Kristoffersen and Secretary, Department of Social Services (Social services second review)
[2021] AATA 1345
•14 May 2021
Kristoffersen and Secretary, Department of Social Services (Social services second review) [2021] AATA 1345 (14 May 2021)
Division:GENERAL DIVISION
File Number:2017/6091
Re:Kurt Kristoffersen
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
DECISION
Tribunal:Member D Mitchell
Date:14 May 2021
Place:Brisbane
The Reviewable Decision in relation to withholding amounts from the Applicant’s FTB Part A Supplement to offset against the Applicant’s FTB Part B debts is affirmed.
.............[SGD]...................................
Member D Mitchell
CATCHWORDS
SOCIAL SECURITY – Family Tax Benefit (FTB) – FTB Part A Supplement – withheld as a matter of offset – whether a FTB Part B debt arose – if so whether it was appropriate to offset the debt by way of reduction to amount to FTB Part A Supplement paid – decision under review affirmed
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth)
A New Tax System (Family Assistance) Act 1999 (Cth)
A New Tax System (Family Assistance) (Administration) Act 1999 (Cth)CASES
Boscolo v Secretary, Dept of Social Security[1999] FCA 106; (1999) 90 FCR 531
Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541
Kazmierczak v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs[2010] FCA 1084
Kristoffersen and Secretary, Department of Social Services (Social Services second review) [2018] AATA 524
Kristoffersen v Secretary, Department of Social Services [2019] FCA 1658
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Ivovic and Director-General of Social Services (1981) 3 ALN N95
Secretary, Department of Social Security v Hales [1998] FCA 219
Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267; [2012] FCA 639
Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190
REASONS FOR DECISION
Member D Mitchell
14 May 2021
INTRODUCTION
On 10 October 2017, Mr Kurt Kristoffersen (the Applicant) made an application to the General Division of this Tribunal seeking review of a decision of the Social Services and Child Support Division (SSCSD) of this Tribunal made on 11 September 2017.[1] The Reviewable Decision related to the Applicant’s rate of payment for Family Tax Benefit Part A (FTB Part A), Family Tax Benefit Part A Supplement (FTB Part A Supplement), Family Tax Benefit Part B (FTB Part B), Family Tax Benefit Part B Supplement (FTB Part B Supplement) and the Schoolkids Bonus for the periods 11 October 2007 to 30 June 2016.[2]
[1] Exhibit 1, T Documents, T1, pages 1-5, Application for Review.
[2] Exhibit 1, T Documents, T2, pages 6-12, Decision of the SSCSD.
On 15 March 2018, this Tribunal, differently constituted, dismissed the Applicant’s application pursuant to section 42B(1)(b) of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act), finding that it lacked any reasonable prospects of success.[3]
[3] Exhibit 1, T Documents, T7, pages 55-65, Decision of Senior Member Tavoularis dismissing the Application for Review: Kristoffersen and Secretary, Department of Social Services (Social Services second review) [2018] AATA 524.
On 21 March 2018, the Applicant filed a Notice of Appeal in the Federal Court of Australia against that decision.
On 10 October 2019, the Federal Court remitted in part the matter to the Tribunal, ordering that:[4]
1. Subject to Order 2, the decision of the Administrative Appeals Tribunal (the “Tribunal”) of 15 March 2018 dismissing the application for review filed on 10 October 2017 is affirmed.
2.The decision of the Tribunal is set aside, in part, pursuant to s 44(4) of the Administrative Appeals Tribunal Act 1975 (Cth) solely on the question of whether the amounts identified at paragraph [138] of the reasons published today, not paid to the applicant as part of the Family Tax Benefit Part A Supplement, for the reasons identified at paragraph [139], or otherwise, were properly withheld as a matter of offset as suggested.
3.The application to the extent described in Order 2 is remitted to the Tribunal to be considered and decided according to law.
…..
[4] Exhibit 1, T Documents, T8, page 69, Orders of Justice Greenwood and reasons for judgement: Kristoffersen v Secretary, Department of Social Services [2019] FCA 1658.
BACKGROUND
The Applicant is married and has a child born in early 2007.[5]
[5] Exhibit 1, T Documents, T8, page 71, Orders of Justice Greenwood and reasons for judgement: Kristoffersen v Secretary, Department of Social Services [2019] FCA 1658 at [4] and Exhibit 5, Applicant’s Submission dated 12 January 2021, page 2, paragraphs 6 and 7.
At all times during the period between 11 October 2007 and 30 June 2016 the Applicant had been in receipt of the disability support pension (DSP) and FTB in relation to his child and his wife had been in receipt of the carers payment. During this period neither the Applicant or his wife received any income or income support payments outside of that provided by the Respondent.[6]
[6] Exhibit 1, T Documents, T8, page 71, Orders of Justice Greenwood and reasons for judgement: Kristoffersen v Secretary, Department of Social Services [2019] FCA 1658 at [4].
The Applicant has sought numerous reviews of decisions of the Respondent in relation to the rate of payment to him of his FTB and other payments and consequently has been involved in Tribunal proceedings with respect to the Respondent on a number of occasions. A relevant summary of the proceedings that led to the Authorised Review Officer (ARO) decision in question in these proceedings is set out by the Federal Court at [9]-[46].[7]
[7] Exhibit 1, T Documents, T8, page 72-78, Orders of Justice Greenwood and reasons for judgement: Kristoffersen v Secretary, Department of Social Services [2019] FCA 1658 at [9]-[46].
On 6 February 2017, the Applicant sought review by the Respondent of the following:[8]
1)The decision to reduce Family Tax Benefit (FTB) part A and not pay at the full or maximum rate since 11/10/07
2)The decision to not pay the FTB part A annual bonuses at the maximum rate since 11/10/07
3)The decision to not pay the school kids bonuses at the full or maximum rate since 11/10/07
4)The decision to reduce FTB part B and not pay at the maximum or full rate since 11/10/07
5)The decision to not pay the FTB part B annual bonuses at the maximum rate since 11/10/07
[8] Exhibit 1, T Documents, T5, page 32, Letter from Applicant to the Respondent seeking internal review of decisions.
On 28 February 2017, an ARO decided that the decision to not pay the Applicant FTB Part A and Supplements, FTB Part B and Supplements and the Schoolkids Bonus at the full or maximum rate since 11 October 2007 was correct.[9] The ARO made the following findings of fact:[10]
·You have been paid the correct rate of FTB part A and Part B since 11 October 2007 up to 28 February 2017.
· Your FTB payments for the current financial year (2016/2017) are based on your income estimates and are currently correct until your actual income or any change in circumstances are assessed.
· You have been paid the correct rate of FTB Part A and Part B Supplements since 11 October 2007 up to 30 June 2016.
· You have been paid the correct rate of Schoolkids Bonus since 11 October 2007 up to 30 June 2016.
[9] Exhibit 1, T Documents, T6, page 33, Decision of the ARO including notes and schedule of payments.
[10] Exhibit 1, T Documents, T6, pages 34-35, Decision of the ARO including notes and schedule of payments.
In providing their reasons for decision the ARO set out the following[11] before considering each financial year within the relevant period:[12]
The rate for FTB instalment customers is worked out using the customer's estimate of ATI [adjusted taxable income] for the financial year and estimated maintenance income. If either members of a couple are on an income support payment they receive FTB Part A free of the income test (with the exception of the maintenance income test). Only single income support customers receive FTB Part B free of the income test. FTB Part B is based on the lower secondary income earner (either member of the couple).
At the end of the financial year a process known as reconciliation occurs in which the payments a person received during the financial year are compared to a person's actual entitlement. A person's income estimates are compared with the income assessed by the Australian Taxation Office, or in your case the department's assessment of your non-taxable income. If the income estimates were too low, the person may incur a debt. If they were high, the person may receive arrears.
As FTB is assessed on financial years I have broken down your FTB payments into financial years and as you have asked your payments to be reviewed from 11 October 2007. I have reviewed your FTB entitlements for each financial year separately.
[11] Exhibit 1, T Documents, T6, page 35, Decision of the ARO including notes and schedule of payments.
[12] Exhibit 1, T Documents, T6, page 35, Decision of the ARO including notes and schedule of payments.
The Applicant sought a first-tier review of that decision by the SSCSD. On 11 September 2017, the SSCSD affirmed the ARO decision.[13]
[13] Exhibit 1, T Documents, T2, pages 6-12, Decision of the SSCSD.
Following this, the Applicant sought a second-tier review of this matter by the General Division of this Tribunal, by way of an application received on 10 October 2017.[14]
[14] Exhibit 1, T Documents, T1, pages 1-5, Application for Review.
On 15 March 2018, this Tribunal, differently constituted, dismissed the Applicant’s application pursuant to section 42B(1)(b) of the Administrative Appeals Tribunal Act 1975 (Cth), finding that it lacked any reasonable prospects of success.[15]
[15] Exhibit 1, T Documents, T7, pages 55-65, Decision of Senior Member Tavoularis dismissing the Application for Review: Kristoffersen and Secretary, Department of Social Services (Social Services second review) [2018] AATA 524.
On 21 March 2018, the Applicant filed a Notice of Appeal in the Federal Court of Australia against that decision.
On 10 October 2019, the Federal Court set aside the Tribunal’s decision in part, solely on the question of whether the amounts identified in paragraph [138] of the reasons, not paid to the Applicant as part of the FTB Part A Supplement, for the reasons set out in paragraph [139], or otherwise, were properly withheld as a matter of offset as suggested. The Federal Court remitted this issue to the Tribunal to be considered and decided according to law.[16]
[16] Exhibit 1, T Documents, T8, page 69, Orders of Justice Greenwood and reasons for judgement: Kristoffersen v Secretary, Department of Social Services [2019] FCA 1658.
Paragraphs [138]-[139] of the Federal Court decision provided:[17]
138. As to payments called the "Part A supplement", the position set out in the ARO's letter of 28 February 2017 can be summarised in this way:
[17] Exhibit 1, T Documents, T8, pages 100-101, Orders of Justice Greenwood and reasons for judgement: Kristoffersen v Secretary, Department of Social Services [2019] FCA 1658 at [138]-[139].
Financial Year
Part A Supplement Maximum Payment
Amount Paid
Difference
2008/2009
$686.20
$175.68
$510.52
2009/2010
$711.75
$649.70
$62.05
2010/2011
$726.35
$536.55
$76.65
2011/2012
$726.35
$636.84
$89.51
2012/2013
$726.35
$627.80
$98.55
2013/2014
$726.35
$609.55
$116.80
2014/2015
$726.35
$598.60
$127.75
2015/2016
$726.35
$589.26
$137.09
139. The reasons for the difference were said by the ARO to be these:
Financial Year
Part A Supplement Maximum Payment
2008/2009
Offsetting a Part B overpayment for the financial year 2008/2009 and an adjustment made offsetting the overpayment on reconciliation.
2009/2010
Offsetting a Part B overpayment for the financial year 2009/2010 and an adjustment made offsetting the overpayment on reconciliation.
2010/2011
Offsetting a Part B overpayment for the financial year 2010/2011 and an adjustment made offsetting the overpayment on reconciliation.
2011/2012
Offsetting a Part B overpayment for the financial year 2011/2012 and an adjustment made offsetting the overpayment on reconciliation.
2012/2013
Offsetting a Part B overpayment for the financial year 2012/2013 and an adjustment made offsetting the overpayment on reconciliation.
2013/2014
Offsetting a Part B overpayment for the financial year 2013/2014 and an adjustment made offsetting the overpayment on reconciliation.
2014/2015
Offsetting a Part B overpayment for the financial year 2014/2015 and an adjustment made offsetting the overpayment on reconciliation.
2015/2016
Offsetting a Part B overpayment for the financial year 2015/2016 and an adjustment made offsetting the overpayment on reconciliation.
The Applicant filed a further appeal with the Federal Court in relation to that decision. On 27 February 2020 that appeal was dismissed.[18]
[18] Exhibit 1, T Documents, T9, page 108, Orders of Justice Reeves.
On 22 April 2021, a Hearing was held in relation to the issue remitted to the Tribunal by the Federal Court. At the Hearing, the Applicant appeared by telephone, was self-represented and gave evidence under affirmation.
On 23 April 2021, the Applicant filed further documents in the form of a cover letter and draft Tribunal decision and reasons for decision seeking that the Tribunal adopt that draft as its decision. The Respondent provided no objection to the lodgement of these documents on the basis that they are accepted as further written submissions of the Applicant. The Respondent advised that it continues to rely on its Statement of Facts, Issues and Contentions dated 14 September 2020 and the submission made at the Hearing.
ISSUES
The jurisdiction of the Tribunal in relation to the application made by the Applicant is limited by the Orders made by the Federal Court. At [162], the Federal Court provided:[19]
Accordingly, the decision of the Tribunal is in large part to be affirmed subject to an order that the matter be remitted to the Tribunal for determination solely on the question of whether the amounts identified at [138] of these reasons not paid to Mr Kristoffersen as part of the Part A supplement were, for the reasons identified at [139], properly withheld as a matter of offset as suggested. All other aspects of the application for review before the Tribunal filed by Mr Kristoffersen on 10 October 2007 before the AAT which were dismissed by the Tribunal in the exercise of the power conferred under s 42B(1)(b) are affirmed.
[Emphasis added]
[19] Exhibit 1, T Documents, T8, pages 106-107, Orders of Justice Greenwood and reasons for judgement: Kristoffersen v Secretary, Department of Social Services [2019] FCA 1658 at [162].
Consequently, in determining whether the amounts of FTB Part A Supplement not paid to the Applicant for the financial years ending 30 June 2009 to 30 June 2016 (the Relevant Period) were properly withheld as a matter of offset, the Tribunal must consider:
(a)was the Applicant over paid an amount of family assistance; and
(b)if so, was any overpaid amount of family assistance a debt to the Commonwealth; and
(c)if so, was the debt recoverable by the Respondent by way of offset against the Applicant’s FTB Part A Supplement?
THE LAW
The relevant law in assessing a person’s entitlement to family assistance payments, including Family Tax Benefit (FTB) is found in the A New Tax System (Family Assistance) Act 1999 (Cth) (FA Act) and the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (FA Administration Act).
Subdivision D of Division 1 of Part 3 of the FA Administration Act deals with FTB reconciliation conditions. Relevantly section 32A of the FA Administration Act provides that where the Secretary makes or varies a determination in relation to the rate of FTB a person is entitled to be paid in respect of a period, FTB Part A and Part B supplements are to be disregarded unless and until the individual has satisfied the FTB reconciliation condition. In relation to the Applicant, the relevant reconciliation conditions are satisfied when the required income tax returns are lodged, or where no income tax return is required to be lodged, the individual notifies the Secretary of the relevant adjusted taxable incomes, or the Secretary is satisfied of the relevant adjusted taxable income amounts without the need for notification.[20]
[20] See sections 32A, 32B, 32J and 32M of the FA Administration Act.
Schedule 3 to the FA Act deals with adjusted taxable income. Clause 1 of Schedule 3 provides that an individual’s adjusted taxable income is relevant to eligibility for, and the rate or amount of, family tax benefit, schoolkids bonus and child care subsidy.
Relevantly, clause 2 of Schedule 3 to the FA Act provides that an individual’s adjusted taxable income for a particular income year includes the individual’s tax free pension or benefit for that year. Clause 7 of Schedule 3 to the FA Act provides that tax free pensions or benefits include amongst other payment types, disability support pension and carer payment.
Relevantly, clause 3 of Schedule 3 to the FA Act provides that if an individual is a member of a couple, the individual’s adjusted taxable income for an income year includes the adjusted taxable income for that year of the individual’s partner. Clause 3(2) of Schedule 3 to the FA Act provides that for the purposes of calculating the rate of FTB Part B an individual is entitled to, where they are a member of a couple, it is the lower of the individual or their partners adjusted taxable income for an income year that will be used as the individuals adjusted taxable income.
Section 71 of the FA Administration Act deals with debts in respect of family assistance other than, CCS, ACCS and family tax benefit advance. Relevantly, section 71(2) provides:
Overpayment
(2) If:
(a) an amount (the received amount) has been paid to a person by way of assistance; and
(b) the received amount is greater than the amount (the correct amount) of assistance that should have been paid to the person under the family assistance law;
the difference between the received amount and the correct amount is a debt due to the Commonwealth by the person.
Section 82 of the FA Administration Act provides ways in which a debt owed by a person is recoverable by the Commonwealth. Relevantly, section 82(1)(b) of the FA Administration Act provides that a debt can be recovered by setting off family assistance to which the person is entitled against the debt.
Section 84A of the FA Administration Act provides that where a debt is recoverable by the Commonwealth by way of setting off family assistance to which the person is entitled against the debt, the Secretary may determine that the whole or a part of the entitlement is to be set off against the debt.
Effectively where an offsetting occurs reducing the debt to zero, there may still be further amounts due payable to the person.
It is generally expected that debts to the Commonwealth are recovered.[21] However, there are circumstances where the recovery of debts is either put on hold for a period of time (written off) or are no longer pursued (waived). Where a person has an FTB debt, the Respondent may write off, or waive, that FTB debt if the requirements set out in sections 95, 97 or 101 of the FA Administration Act are met.
[21] Secretary, Department of Social Security v Hales [1998] FCA 219
Section 95(1) of the FA Administration Act provides the Respondent may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise, but only if subsection (2),(4A) or (4B) applies. Relevantly, section 95(2) of the FA Administration Act allows the Respondent to decide to write off a debt 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)it is not cost effective for the Commonwealth to take action to recover the debt.
Section 95(4) of the FA Administration Act provides that for the purposes of paragraph (2)(b), if a debt is recoverable by means of:
(a) deductions under section 84; or
(aa)deductions under section 1231 of the Social Security Act 1991; or
(b) setting off under section 84A family assistance; or
(c) application of an income tax refund under section 87; or
(d) setting off under section 87A against a payment referred to in paragraph 82(2)(a);
the person is taken to have capacity to repay the debt unless recovery by those means would cause the person severe financial hardship.
Section 97 of the FA Administration Act provides that the Respondent must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received, in good faith, the payment or payments that gave rise to that proportion of the debt and the person would suffer severe financial hardship if it were not waived.
Selway J, in Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190 at paragraph [35] stated:
The ordinary or usual interpretation of the phrase ‘attributable solely to’ is that it refers to the single or sole cause of the relevant act or event. The word ‘attributable’ means ‘capable of being attributed’. It involves an objective assessment of causation. The words ‘a debt attributable solely to an administrative error’ can be paraphrased as meaning that the only cause that objectively can be ascribed to the relevant debt is an administrative error.
Section 101 of the FA Administration Act provides that the Respondent may waive the right to recover all or part of a debt if they are 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.
The FA Administration Act does not provide a definition of special circumstances, however the general proposition established by relevant Federal Court decisions make it clear that special means something different from the usual or ordinary.[22]
[22] Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541, at 545per Kiefel J; Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267; [2012] FCA 639, at [51]; Boscolo v Secretary, Dept of Social Security[1999] FCA 106; (1999) 90 FCR 531, at [18]; Barker J in Kazmierczak v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs[2010] FCA 1084, at [37].
In Re Beadle and Director-General of Social Security (1984) 6 ALD 1 the Tribunal held at paragraph 4:
An expression such as “special circumstances” is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.
In Re Ivovic and Director-General of Social Services (1981) 3 ALN N95, the Tribunal stated:
Whilst it would be unwise, if not impossible, to attempt to lay down any precise delineation of what may amount to “special circumstances” …., the use of the word “special” is, we think, intended to allow the decision-maker the fullest opportunity to consider the particular circumstances of each case … In the exercise of the discretion …., the decision-maker must have regard to whether, by exercising the discretion in a particular case, he will be achieving or frustrating ends or objects which are conformable with the scope and purpose of the …. Act.
CONTENTIONS
Applicant’s contentions
The Applicant provided written submissions dated 12 January 2021 together with an affidavit annexing additional documents upon which he sought to rely.[23]
[23] Exhibit 5, Applicant’s Submission dated 12 January 2021 and Exhibit 6, Affidavit dated 19 December 2020 with attachments KK1-KK22.
In those written submissions, the Applicant submitted that the decision under review is as follows:[24]
[24] Exhibit 5, Applicant’s Submission dated 12 January 2021 at page 1, paragraphs 1-4.
1)In accordance with the 10/10/19 Orders of the Federal court QUD 173 of 2018 Order (2) the tribunal's jurisdiction in this case is to review whether Mr Kristoffersen' s FTB payments "for the reasons identified at paragraph [139], or otherwise were properly withheld." [139] clearly details these reasons as "Offsetting a part B overpayment for the financial years 2007 -2017"
2) The tribunal has been ordered by the federal court to review,
i) The reasons for the reductions in FTB part B and
ii) If the alleged reasons were legal
iii) And if legal, were proper calculations used to create additional reductions to FTB A in the claimed form of "offsets" allegedly created from an undocumented debt to the crown.
3)iv) Or otherwise, being that the reasons for the reductions in FTB A, FTB B, the annual FTB A Supplements and annual FTB B supplements were not legal.
4)The AAT needs to apply the correct methodology and legislation in determining if Mr K has been paid correctly. On 10/10/2019 The Federal court stated at [160] "If the tribunal had misapplied the law in determining the calculation of the benefit ... the tribunal had fallen into error."
5)Clearly the AAT has been asked to determine if the misapplication of section 38M manually calculated, instead of Schedule 1 as applied via the Human Services computer program has resulted in the error producing payment reductions in FTB A, FTB B, the FTB A annual supplement and the FTB B annual supplement.
The Applicant made submissions in relation to the variation of the amounts of DSP, carer payment and FTB that were paid to him and his wife throughout the period in question.[25] Further the Applicant at length contended that the calculation methods used to determine his entitlement to FTB were incorrectly applied.[26]
[25] Exhibit 5, Applicant’s Submission dated 12 January 2021, pages 2-3, paragraphs 8-16.
[26] Exhibit 5, Applicant’s Submission dated 12 January 2021, pages 3-6, paragraphs 18-40.
In relation to any debt being owed to the Commonwealth, the Applicant contended:[27]
13)Notice of decisions: Debts under Family assistance act
Section 224 states "Each time an individuals Family Tax benefit payments are reduced written notice is required, stating the alleged debt and how the alIeged debt occurred. No written notifications were ever sent and Mr K only became aware of the reduced payments when he accessed his bank account. No evidence exists to support any claimed debt to the crown. (Affidavit KK-2 section 224 legislation)
[27] Exhibit 5, Applicant’s Submission dated 12 January 2021, page 3, paragraph 13.
The Applicant contended that section 71(2) of the FA Administration Act is used only when an overpayment has already been paid and established and that in this case the correct amount under the Family Assistance legislation has been underpaid.[28]
[28] Exhibit 5, Applicant’s Submission dated 12 January 2021, page 6, paragraphs 41-42.
The Applicant outlined that it is for the Tribunal to consider:[29]
45) Was there ever a debt owed to the crown by Mr K
46)When was the decision to claim a debt declared and how was the decision constructed.
47)As the reductions in FTB B and FTB A were not consistent, each change required a new notification. Under the legislation, when an alleged debt is declared notice must be in writing and must be sent to the individual who is directly financially disadvantaged, it must detail the amount of the debt and how the alleged debt was established.
48) Without any declaration being sent there is no alleged debt.
……..
[29] Exhibit 5, Applicant’s Submission dated 12 January 2021, page 7, paragraphs 45-48.
The Applicant outlined that he was seeking orders from the Tribunal as follows:[30]
1)The tribunal decision dated 11/9/2017 (to dismiss without hearing) be set aside and the AAT substitute a new decision
2)The AAT affirm that a decision created under section 223 of the FA act is a valid decision.
3)The AAT affirm that, based on, the FA act legislation which is mirrored in the human services guide and is operational through the human services computer program and based in factual evidence, Mr K has at all times been entitled to payment of FTB B, FTB A, FTB B annual supplement, FTB A annual supplement and school kids bonuses (now called return to school Bonus)at the maximum rates.
4)The AAT confirm that no evidence of any alleged debt has been presented as required under section 224 FA act and based on this legislative requirement no debt to the crown has ever existed in the case of Mr Kristoffersen
5)That the AAT act under section 62A of the Administrative Appeals Act (Affidavit KK – 16 False and misleading evidence) and section 3 A of “A New Tax System (Family assistance) (administration) act 1999 and move to criminal proceedings against Mr Bishop for his deliberate and intentional misleading of the tribunal. Noting that “Chapter 2 of the criminal Code applies to all offences against this act.”
[30] Exhibit 5, Applicant’s Submission dated 12 January 2021, page 8.
At Hearing the Applicant’s contentions were consistent with his written submissions dated 12 January 2021.
At the outset of the Hearing the Applicant informed the Tribunal that the Respondent’s representative, Mr Bishop would be required to take an affirmation as he intended to cross examine him. The Applicant said that Mr Bishop had mislead the Tribunal pursuant to section 62A of the Administrative Appeals Act 1975 (Cth) (AAT Act) as he had provided false and misleading evidence and the Tribunal has a responsibility to commence prosecution. The Tribunal explained that Mr Bishop was not giving evidence in this matter and was not called as a witness, rather his role was to represent the Respondent, putting the Respondent’s case forward to the Tribunal. Consequently, the Tribunal advised the Applicant that it was not appropriate for him to cross-examine or direct any questions to Mr Bishop.
At Hearing the Applicant made the following contentions:
·The matter before the Tribunal was limited to how the offset came about which requires the review of the rates of payment for all entitlements.
·The Respondent has provided no evidence of debts having arisen.
·The Respondent has provided no evidence that the computer program is wrong.
·His FTB in relation to his daughter has been cancelled because she has turned 13, this is inconsistent with the Guide.
·He and his wife have at no stage earned income.
·The Respondent was required by the Federal Court to provide further information to him, however, has not done so.
·This is an opportunity for the Tribunal to assess how ATI is applied.
·The information at pages 109-126 of the T-documents are fabricated and do not match the reductions that are shown in the banks statements.
·Prior to the Respondent’s 2020 submissions there was no evidence of debts to the Crown.
·FTB Part A and Part B amounts are fixed set amounts, they do not alter from week to week. The Supplements are fixed and paid at the end of the year. They only change where there is a change in circumstances and there has not been any change in either his or his wife’s circumstances.
·The AAT was misled by the Respondent to believe that DSP and carers payment is income earned. They are not.
·Is the computer program a legal method of calculation or is there an employee that recalculates each fortnight?
·There were payment spikes that made the amounts of his payments change.
·Document KK8 was reproduced on 5 May 2017 and shows that on 21 March 2008 his wife’s taxable income was $12,006. This is fabricated as his wife did not earn any income. This information was fabricated and led to him being incorrectly assessed under Schedule 3.
·With reference to document KK15 section 38L of the FA Administration Act, is a common provision and everything starts with this provision. The Respondent incorrectly says that is not the start of everything. Section 38M only if section 38L does not apply, but in this case of course section 38L applies. This common provision applies to both FTB Part A and Part B.
·The ARO said that single parents are paid the full rate however they are assessed under the same legislation as members of a couple and under the same computer program.
·Reeves J dismissed his appeal against the decision of Greenwood J because he failed to attend a directions hearing in person.
·Greenwood J did not adjudicate on whether the calculations were wrong, he made a decision as to whether the Tribunal could dismiss his application which was based on misleading information from the Respondent’s representative.
·It is false to say that DSP and carers payment are earned taxable income and adjusted taxable income.
·There is no evidence of his wife’s alleged income estimates.
·The annual statements provided are not notices, they advise on what may or may not have happened.
·He has responded every time to letters he has been sent.
·Carer’s payment is not paid to someone that works.
·Under section 223 of the FA Administration Act, valid decisions are made by a computer program.
·Section 224 of the FA Administration Act requires formal notices to be provided before rate of payments are reduced.
·There is no evidence of an overpayment or debt.
·References by the Respondent to reconciliation are misleading as reconciliation only occurs after the ATO has forwarded earned income and mandatory consistent adjustments then occur.
·The Guide at T-document T4, page 31 provides that individuals must consent to a reduction in their payment and there is no evidence of his consent.
·Section 71 of the FA Administration Act only applies once an overpayment has been established, this needs to be documented.
The Tribunal asked the Applicant whether he would like to address the non-recovery of debt provisions, with reference to the exerts at pages 22 to 27 of the T-Documents – T3.[31] The Tribunal acknowledged the Applicant’s submission was that no debt had arisen and that the calculation method applied was incorrect, however asked whether he would like to make any submissions in relation to these provisions should the situation arise where they are relevant. The Applicant was unwilling to engage with the idea of addressing the write-off or waiver due to error or special circumstances provisions as he said he was not prepared to say he had a debt when there was no proof that a debt existed. He said he would not say that he cannot pay the amounts as they have already been taken back.
[31] Exhibit 1, T Documents, T3, pages 22-27, Part 4, Division 4 – Non recovery of debts of the FA Administration Act.
The Applicant said that hardship arose due to there being no legislative basis for the decisions that have been made.
In concluding submissions after having heard the Respondent’s submissions the Applicant contended:
·Greenwood J did not adjudicate on the application of section 38L of the FA Administration Act or if the method was correct, rather he just looked at what the Respondent put forward.
·The Respondent’s representative misleading the Tribunal is an exceptional circumstance that should be taken into account.
·It is a fact that he and his wife do not earn income.
Having reviewed the cover letter and draft Tribunal decision and reasons for decision submissions filed by the Applicant the day after the Hearing, the Tribunal considers that those submissions were consistent with his previous written submissions and oral submissions made at Hearing, and as such no further production of those submissions is required here.
Respondent’s contentions
The Respondent set out their submissions in the Statement of Facts, Issues and Contentions dated 14 September 2020[32] as follows:[33]
[32] Exhibit 2, Respondents Statement of Facts, Issues and Contentions dated 14 September 2020.
[33] Exhibit 2, Respondents Statement of Facts, Issues and Contentions dated 14 September 2020, pages 5-6, paragraphs 21-27.
Submissions
21.The Secretary contends that the rates of FTB to which the Applicant was entitled in respect of the relevant period have been determined and in accordance with the decision of the Federal Court "[n]o basis is identified for calling into question the calculations which have been extensively analysed by the ARO and affirmed by the [AAT1]' (T8, 105). In those circumstances, the Secretary contends that the jurisdiction of this Tribunal does not extend to a reconsideration of the rate calculations as originally found and determined in the ARO decision and have since been affirmed by the AAT1 and this Tribunal.
22. Accordingly, the following findings of the ARO are relevant (T6, 36-40):
a.The Applicant was entitled to payment of the maximum rate of the FTB Part A Supplement in respect of each financial year within the relevant period.
b.The Applicant was overpaid FTB Part B in respect of each financial year within the relevant period.
c.The amount of FTB Part B overpaid to the Applicant was recovered by way of offset against the Applicant's entitlement to the FTB Part A supplement following reconciliation in respect of each financial year.
23.The following table summarises the relevant amounts to which the Applicant was entitled and were subsequently paid (T8, 100-101 ):
Year
FTB Part A Supplement Entitlement
FTB Part A Supplement Paid
Difference
2008/09
$686.20
$175.68
$510.52
2009/10
$711.75
$649.70
$62.05
2010/11
$726.35
$536.55
$76.65
2011/12
$726.35
$636.84
$89.51
2012/13
$726.35
$627.80
$98.55
2013/14
$726.35
$609.55
$116.80
2014/15
$726.35
$598.60
$127.75
2015/16
$726.35
$589.26
$137.09
24.The Secretary submits that the overpaid amounts of FTB Part B in respect of each financial year in the relevant period represent the difference between the amounts the Applicant was entitled to and the amounts he actually received. Accordingly, in accordance with s 71(2) of the Administration Act the amounts overpaid were debts due to the Commonwealth and were recoverable by way of offset pursuant to s 82.
25.The Secretary further submits that having found the Applicant was entitled to the payment of the FTB Part A Supplement for each financial year in the relevant period, it was and remains appropriate that the Applicant's debts to the Commonwealth be recovered by way of offset against that entitlement in accordance with s 84A of the Administration Act.
26.Accordingly, the Secretary submits the amounts of FTB Part A Supplement not paid to the Applicant in respect of the financial years ending 30 June 2009 to 30 June 2016 were properly withheld as a matter of offset. Even if that were not the case, the Secretary submits there is no evidence to support a contention of exceptional and/or unforeseen circumstances creating financial hardship or that any of the other provisions relevant to the non-recovery of a debt apply.
27.Accordingly, the Secretary submits that the decision under review to the extent described in Order 2 of the Orders dated 10 October 2019 be affirmed.
At Hearing, the Respondent’s contentions were consistent with those set out in the Statement of Facts, Issues and Contentions. In addressing the submissions made by the Applicant the Respondent contended:
·The policy document referred to at page 31 of the T-Documents relates to deductions from another person’s payments and as such has no application in the present matter.
·The reference made by the Applicant in paragraph 13 of his submissions regarding section 224 of the FA Administration Act does not accord with the actual wording of the provision.
·It is assumed that the Applicant was referring to the notice requirements in respect of debts outlined by section 77 of the FA Administration Act.
·Section 77 of the FA Administration Act does not apply where the debt has been wholly recovered. In this case where the offset was applied there is no outstanding debt.
·The notices found at Exhibits 3 and 4 set out family assistance entitlements, amount that had already been paid and the outstanding balance for each year during the Relevant Period. Each year the Applicant had an amount that was payable to him. In each year the total amount of the Part A and Part B Supplements was less than the balance payable to the Applicant to account for the offsetting of the overpayment of FTB Part B that occurred during the year. Under important information the following was provided:
oYour Family Tax Benefit includes a Part A and Part B Supplement amount of [$xx]. This is included in your entitlement after the end of the financial year, when your payments are checked. The Supplement amount may be used to reduce Family Assistance overpayments received during the financial year, and repay family assistance overpayments form other years.
·The issue before the Tribunal is limited to considering the offsetting of the FTB Part B debt against the Applicant’s FTB Part A Supplement. The ARO decision was affirmed by the SSCSD. The General Division of the Tribunal dismissed the application to review the decision of the SSCSD on the basis that there were no reasonable prospects of success and the Federal Court affirmed the Tribunal’s decision to dismiss the application in relation to the questions that go to the calculation of entitlement.
·During the Relevant Period, the Applicant was entitled to FTB Part A , FTB Part A Supplement, FTB Part B Supplement and the Schoolkids Bonus at the full rate, however due to his wife’s adjustable taxable income was not entitled to the full rate of FTB Part B.
·Greenwood J went through the FTB calculation processes in his decision at [96] to [105] for FTB Part A and at [106]-[131] for FTB Part B reaching a conclusion and making a finding in relation to the calculation. It was clear that the application of section 38L of the FA Administration Act was not engaged for FTB Part B see [128]. Greenwood J at [130], said, “The Tribunal correctly concluded that clause 38L has no application to the calculation to the Part B rate notwithstanding Mr Kristoffersen’s emphatic contention to the contrary.”
·The Applicant’s FTB Part B payments were the only payments reduced due to the calculation method and the calculations are not a matter before this Tribunal. It is the reduction of the FTB Part A Supplement by way of offset that is the issue before the Tribunal.
·Section 71(2) of the FA Administration Act provides that if the received amount is greater than the correct amount that should have been paid, the difference is a debt owed to the Commonwealth. Section 82 of the FA Administration Act allows a section 71 debt to be offset and section 84A provides a discretion for the debt to be offset against an entitlement.
·In order to refund an offset of a debt amount usually there would need to be exceptional and/or unforeseen circumstances that would lead to financial hardship if the offset was not refunded. The Applicant does not make any submissions in relation to exceptional or unforeseen circumstances that would lead to financial hardship.
·The Federal Court decision is binding on the Tribunal.
·There is no evidence that section 84A of the FA Administration Act should not have been exercised in relation to the offsets in question.
·The Tribunal would need to find that the offset was not appropriately applied which would result in a debt being outstanding which would require recovery, and it is in those circumstances that the waiver and write off provisions could be considered. There is no evidence in relation to severe financial hardship, sole administrative error or special circumstances that would warrant a waiver rather than a write off. The debt has been paid.
CONSIDERATION
The Applicant made assertions that the SSCSD, Senior Member Tavoularis on second review and the Federal Court made decisions that were wrong as they relied upon what he considers to be incorrect and misleading information provided by the Respondent. It appears to this Tribunal that where an interpretation of the law as it applies to family assistance payments and in particular the Applicant’s circumstances differ to those held by the Applicant he considers them to be wrong.
The Applicant is refusing to accept that the decision makers at the Federal Court and Tribunal have undertaken their own consideration of the relevant legislation and its application and that to put it quite simply – the Applicant’s interpretation of the family assistance law and its application has not been accepted. In the reasons for his decision Greenwood J goes to great length to consider the methodology for calculating the Applicant’s entitlements, however the Applicant fails to accept those reasons as having any form of determinative effect on the issues he sought review of. As such although the Applicant initially accepted the limited scope of the issues remitted to this Tribunal for consideration he continued to seek a further reengagement with the calculation of his family assistance during the Relevant Period.
The Applicant fails to appreciate that Greenwood J and each of the Tribunal decision makers to date, and in fact this present Tribunal have undertaken an independent review of the material before them, have formed their own interpretation of the family assistance law and then applied this to the facts before them. To that extent there has been a consensus in relation to the correctness of the methodology used by the ARO in establishing the Applicant’s eligibility for and rate of payment of the FTB Part A, FTB Part B, FTB Part A Supplement, FTB Part B Supplement and the Schoolkids Bonus during the Relevant Period. Although this Tribunal is not tasked to review the rate of these payments or the methodology, on its review of the evidence before it and with the benefit of having read the decisions of Greenwood J, Senior Member Tavoularis and the SSCSD, agrees that in relation to Relevant Period, the Applicant was entitled to the full rate of FTB Part A, FTB Part A Supplement, FTB Part B Supplement and Schoolkids Bonus and that he is entitled to a reduced rate of FTB Part B based on his adjusted taxable income.
Clauses 2 and 3 of Schedule 3 to the FA Act makes it clear that adjusted taxable income includes DSP and carers payment. Further Schedule 1 to the FA Act makes it clear that the income test set out in clauses 38L to 38N only applies to FTB Part A calculations by virtue of Step 2 of Part A rate (Method 1) and Step 2 of Part 3A – Part A rate (Method 3). There is no reference made to the application of the income test found in Part 4 – Part B rate of Schedule 1 to the FA Act allowing for a reduction in the adjusted taxable income when calculating a persons entitlement to FTB Part B. Consequently, clause 38L of Schedule 1 to the FA Act is not relevant for the purposes of calculating entitlement to FTB Part B, nor is it the starting position for all FTB calculations as contended by the Applicant.
By remitting the matter to the Tribunal on the sole question of whether the identified amounts of FTB Part A Supplement not paid to the Applicant were properly withheld as a matter of offsetting a FTB Part B overpayment for the relevant years, the Federal Court affirmed the Tribunal’s decision to dismiss the Applicant’s application as having no reasonable prospects of success, as it related to reviewable decisions[34] regarding:
·The rate of FTB A paid to the Applicant since 11 October 2007 to 30 June 2016.
·The rate of Schoolkids Bonuses paid to the Applicant since 11 October 2007 to 30 June 2016.
·The rate of FTB Part B paid to the Applicant since 11 October 2007 to 30 June 2016.
·The rate of FTB Part B supplements paid to the Applicant since 11 October 2007 to 30 June 2016.
[34] Exhibit 1, T Documents, T8, pages 106-107, Orders of Justice Greenwood and reasons for judgement: Kristoffersen v Secretary, Department of Social Services [2019] FCA 1658 at [162].
This means that the issue in relation to the rate of FTB Part A, FTB Part A Supplements, FTB Part B, FTB Part B Supplements and the Schoolkids Bonuses paid to the Applicant during the periods in question is not before this Tribunal. The decision to dismiss the application in relation to those matters was upheld by the Federal Court and consequently, the decision of the ARO in relation to the relevant calculations stands as having been affirmed by the SSCSD.
The Tribunal notes that this view is supported by Greenwood J, who provided at [157]:[35]
…… No basis is identified for calling into question the calculations which have been extensively analysed by the ARO and affirmed by the SSCSD.
[35] Exhibit 1, T Documents, T8, page 105, Orders of Justice Greenwood and reasons for judgement: Kristoffersen v Secretary, Department of Social Services [2019] FCA 1658 at [157].
Therefore, the way in which the Applicant’s entitlement to FTB Part A, FTB Part A Supplement, FTB Part B, FTB Part B Supplement and the Schoolkids Bonus were calculated and the manner in which the family assistance law was applied to each of those calculations is not a matter to be re-examined by this Tribunal. It is clear on the evidence before the Tribunal that comprehensive reasoning for the methodology was provided by the ARO, subsequently by the SSCSD and this Tribunal, differently constituted, in dismissing the application. The Federal Court upheld that such reasoning and interpretation of the law was correct as follows:[36]
160. ………. First, the applicant says that the Tribunal failed to identify, construe and apply, the correct legislation in reaching its decision. The applicant also says that it was not open to the Tribunal either in the tier I review or in considering whether the tier 2 application ought to be dismissed, to consider the legislation in the way it did and apply it in the way reflected in the reasons as described earlier. The applicant says that these failures demonstrate "actual bias" on the part of the Tribunal. The difficulty for the applicant, of course, is that the Tribunal correctly identified the legislative provisions and correctly applied them. However, even if the Tribunal had failed to identify the correct provisions and had misapplied the law in determining the calculation of the benefit, the result on the material would be that the Tribunal had fallen into error. Nothing in the material demonstrates actual bias on the part of the Tribunal.
[Emphasis added]
[36] Exhibit 1, T Documents, T8, page 106, Orders of Justice Greenwood and reasons for judgement: Kristoffersen v Secretary, Department of Social Services [2019] FCA 1658 at [160]
The Tribunal acknowledges the Applicant’s continuation to question the way in which the relevant entitlements were calculated and the submissions he made in that regard, however there is no benefit in rehashing the decisions that stand in that regard in this decision.
Further, the Tribunal notes that the Applicant has made reference to payment periods outside of the Relevant Period. Any decision in relation to a period outside of the current Relevant Period is outside the present jurisdiction of this Tribunal and will not be discussed in this decision.
In turning to the questions before this Tribunal, firstly for the reasons set out in the preceding paragraphs the calculations of the Applicant’s FTB Part B entitlements in the Relevant Period are accepted as being correct. As such the annual reconciliation identified that the Applicant had been paid more than his entitlement to FTB Part B in the Relevant Periods. Accordingly, pursuant to section 71 of the FA Administration Act the difference between the amount of FTB Part B received by the Applicant and his actual entitlement is a debt due to the Commonwealth.
The Applicant contends that he did not receive formal notification that a debt had arisen and that such notification was required by section 224 of the FA Administration Act, therefore no evidence of a debt has been presented. As such the Applicant contended that section 71(2) of the FA Administration Act only applies when an overpayment has already been paid and established. He says that is not the case here.
Section 224 of the FA Administration Act provides how notice of a decision affecting a person’s eligibility for, or entitlement to be paid, family assistance under the family assistance law is taken to have been given. This provision in effect provides at what point a person is taken to have been given or received notice of such a decision, it does not require notification of a particular decision.
The Tribunal notes that variations to determinations regarding claims for FTB is provided for under Subdivision C of Division 1 of Part 3 of the FA Administration Act. Notifications of any such variations are required to be provided by the Respondent pursuant to section 32 of the FA Administration Act, however failure to make such a notification does not make the variation ineffective.[37]
[37] Section 32(2) of the FA Administration Act.
Further, section 77 of the FA Administration Act deals with notices in respect of a debt and provides:
Notices in respect of debt
(1) If a debt by a person to the Commonwealth under a provision of this Part has not been wholly paid, the Secretary must give the person a notice specifying:
a. the date on which it was issued (the date of the notice); and
b. the reason the debt was incurred, including a brief explanation of the circumstances that led to the debt being incurred; and
c. the period to which the debt relates; and
d. the outstanding amount of the debt at the date of the notice; and
e. the day on which the outstanding amount is due and payable; and
ea. the effect of sections 78 and 78A; and
f. that a range of options is available for repayment of the debt; and
g. the contract details for inquiries concerning the debt.
(2) The outstanding amount of the debt is due and payable on the 28th day after the date of the notice.
(3) The Secretary may give more than one notice under subsection (1) in relation to a person and a debt of the person.
It is clear that a notice pursuant to section 77 of the FA Administration Act is only required where a debt is outstanding, not where a debt has been fully repaid or recovered. In this instance the Applicant’s debt in relation to the overpayment of his FTB Part B had been fully recovered on each occasion by offsetting and as such there was no requirement for a section 77 notice to be issued as there was no outstanding debt.
The Tribunal notes that there was some conjecture in relation to the referencing of and status of the documents headed “About your Family Tax Benefit” that form Exhibits 3 and 4. The Applicant contended that these letters are not notices provided by the Respondent but rather outline what may happen. The Respondent contented that these letters are notices that contain the details of the annual reconciliation of family assistance payments.
A separate document has been provided in relation to each of the financial years within the Relevant Period outlining the Applicant’s entitlements for that particular year, having been checked (or reconciled) and notifies that overpayments may be offset from the FTB Supplement amounts. Although not in specific terms, these notices or annual statements do demonstrate that an overpayment had been made throughout the particular year, and as a consequence the balance to be paid to the Applicant on each occasion was less than the total of the FTB Part A and Part B Supplements that it is stated he was entitled to.
Consequently, the Tribunal does not accept the contention of the Applicant that no notification at all of the overpayment/debt was made by the Respondent, albeit perhaps it was not made in a clear manner, the annual statement does provide such information.
As the Tribunal is satisfied that FTB Part B debts did arise in the Relevant Period, it is necessary to consider whether those debts were recoverable and whether such recovery by way of offset against the Applicant’s FTB Part A Supplement was appropriate.
It is generally expected that debts to the Commonwealth are recovered. This proposition was expressed by French J in relation to debt recovery in Secretary, Department of Social Security v Hales [1998] FCA 219 as:
The taxpayer is entitled to expect that in the ordinary course money paid to people that they are not entitled to received will be recovered, albeit in a way appropriate to the circumstances which led to the overpayment and the circumstances of the persons concerned.
Section 82 of the FA Administration Act provides ways in which a debt owed by a person is recoverable by the Commonwealth and relevantly provides that one such way is by setting off family assistance to which the person is entitled against the debt.[38] Further section 84A of the FA Administration Act allows the Respondent to determine whether whole or a part of the entitlement is to be set off against the debt.
[38] Section 82(1)(b) of the FA Administration Act.
Section 32A of the FA Administration Act provides that entitlement to FTB Part A and FTB Part B supplements are to be disregarded until the FTB reconciliation conditions have been satisfied. This effectively allows the Respondent to reconcile the amounts of FTB paid to a person with their actual entitlement to FTB and where an overpayment has been made recover the arising debt or part thereof from the persons FTB Part A and FTB Part B Supplements. Where an underpayment occurs then the person would generally be paid their entitlement to the FTB Supplements and any further amounts to which they were entitled.
This accords with the reasons provided for the reduction in the amount of FTB Part A Supplement paid to the Applicant during the financial years within the Relevant Period which are all expressed as being made to offset a FTB Part B overpayment for that year and an adjustment being made offsetting the overpayment on reconciliation.
Each of the amounts of overpayments arising during the Relevant Period were of a value that once offset against the Applicant’s FTB Part A Supplement still left a further amount of that supplement to be paid to the Applicant. Should the overpayments had of been of higher value then the Applicant’s FTB Part B Supplement may have likewise been affected.
Consequently, the Tribunal considers that the offsetting of the overpayments of FTB Part B (which represented debts to the Commonwealth) against the Applicant’s FTB Part A Supplements in the Relevant Period was an appropriate and authorised way open to the Respondent to recover those debts in accordance with sections 82 and 84A of the FA Administration Act. As such the Tribunal considers that the amounts withheld during the Relevant Period from the Applicant’s FTB Part A Supplements were properly withheld as a matter of offset.
The Tribunal notes that when determining whether such offsetting is applied or should be refunded, Instruction 7.2.3 in the Family Assistance Guide provides the following guidance:[39]
[39] Exhibit 1, T Documents, T4, page 30, Extract form the Family Assistance Guide.
…..
Available FTB top-ups (including supplements or lump sum payments) can be used to offset any outstanding FA, social security, and/or other debts due to the Commonwealth. When using this type of offsetting, it is open to the decision maker to apply only part of an amount of FA against a debt to offset it partially, or in full. Such a decision will be guided by the circumstances of the case.
……
Refunding offset amounts
The Secretary may review a decision to offset an individual’s FA, social security and/or other debts due to the Commonwealth against their FA entitlement if exceptional and/or unforeseen circumstances arise that may create severe financial hardship (1.1.S.45). In that instance, the Secretary may choose to refund part, or all of the offset amount. Offset amounts should not be refunded for the purposes of meeting regular living expenses, such as car registration or insurance premiums.
There is no evidence before the Tribunal that suggests or establishes that exceptional and/or unforeseen circumstances had arisen that created the Applicant to experience severe financial hardship. The Applicant’s contentions that the conduct of the Respondent’s representative in the proceedings relating to these matters constitute exceptional circumstances that should be considered is not a relevant consideration. The Applicant has not advanced any evidence to establish that he experienced or was presently experiencing severe financial hardship.
A further consideration in relation to the Applicant’s FTB Part B debts is whether the write off or waiver provisions of the FA Administration Act apply and therefore consequently, whether it is appropriate for those debts either in full or part to be written off or waived. In this instance if such actions were appropriate it would result in the amount of the debt that was offset that was being written off or waived being refunded to the Applicant.
The Respondent submitted that these provisions do not apply in the present instance as the debts were fully recovered by way of offset and as such no debt remained that required recovery. However, on the Tribunal’s reading of the provisions it considers that it is necessary to consider their application to the matter at hand.
The Tribunal notes that when it raised the write off and waiver provisions with the Applicant at the Hearing he was unwilling to engage in a meaningful way regarding the particular requirements. When asked by the Tribunal whether he had considered his position in relation to the non-recovery of debt provisions he contended that there was no proof a debt existed and that as the amounts said to have been a debt have been taken already he could not say he did not have the means to pay. Consequently, the Applicant has made no relevant submissions that could lead the Tribunal to be satisfied that the write off or waiver provisions apply in his case.
Due to the operation of section 84 of the FA Administration Act, for the Applicant’s FTB Part B debts either in whole or part to be written off (put on hold) pursuant to section 95 of the FA Administration Act for the Relevant Period, the Tribunal would need to be satisfied that recovery by way of offset would cause the Applicant severe financial hardship. The Applicant did not advance any the evidence or contentions in relation to him having experienced severe financial hardship.
Based on the evidence before it, the Tribunal finds that the Applicant’s FTB Part B debts for the Relevant Period can not be written off pursuant to section 95 of the FA Administration Act.
In this instance the Tribunal is satisfied that the Applicant received the relevant payments in good faith. Therefore, for the Applicant’s FTB Part B debts either in whole or part to be waived pursuant to section 97 of the FA Administration Act the Tribunal would need to firstly be satisfied that the debt or portion thereof was attributable solely to an administrative error. The Applicant again did not make any direct submissions in relation to this. He maintained his position that there was no debt. The Tribunal has accepted that the Applicant’s FTB Part B overpayments occurred resulting in debts and that the rate calculations of the ARO have been upheld. As such the Tribunal finds that the Applicant’s FTB Part B debts for the Relevant Periods cannot be waived pursuant to section 97 of the FA Administration Act as the debts did not arise as a result of a sole administrative error.
In this instance the Tribunal is satisfied that the FTB Part B debts did not result in the Applicant knowingly making a false statement or false representation or failing to comply with a provision of the family assistance law. Therefore, for the Applicant’s FTB Part B debts either in whole or part to be waived pursuant to section 101 of the FA Administration Act the Tribunal would need to be satisfied that there are special circumstances (other than financial hardship alone) that make it desirable to waive the debts rather than write them off.
Other than the Applicant’s submissions that the conduct of the Respondent’s representative constitute exceptional circumstances that should be taken into consideration, he has not advanced any further evidence in this regard. Therefore, based on the evidence before it, the Tribunal finds that the Applicant’s FTB Part B debts for the Relevant Period can not be waived pursuant to section 101 of the FA Administration Act as special circumstances have not be established.
The Tribunal considers that it is not appropriate for the Applicant’s FTB Part B debts as they arose in the Relevant Period to be written off or waived.
The Tribunal notes that the Applicant raised numerous concerns he has in relation to the conduct of the Respondent’s representative in this matter. The Applicant sought that section 62A of the AAT Act be exercised in relation to conduct which he says involves the representative giving false and misleading evidence. As previously set out the Tribunal explained to the Applicant that the Respondent’s representative does not give evidence and as such the Tribunal considers that section 62A of the AAT Act has no relevance.
The Tribunal considers that the Applicant did not advance any corroborating evidence in support of his numerous allegations against the conduct of the Respondent’s representative. On the Tribunal’s review of the documents before it, it does not consider the Applicant’s allegations in this regard to be founded.
Lastly, the Tribunal notes that despite the Applicant submitting that he has had difficulty presenting his case as he is not a lawyer, he did a very reasonable job of putting forward his position in the draft decision and reasons for decision that he submitted after the Hearing. While the Tribunal recognises the tenacity of the Applicant, the submitted draft decision and reasons for decision are considered to be additional submissions made by the Applicant and for the reasons set out above have not been adopted by this Tribunal.
CONCLUSION
Accordingly, the Reviewable Decision in relation to withholding amounts from the Applicant’s FTB Part A Supplements to offset against the Applicant’s FTB Part B debts is affirmed.
I certify that the preceding 96 (ninety six) paragraphs are a true copy of the reasons for the decision herein of Member D Mitchell
..................[SGD]......................................................
Associate
Dated: 14 May 2021
Date of Hearing: 22 April 2021 Applicant: By telephone Solicitors for the Respondent: Mr Christopher Bishop
Mills Oakley
Key Legal Topics
Areas of Law
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Administrative Law
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Statutory Interpretation
Legal Concepts
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Appeal
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Judicial Review
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Procedural Fairness
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Remedies
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Statutory Construction
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Standing
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