive, and it is more appropriate to waive rather than to write off the debt or part of the debt.
30. Although the Act provides no guidance as to the meaning of “special circumstances”, this has been the subject of statutory interpretation by the Federal Court and the Tribunal. The leading case is probably Beadle v Director-General of Social Security (1985) 60 ALR 225, a decision of the Full Federal Court. In Beadle (supra), the Court did not think it possible to lay down precise limits or precise rules. It would depend on the circumstances of the particular case as to whether they constituted special circumstances. Moreover, even though the phrase “special circumstances” lacks precision, it “is sufficiently understood in our view not to require judicial gloss” (at 228).
31. In that case, the Court affirmed the decision of the Tribunal under review in that case, Re Beadle and Director-General of Social Security (1984) 6 ALD 1, in which the Tribunal, whilst acknowledging that the phrase “special circumstances” is “incapable of precise and exhaustive definition”, said, nevertheless, that the circumstances “must have a particular quality of unusualness that permits them to be described as special” (at 3).
32. In Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545, Kiefel J, after referring to the Federal Court’s decision in Beadle (supra 1985), observed that special circumstances:
would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case… it would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.
33. Mr Keen lives in straitened circumstances on newstart allowance. However, he is coping financially and has no major debts. In the Tribunal’s view, there are no special circumstances which would make it appropriate to waive the whole or part of the debt, which may, therefore, continue to be recovered by withholdings from his newstart allowance payments.
34. The Tribunal therefore sets aside the decision under review and remits the matter to the Respondent with a direction that Mr Keen owes a debt to the Commonwealth in respect of an overpayment of parenting payment (single) from 24 October 2002 to 4 November 2002 and of family tax benefit from 24 October 2002 to 11 November 2002.
I certify that the 34 preceding paragraphs are a true copy of the reasons for the Oral decision herein of Mr RP Handley, Deputy President
Signed: .....................................................................................
AssociateDate/s of Hearing 18 March 2004
Date of Oral Decision 18 March 2004
Representative for the Applicant Self represented
Representative for the Respondent Andrew Zhang, Advocate
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