Lena Giamboi and Secretary, Department of Social Services
[2014] AATA 951
•16 December 2014
[2014] AATA 951
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2014/3081
Re
Lena Giamboi
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Senior Member CR Walsh
Date 16 December 2014 Place Perth The Tribunal affirms the decision under review.
..(Sgd) CR Walsh...............................
Senior Member CR Walsh
CATCHWORDS
FAMILY ASSISTANCE – overpayment of family tax benefit and schoolkids bonus – whether recovery of debt should be written off or waived – debt not attributable solely to an administrative error made by Centrelink – no “special circumstances” – decision under review affirmed
LEGISLATION
A New Tax System (Family Assistance) Act 1999 – s 21 – s 22 – s 35UA – s 58(1) – s 59 – 59(1) – 59(2) –
A New Tax System (Family Assistance) (Administration) Act 1999 – s 16 – s 71(1) – s 71(2) – s 95(1) – s 95(2) – s 95(2)(c) – s 97– s 101 – s 101(a)
Child Support and Family Assistance Legislation Amendment (Budget and Other Measures) Act 2010
CASES
Angelakos and Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Beadle and Director General of Social Security (1985) 60 ALR 225
Chilcott and Secretary, Deparment of Social Security [1998] AATA 520
Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114
Douglas and Secretary, Department of Families, Community Services and Indigenous Affairs [2007] AATA 1072
Dranichnikov v Centrelink [2003] 75 ALD 134
Feneley and Secretary, Department of Family and Community Services (2003) 74 ALD 585
Fischer v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs (2010) 185 FCR 52
Groth v Secretary, Department of Social Security [1995] FCA 989; (1995) 40 ALD 541
Jazazievska v Secretary, Department of Family and Community Services (2000) 65 ALD 424
Jones and Secretary to the Department of Family and Community Services [2003] AATA 62
Klaverstyn and Secretary, Department of Family and Community Services [2003] AATA 71
Nay and Secretary, Department of Family and Community Services [2003] AATA 1004
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Brian Lawlor Automotive Pty Ltd and Collector of Customs (NSW) (1978) 1 ALD 167
Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Re Ivocic and Director General of Social Services [1981] AATA 57
Re Secretary, Department of Family and Community Services and Duzevich [1996] AATA 63; 41 ALD 461
Re Secretary, Department of Family and Community Services and Jonauskas [2001] AATA 72
Sekhon v Secretary, Department of Family and Community Services (2003) 132 FCR 126
Secretary of the Department of Education, Employment, Training and Youth Affairs v Prince (1997) 50 ALD 186
SECONDARY MATERIALS
Guide to Social Security Law – 1.1.S.45 - 6.7.3.30
REASONS FOR DECISION
Senior Member CR Walsh
16 December 2014
INTRODUCTION
This application concerns whether Ms Giamboi has a recoverable debt, in relation to overpayments of family tax benefit (FTB) and schoolkids bonus, and, if so, whether all or part of that debt should be written off or waived.
Specifically, Ms Giamboi seeks review of a decision of the Social Security Appeals Tribunal (SSAT), dated 19 May 2014, which affirmed the decision of a Centrelink authorised review officer (ARO), dated 5 March 2014, to raise and recover the following debts from Ms Giamboi:
(i)overpayments of FTB in the 2010/2011 financial year, totalling $9,598;
(ii) overpayments of FTB in the 2011/2012 financial year, totalling $10,288.26;
(iii) overpayments of FTB in the 2012/2013 financial year, totalling $8,238.86; and
(iv) an overpayment of schoolkids bonus, totalling $1,230.
FACTUAL & PROCEDURAL BACKGROUND
Ms Giamboi receives FTB in relation to her 3 children: Joshua, Matthew and Anthony (Children).
Centrelink records show that from 15 February 2004 Ms Giamboi had 100% care of the Children for FTB purposes.
From 4 February 2008, Ms Giamboi and her ex-husband shared care of the Children, each having 50% care. There is no record of Centrelink being advised of any change in the percentage of care of the Children at that time.
In the period from 4 February 2008 to 1 August 2013 (Relevant Period), Ms Giamboi continued to receive FTB payments calculated on the basis that she had 100% (rather than 50%) care of the Children.
During the period from February 2008 to 3 July 2013 (which covers the majority of the Relevant Period), Centrelink sent Ms Giamboi various letters regarding the rate of FTB to which she was entitled.[1] Only the letters sent to Ms Giamboi by Centrelink from 21 June 2013 show the actual percentage of care on which the payment of FTB to Ms Giamboi was based. The earlier letters sent to Ms Giamboi by Centrelink only showed the rate of FTB payable to Ms Giamboi. None of the letters sent to Ms Giamboi by Centrelink during the period from February 2008 to 3 July 2013 show any reduction in the rate of FTB payable to Ms Giamboi.
[1] These include letters sent on the following dates: 16 February 2008, 21 June 2010, 25 June 2010, 17 August 2010, 6 September 2010, 20 September 2010, 23 September 2010, 4 October 2010, 7 January 2011, 7 March 2011, 24 June 2011, 1 October 2011, 5 November 2011, 22 June 2012, 30 September 2012, 5 November 2012, 8 November 2012, 10 November 2012, 22 November 2012, 8 December 2012, 2 January 2013, 3 January 2013, 17 January 2013, 24 January 2013, 30 January 2013, 9 February 2013, 7 March 2013, 14 March 2013, 5 April 2013, 6 June 2013, 21 June 2013 and 3 July 2013.
On 25 July 2013, Ms Giamboi and her ex-husband attended Centrelink’s offices to advise that:
their 50% of care on system is not correct and they both advised CSA [i.e. the Child Support Agency] at time of change. Have CSA [i.e. the Child Support Agency] assessment as poof of change. Will complete Shared Care forms to have system updated with correct information and will be Appealing any DEBT.
On 12 August 2013, Centrelink advised Ms Giamboi that she had been overpaid $9,598.06 in FTB for the 2010/2011 financial year and that she had been overpaid $10,288.26 in FTB for the 2011/2012 financial year and that those overpayments were debts due to the Commonwealth.
On 16 August 2013, Ms Giamboi sought an internal review of the decisions made by Centrelink on 12 August 2013.
On 3 October 2013, Centrelink advised Ms Giamboi that she had been overpaid $8,238.86 in FTB for the 2012/2013 financial year and that an amount of $4,939 had been recovered from the intercept by the Commonwealth of a tax refund and the balance of the overpayment (being $3,299.86) was a debt due to the Commonwealth.
On 14 January 2014, a Centrelink officer made an inquiry with the Child Support Agency (CSA) as to when Ms Giamboi advised of the change in shared care of the Children from 100% to 50% as “Centrelink has been paying [Ms Giamboi] based on 100% care and now that shared care has been corrected this has created numerous overpayments for [Ms Giamboi] for FTB”.
On 23 January 2013, the CSA advised Centrelink that the last decision it made about percentage of care of the Children, prior to 1 July 2010,[2] was on 1 July 2008. This decision was that Ms Giamboi had 51% care of the Children and that her ex-husband had 49% care of the Children. Further, Centrelink’s computer records, dated 23 January 2013, state:
The backdating of 50% care to DOV [i.e. the date of variation] 04.02.08 has generated overpayments. Note that Alignment of care began from 01.07.10, yet for 01.07.10, care was not aligned between ISIS [i.e. Centrelink’s computer system] and CUBA [i.e. the CSA’s computer system,]. With FAO [i.e. the Family Assistance Office] making new care assessment from 04.02.08 (and 22.11.12) of a lesser percentage.
[2] On 1 July 2010, legislative change brought about an alignment in the care provisions for child support and FTB purposes. That is, from 1 July 2010, it was no longer necessary for a customer to separately advise the CSA and Centrelink/Family Assistance Office of any change in care.
On 21 February 2014, Centrelink advised Ms Giamboi that she had been overpaid $1,230 in schoolkids bonus in 2013 and that this amount was a debt due to the Commonwealth.
On 5 March 2014, an ARO affirmed Centrelink’s decisions of 12 August 2013, 3 October 2013 and 21 February 2014 (ARO Decision).
On 12 March 2014, Ms Giamboi applied to the SSAT for a review of the ARO Decision.
On 19 May 2014, the SSAT affirmed the ARO Decision (SSAT Decision).
On 16 June 2013, Ms Giamboi applied to this Tribunal for a review of the SSAT Decision.
ANALYSIS
Whether Ms Giamboi has recoverable debts in relation to overpayments of FTB and schoolkids bonus
Overpayment of FTB
An individual is eligible for FTB in ordinary circumstances if the individual has at least one “FTB child,” is an Australian resident and if the individual’s rate of FTB would be greater than nil: s 21 of the A New Tax System (Family Assistance) Act 1999 (FAA).
It is common ground that Ms Giamboi had an “FTB child”, as defined in s 22 of the FAA, and that she was eligible for FTB payments, in accordance with s 21 of the FAA, in the Relevant Period.
Section 58(1) of the FAA provides that an individual’s rate of FTB is to be calculated in accordance with the Rate Calculator in Schedule 1 of the FAA. The Rate Calculator in Schedule 1 of the FAA provides, among other things, that the rate of FTB payable to a person is affected by the “shared care percentage” of the person.
Section 59 of the FAA, titled “Shared care percentages where individual is FTB child of more than one person who are not members of the same couple” states:
59 Shared care percentages where individual is FTB child of more than one person who are not members of the same couple
(1) An individual has a shared care percentage under this section for an FTB child of the individual if:
(a) the Secretary has determined the individual’s percentage of care for the child during a care period; and
(b) that percentage is at least 35% and not more than 65%.
Note: Paragraph 27(2)(b) deals with the percentage of care in a blended family case.
(2) The individual’s shared care percentage for the FTB child is the relevant percentage specified in column 2 of the table.
Shared care percentages
Item
Column 1
Individual’s percentage of care
Column 2
Shared care percentage
1
35% to less than 48%
25% plus 2% for each percentage point over 35%
2
48% to 52%
50%
3
more than 52% to 65%
51% plus 2% for each percentage point over 53%
Because Ms Giamboi had only 50% care of her children during the 2010/2011, 2011/2012 and 2012/2013 financial years, FTB should have been shared between her and her ex-husband, who cared for the children the other 50% of the time. Consequently, Ms Giamboi’s “share care percentage” in the Relevant Period, pursuant to s 59 of the FAA, should have been 50%.
If the shared care percentage of 50% was properly taken into account, it follows that the rate of FTB payable to Ms Giamboi, in accordance with the Rate Calculator in Schedule 1 of the FAA, would have been less than the amount of FTB that she received in the Relevant Period.
Based on the evidence, the Tribunal finds that:
(i)for the 2010/2011 financial years, Ms Giamboi was paid FTB of $16,995.17 when she was entitled to FTB of $7,397.11, resulting in an overpayment of $9,598.06;
(ii)for the 2011/2012 financial years, Ms Giamboi was paid FTB of $18,223.14 when she was entitled to FTB of $7,934.88, resulting in an overpayment of $10, 288.26;
(iii)for the 2012/2013 financial years, Ms Giamboi was paid FTB of $14,718.69 when she was entitled to FTB of $6,479.83, resulting in an overpayment of $8,238.86; and
(iv)the overpayments were correctly calculated by the SSAT in the SSAT Decision.
Overpayment of schoolkids bonus
Section 35UA of the FAA provides that an individual is eligible for schoolkids bonus on a “bonus test day” if there is a determination in place that the individual is eligible for FTB, the rate of FTB would be greater than nil and the rate was worked out taking into account one or more FTB children who are relevant schoolkids bonus children.
On 21 January 2013 and 5 July 2013, Ms Giamboi was paid schoolkids bonus payments totalling $2,460. As Ms Giamboi had a shared care percentage of only 50% on those dates, she was only entitled to 50% of the schoolkids bonus payment. Accordingly, Ms Giamboi was overpaid an amount of $1,230 in schoolkids bonus in 2013.
Overpayments debts due to the Commonwealth
Section 71(1) of the A New Tax System (Family Assistance) (Administration) Act 1999 (FAAA) provides that if an amount is paid to a person by way of FTB or schoolkids bonus, and the person was not entitled to the payment, the amount so paid is a debt due to the Commonwealth by the person. Further, s 71(2) of the FAAA provides that if an amount has been paid to a person by way of FTB or schoolkids bonus, and that amount is greater than the amount that should have been paid to the person under family assistance law, the difference between the amount paid to the person and the amount the person should have been paid is a debt due to the Commonwealth by the person.
Pursuant to s 71 of the FAAA, any amount of FTB and schoolkids bonus paid to Ms Giamboi in the Relevant Period, which was more than the amount to which she was entitled in that period, are debts due to the Commonwealth.
Whether Ms Giamboi’s debts should be written off or waived
Write-off
Section 95(2) of the FAAA provides that the Secretary (and, in his shoes, the Tribunal) “may” decided to write off a debt due to the Commonwealth for a stated period or otherwise, under s 95(1) of the Administration Act 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. [Emphasis added]
Since none of the circumstances in s 95(2) of the FAAA apply to Ms Giamboi, it is inappropriate to write off her debts under s 95(1) of the FAAA. That is, Ms Giamboi’s debts are not irrecoverable at law, Ms Giamboi’s whereabouts are not unknown and it is, in the Secretary’s contention, cost effective for the Commonwealth (i.e. Centrelink) to recover the debts from Ms Giamboi.
In relation to Ms Giamboi’s “capacity to repay” the debts, the Tribunal notes that Ms Giamboi has been repaying her debts via withholdings from her ongoing FTB payments, and by the interception of her 2013 tax refund, and this does not appear to have caused Ms Giamboi severe financial hardship. In such circumstances, the Tribunal finds that Ms Giamboi has “capacity to repay the debt” for the purposes of s 95(2)(c) of the FAAA.
Waiver – Centrelink administrative error
Section 97 of the FAAA states:
97 Waiver of debt arising from error
(1) The Secretary must waive the right to recover the proportion (the administrative error proportion) of a debt that is attributable solely to an administrative error made by the Commonwealth if subsection (2) or (3) applies to that proportion of the debt.
(2) The Secretary must waive the administrative error proportion of a debt if:
(a) the debtor received in good faith the payment or payments that gave rise to the administrative error proportion of the debt; and
(b) the person would suffer severe financial hardship if it were not waived.
(3) The Secretary must waive the administrative error proportion of a debt if:
(a) the payment or payments were made in respect of the debtor’s eligibility for family assistance for a period or event (the eligibility period or event) that occurs in an income year; and
(b) the debt is raised after the end of:
(i) the debtor’s next income year after the one in which the eligibility period or event occurs; or
(ii) the period of 13 weeks starting on the day on which the payment that gave rise to the debt was made;
whichever ends last; and
(c) the debtor received in good faith the payment or payments that gave rise to the administrative error proportion of the debt.
(4) For the purposes of this section, the administrative error proportion of the debt may be 100% of the debt.
Ms Giamboi told the SSAT that she is 80-90% sure that she advised Centrelink of the change in percentage of care. However, Centrelink has no record of any conversation regarding a change in percentage of care of the children until 25 July 2014.
At her hearing before this Tribunal, Ms Giamboi stated that she is now 100% sure that she advised Centrelink of the change in her percentage care of the Children in 2008 (i.e. from 100% to 50%). In a letter to the Tribunal in support of her application, dated 29 September 2014 (September 2014 Letter), Ms Giamboi stated:
· I am 100% certain that in the period leading up to the commencement of the 2008 school year, I contacted Centrelink and the [CSA] to advise of a change in care arrangements for the [Children]. I advised Centrelink and the [CSA] that care arrangements would be evenly shared with the [Children’s] father, Antonino Giamboi, 50% each.
· At the previous hearing with the [SSAT], I felt intimidated by the process and questioning, which made me doubt myself about whether I had advised the relevant agencies. However, on reflection and away from the pressure of the [SSAT] hearing, I am 100% confident that I advised both Centrelink and the [CSA] of the change in care arrangements described above, prior to the commencement of the 2008 school year.
· The [CSA] acted on the advice provided by me, as indicated in their records, with the level of child support changing to reflect the 50%-50% care arrangements between myself and the children’s father. This provides evidence that advice was provided in a timely manner.
· In support of my claim that I contacted and advised Centrelink of the change in care arrangements, I wish to draw your attention to the Section 37 (T documents). In particular, T83 (pages 233-246)….These documents provide proof of numerous occasions where I initiated contact with Centrelink. For example, contacts are recorded on 04/12/2007, 14/12/2007, 21/01/2008, 22/01/2008 and 21/02/2008. These dates are in the period either just prior, or just after, the change in care arrangements coming into place. Whilst the contacts were made for a variety of reasons, I am certain that I would have also provided information relating to the change in my care arrangements, either on one of these occasions or on a separate contact, where that information and/or contact has not been properly recorded or actioned.
· …………..
· As far as I was concerned, I had provided the information to both Centrelink and the [CSA] in good faith. I placed my trust in the officers at Centrelink and the [CSA] to record the information on their system and to make whatever changes were necessary at the time to the respective payments………However, I believe that the Centrelink Family Assistance Office failed to record and action the information provided to them, and this error has created the debts against me.
Ms Giamboi told the Tribunal that whilst she had no specific recollection of advising Centrelink of the change in care (from 100% to 50%) in 2008, it was her usual practice to inform both Centrelink and the CSA of any changes in her circumstances. Ms Giamboi said that she believed that “if she advised one [i.e. CSA], she would have advised the other [i.e. Centrelink]” and that, in her opinion, notifying the CSA and Centrelink went “hand in hand”.
As stated above, Centrelink has no record of any telephone conversation with Ms Giamboi in which she advised it of a change in care of the Children in 2008 before 25 July 2014. Despite the absence of such a record, the Tribunal accepts Ms Giamboi’s evidence before this Tribunal and the SSAT that she did contact Centrelink to advise of the change in care of the Children in 2008 (i.e. from 100% to 50%). It follows that the fact that Centrelink failed to record this change, represents an administrative error on the part of Centrelink.
The question then becomes whether, for the purposes of s 97 of the FAAA, Ms Giamboi’s debt is attributable “solely” to an administrative error by Centrelink.
In Sekhon v Secretary, Department of Family and Community Services (2003) 132 FCR 126, the Full Federal Court considered the meaning of the phrase “attributable solely to an administrative error.” At [35], Selway J said:
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. [Emphasis added] [3]
[3] See also Re Ward and Secretary, Department of Family and Community Services [2000] AATA 212 at [47].
In relation to when a debt is attributable solely to administrative error, the “Guide to Social Security Law” (Guide)[4] states (at 6.7.3.30):
In general, wherever a mistake has been made in administering a payment, the debt will arise ‘solely to an administrative error’ providing the recipient’s conduct has not contributed to the debt in any way.
Examples of administrative error include mistakes in:
·Calculating the amount of a payment,
·Determining which social security payment/s a person is entitled to be paid, and
·Correctly actioning information provided by the recipient.
The requirement that part of the debt must have arisen ‘solely’ from administrative error means that there must have been no other factors that caused the debt to arise or contributed to the debt arising. The part of the debt must have arisen as a result of administrative error alone. [Emphasis added]
[4] The Tribunal should apply lawful ministerial policy unless there are cogent reasons not to: Re Drake and minister for immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 644-5 per Brennan J.
As stated above (in paragraph [7]), throughout the Relevant Period Centrelink sent Ms Giamboi various letters (notices) in relation to her FTB entitlements, and although the notices sent to her, prior to 21 June 2013, did not expressly state the “shared care percentage” on which Ms Giamboi’s FTB payments were based (for example, 100% or 50%), they did set out the rate of FTB payable to Ms Giamboi.
Ms Giamboi told the Tribunal that she recalls receiving such letters from Centrelink every fortnight during the Relevant Period but that she did not pay much attention to the letters – she said that she normally gave the letters a “little look” and then filed them away. Ms Giamboi stated that she accepted the content of the letters as being correct and that she had assumed Centrelink had calculated her FTB payments accurately, based on the information she provided to Centrelink, and, therefore, she did not seek to clarify the content of the letters with Centrelink.
In the September 2014 Letter, Ms Giamboi stated:
· Whilst numerous letters were provided by Centrelink concerning [FTB], I could not see any reference to the percentage of care over the years, until a letter received in July 2013. Hence, between 2008 and July 2013, I had assumed that my records were in order. I had no reason to believe there was any error. As a busy single mum, juggling the needs of three young boys, together with work and personal commitments, I place my trust in the officers of Centrelink and [CSA] as experts in administering these Government payments. At the time of the change in care arrangements, the [Children’s] father had waived his right to claim [FTB], and allowed me to be the sole claimant for [FTB]. Hence, I assumed that this may have contributed to any big change in the rate of FTB at the time. However, I am obviously not an expert in the policy and eligibility requirements around FTB, and how amounts may or may not change depending on circumstances. I accepted the letters that I received to be correct as I believed that Centrelink had all the appropriate information that I had provided over the years
As outlined above, by Ms Giamboi’s own admission, she did not pay much attention to the letters (notices) Centrelink sent her during the Relevant Period. Had Ms Giamboi checked the rate of FTB payable to her after the change in care of the Children in 2008, she ought to have noticed that the rate had not decreased (even in circumstances where she was aware that her ex-husband had waived his entitlement to FTB), despite her care reducing from 100% to 50%, at which time she could have made the appropriate enquiries with Centrelink. In such circumstances, it cannot be said that Ms Giamboi’s debt is attributable “solely” to an administrative error made by Centrelink for the purposes of s 97(1) of the FAAA: Sekhon and the Guide (at 6.7.3.30). Ms Giamboi’s conduct in not paying closer attention to the content of the letters sent to her by Centrelink throughout the Relevant Period contributed to the creation of her debt.
Having found that Ms Giamboi debts are not “solely” attributable to Centrelink’s administrative error it is strictly unnecessary for the Tribunal to also consider whether: (i) Ms Giamboi received the overpayments of FTB and schoolkids bonus in “good faith” for the purposes of s 97(2)(a) of the FAAA; and (ii) Ms Giamboi would suffer “severe financial hardship”, within the meaning of s 97(2)(b) of the FAAA if her Centrelink debt (for the 2012/2013 financial year) was not waived. However, for completeness, the Tribunal makes the following comments in relation to these issues.
Good faith
The meaning of the phrase “received in good faith” has been considered in a number of cases, including Secretary of the Department of Education, Employment, Training and Youth Affairs v Prince (1997) 50 ALD 186; Chilcott and Secretary, Deparment of Social Security [1998] AATA 520 and Jazazievska v Secretary, Department of Family and Community Services (2000) 65 ALD 424 where the Full Federal Court said at [436]:
A person does not act in good faith where the person turns a blind eye to the circumstances which raise doubt as to the entitlement of the person to receive and retain the payment or refuses to make reasonable inquiries where doubt exists.
Based on Ms Giamboi’s evidence before it and the SSAT, the Tribunal considers that Ms Gaimboi received the overpayments of FTB and schoolkids bonus in the Relevant Period in “good faith”. That is, at the time Ms Giamboi received the overpayments of FTB, she genuinely believed that she had advised Centrelink of the change in care, she did not know that she continued to receive FTB based on having 100% care of the Children and that she did not turn a blind eye to the circumstances in which she was receiving payments.
Severe financial hardship[5]
[5] In relation to the FTB overpayments in the 2010/2011 and 2011/2012 financial years, it is appropriate to consider s 97(3) of the FAAA because the debt was raised on 16 August 2013, which is after the end of the next income year after the years in which the debts arose. This means that it is not necessary for Ms Giamboi to show that she would suffer “severe financial hardship,” as that expression is understood to mean, if the debts for those years were not waived. However, it is necessary for Ms Giamboi to establish “severe financial hardship” in relation to the FTB and schoolkids bonus overpayments in the 2012/2013 financial year.
The meaning of the phrase “severe financial hardship” has been considered in a number of cases, including Feneley and Secretary, Department of Family and Community Services (2003) 74 ALD 585 at [587]; Douglas and Secretary, Department of Families, Community Services and Indigenous Affairs [2007] AATA 1072 at [44]; Jones and Secretary to the Department of Family and Community Services [2003] AATA 62 at [25]; Nay and Secretary, Department of Family and Community Services [2003] AATA 1004 at [23] and Klaverstyn and Secretary, Department of Family and Community Services [2003] AATA 71 at [31]-[33]. It is self-evident from the imposition of the word “severe” before the expression “financial hardship” that the financial hardship concerned must be harsh, extreme or serious in nature.
Ms Giamboi told the SSAT that she works as a waitress and is making ends meet, and that her gross income per week is about $975. Ms Giamboi told this Tribunal that, since the SSAT Decision, she had received a “significant” pay rise and that she was currently financially “okay”.
Based on her evidence before the SSAT and this Tribunal, Ms Giamboi would not suffer “severe financial hardship” if she is required to repay the overpayment of FBT and schoolkids bonus for the 2012/2013 financial year. In reaching this conclusion, the Tribunal notes the policy contained in the Guide (at 1.1.S.45), which provides that in deciding whether there would be a “severe financial hardship,” the individuals various circumstances should be taken into account including:
·the make-up of the family group;
·current family income and expenses;
·the minimum amount of expected debt repayment under Centrelink guidelines;
·the standard reduction amounts for any outstanding FTB advances;
·available funds; and
·exceptional expenses.
Waiver – special circumstances
Section 101 of the FAAA provides that the Secretary (and, in his shoes, the Tribunal) “may” waive the right to recover all or part of a debt if he 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 more appropriate to waive than to write off the debt or part of the debt. [Emphasis added]
Ms Giamboi has indicated that she was aware of the requirement in the FAAA, to advise Centrelink of any change in care arrangements for the Children. The Tribunal also notes that this requirement is recorded in each of the letters sent by Centrelink to Ms Giamboi throughout the Relevant Period: see paragraph [7] above. Since the Tribunal finds that Ms Giamboi genuinely believed that she had advised Centrelink of the change in care at the time that the care change of the Children occurred (in 2008), it finds that Ms Giamboi’s debts did not result wholly or partly from Ms Giamboi or another person “knowingly”[6] making a false statement or representation or failing or omitting to comply with a provision of the family assistance law for the purposes of s 101(a) of the FAAA.
[6] The term “knowingly” is not defined in the FAA or the FAAA but has been considered by the Tribunal on a number of occasions: see, for example, Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435 at [48] – [[49] per DP Forgie; Re Secretary, Department of Family and Community Services and Jonauskas [2001] AATA 72; Re Anderson and Secretary, Department of Families and Community Services (2002) 69 ALD 484 at [27]; Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114 at 74.
The question then becomes whether there are “special circumstances” (other than financial hardship alone) in Ms Giamboi’s case that make it desirable to waive the right to recover all or part of Ms Giamboi’s debt to Centrelink for the purposes of s 101(b) of the FAAA.
The expression “special circumstances” is not defined in FAA or the FAAA but has been considered on a number of occasions by the Federal Court and Tribunal in the social security law (and family assistance law) context. In summary, it has been held that for circumstances to constitute “special circumstances” they must be circumstances which are “unusual, uncommon or exceptional,” “markedly different from the usual run of cases,” “special” or “out of the ordinary” and they include “events which would render the (strict application of the rule in question) unfair or inappropriate:” see for example, Re Ivocic and Director General of Social Services [1981] AATA 57 at [45]; Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3 per Toohey J; Beadle and Director General of Social Security (1985) 60 ALR 225 at 228 as per Bowen CJ, Fisher and Lockhart JJ; Groth and Secretary, Department of Social Security (1995) 40 ALD 541 at [545] per Kiefel J; Dranichnikov v Centrelink [2003] 75 ALD 134 at [66] per Hill J; Angelakos and Secretary Department of Employment and Workplace Relations [2007] FCA 25 at [33] and Davy and Secretary Department of Employment and Workplace Relations [2007] AATA 1114 at [80]. Circumstances might be “special” although they apply to more than one person or class of persons, provided they are not of universal application (for example, they are a common or universal characteristic of social security recipients): see Fischer v Secretary, Department of Families, Housing, Community Services & Indigenous Affairs (2010) 185 FCR 52 at [65].
The Tribunal notes the following evidence of Ms Giamboi:
·Ms Giamboi is 100% sure that she advised Centrelink of the change of care of the Children in 2008;
·in 2009 and 2010, Ms Giamboi spent considerable time nursing her brother who had been diagnosed with cancer, which required her (sometimes with the Children) to travel to and from Sydney frequently and this was a considerable financial expense to her;
·she and the Children are in good health;
·the size of her Centrelink debt (originally about $30,000) caused her stress and she feels that she is about 10 years behind of where she would like to be financially;
·she is able to make ends meet on her current income; and
·she has recently received a significant pay rise.
The Tribunal finds that there is nothing sufficiently “unusual, uncommon or exceptional”, “markedly different”, “special” or “out of the ordinary” in Ms Giamboi’s circumstances for them to constitute “special circumstances” for the purposes of s 101 of the FAAA.
DECISION
For the above reasons, the Tribunal affirms the SSAT Decision.
I certify that the preceding 57 (fifty seven) paragraphs are a true copy of the reasons for the decision herein of Senior Member CR Walsh
..(Sgd) T Freeman................
Associate
Dated 16 December 2014
Date of hearing 12 December 2014 Representative for the Applicant Self Representative for the Respondent Ms A Ladhams Solicitors for the Respondent Australian Government Solicitor
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