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

[2023] AATA 2394

Lo Presti and Secretary, Department of Social Services (Social services second review) [2023] AATA 2394 (7 August 2023)

Division:GENERAL DIVISION

File Number(s):      2021/9136

Re:Patricia Lo Presti

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Mr S Evans, Member

Date: 7 August 2023

Place:Sydney

The reviewable decision dated 8 October 2021 is affirmed.

.............[Sgd]...........................................................
Mr S Evans, Member

Catchwords

SOCIAL SECURITY — Family tax benefit — Top-up payments — Whether applicant eligible for top-up payment — Tax return lodgement requirements not met — Whether special circumstances exist to allow extension of time for notification of non-lodgement  — Reviewable Decision affirmed.

Legislation

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

Acts Interpretation Act 1901 (Cth)

Cases

Beadle and Director-General of Social Security [1984] AATA 176
Hooker and Secretary, Department of Social Services [2015] AATA 732
Minister for Immigration, Local Government and Ethnic Affairs v Gray (1994) 33 ALD 13
Re Drake and Minister for Immigration, and Ethnic Affairs (No. 2) (1979) 2 ALD 634
Re Secretary, Department of Social Services and Cannon [2015] AATA 1028
Re Secretary, Department of Social Services and Hollis [2015] AATA 941

Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones [2012] FCA 639

Secondary Materials

Social Policy Law – Family Assistance Guide

REASONS FOR DECISION

7 August 2023

INTRODUCTION

1. In May 2021 the Department of Social Services (the Agency) determined that Patricia Lo Presti (the Applicant) was not entitled to be paid a Family Tax Benefit (FTB) top up for the 2018 – 19 financial year because she did not notify the Agency that she was not required to lodge a tax return for that year by 30 June 2020.[1] At the Applicant’s request, that decision was reviewed by an Authorised Review Officer (ARO) who affirmed the decision.[2]

   [1] T5/152

   [2] T6/153

2. The Applicant sought review of the ARO’s decision by the Social Services and Child Support division of the Tribunal (AAT1) which affirmed the decision on 8 October 2021.[3] The Applicant seeks review of that decision at the General Division of the Tribunal.

   [3] T2/5

3. For the reasons that follow, the reviewable decision will be affirmed.

   Legislation and policy

4. The relevant legislation is contained in A New Tax System (Family Assistance) Act 1999 (Cth) (the FA Act), A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (the FA Admin Act) and the Acts Interpretation Act 1901 (Cth) (the Interpretation Act).  

5. The Family Assistance Guide (the Guide) provides relevant departmental policy guidance. It is well established that the Tribunal is not bound by government policy, but it will generally be taken into consideration unless there are cogent reasons not to do so.[4]

   [4] See Re Drake and Minister for Immigration, and Ethnic Affairs (No. 2) (1979) 2 ALD 634, 645 per Brennan J, which was cited with approval in Minister for Immigration, Local Government and Ethnic Affairs v Gray (1994) 33 ALD 13, 30 per French and Drummond JJ

6. FTB is calculated as an annual entitlement based on the combined income of a recipient and their partner. At the end of each financial a reconciliation determines a person’s eligibility for FTB for a relevant income year and their correct entitlement based on actual income.[5]

   [5] The Guide, section 6.4.1.30

7. Section 32A of the FA Admin Act requires that the Secretary disregard the amounts of the FTB supplements when making or varying a determination until an individual has satisfied the FTB reconciliation conditions. The reconciliation time is the time after the end of the financial year when the person notifies of their Adjusted Taxable income for the financial year.[6]

   [6] FA Admin Act, section 32A(1)

8. Section 32B of the FA Admin Act sets out the reconciliation conditions are satisfied if one of the provisions in 32C to 32Q applies at the relevant reconciliation time.

9. Section 32J applies where an individual is not required to lodge an income tax return for the relevant income year. Subsection 32J(2) provides that: 

   (2)  The relevant reconciliation time is whichever is the earlier of the following times:

   (a)  the time after the end of the relevant income year when the first individual notifies the Secretary of the amount of the first individual’s adjusted taxable income for the relevant income year, so long as that notification occurs before the end of:

   (i)  the first income year after the relevant income year; or

   (ii)  such further period (if any) as the Secretary allows, if the Secretary is satisfied that there are special circumstances that prevented the first individual from making that notification before the end of that first income year;

   (b)  the time after the end of the relevant income year when the Secretary becomes satisfied that the first individual’s adjusted taxable income for the relevant income year can be worked out without receiving a notification from the first individual, so long as the Secretary becomes so satisfied before the end of the first income year after the relevant income year.

   (3) The further period under subparagraph (2)(a)(ii) must end no later than the end of the second income year after the relevant income year.

   EVIDENCE AND FACTS  

10. On 18 March 2020 the Agency sent correspondence to the Applicant’s nominated postal address regarding her FTB for 2018 – 19. The correspondence stated in part:

    You need to confirm your family income for the 2018-19 financial year. To do this you need to lodge your tax return or you need to tell us you are not required to lodge, by 30 June 2020.[7]

    [7] T13/402

11. On 19 March the Applicant travelled from Sydney to Melbourne to attend a family event with the expectation she would return to Sydney in early April 2020. On 5 April 2020 the Applicant was in Melbourne when her stepbrother passed away. Later that month the Applicant’s father suffered a stroke.

12. The Applicant remained in Melbourne to care for her father and help manage matters arising from the passing of her step-brother. Whilst in Melbourne she was also caring for and supervising remote learning for her children. She gave evidence of having to manage competing demands on her time. Owing to the unexpected nature of the events which required the Applicant to extend her stay in Melbourne, she did not notify the Agency of her temporary change of address.

13. The Applicant gave evidence that when she was interstate she had contacted the Agency in relation to matters concerning her father. Centrelink electronic screens record the Applicant contacted the agency by telephone regarding review of an unrelated debt decision on 23 May 2020. The Applicant does not recall having contacted the Agency in relation to this matter.  

14. On 27 May 2021 the Applicant notified the Agency she was not required to lodge a tax return for 2018 – 19 income year.

15. It was the Applicant’s evidence that she had received FTB top-up payments in previous years and her usual practice was to call Centrelink to confirm she is not required to lodge.  The Applicant claims not to have received the 18 March 2020 correspondence reminding her to notify the Agency she was not required to lodge by 30 June 2020.

    CONSIDERATION

16. There is no dispute that the Applicant notified the Agency on 27 May 2021 that she was not required to lodge a tax return and that doing so was after the required date provided by section 32J.

17. The 2018 – 19 financial year was not the first time the Applicant was required to submit notification for the purposes of reconciliation, but it was the first occasion she was refused owing to late lodgement. She writes that the Agency failed to inform her that a change in the law required her to notify the Agency she was not required to lodge a tax return within one year of the relevant income year.

18. Regarding the 18 March 2020 correspondence reminding her to notify by 30 June 2020, the Applicant contends it was not posted. She argues that even if it were posted, she would not have received the notification until after she returned to Sydney from Melbourne on 7 July 2020, which was after the 30 June 2020 cut-off date. [8] In any event, the Applicant submits that the reminder was insufficient notice and unclear.  

    [8] T8/169

19. Section 29 of the Interpretation Act provides that if notice is served by post it is deemed to have been affected at the time at which the letter would be delivered in the ordinary course of post. Regardless of whether she was deemed to have received the correspondence, I accept the Applicant could not have read the notification until she returned to Sydney, by which time the 30 June deadline for notification had passed.

20. The Secretary contends that there is no obligation on the part of the Agency to inform each recipient or potential recipient of benefits under social security or family assistance law or of changes in the law affecting any particular payments. I accept the Secretary’s contention and note the observations of Deputy President Constance in Re Secretary Department of Social Services and Cannon, which also concerned a top up payment for FTB:

    As a matter general principle, ignorance of the law is no excuse for a person’s failure to comply with it. In addition, there is no legal obligation on the Secretary or any Government Department to advise potential claimants of changes in the law which may adversely affect them.[9]

    [9] [2015] AATA 1028, [17]

21. Irrespective of these findings, the subsection 32J(2)(a)(ii) of the FA Admin Act provides for an extension of time in which an applicant can notify the Agency if there are special circumstances that prevented notification to be made before the end of the first income year after the relevant income year. The Applicant contends that her circumstances warrant the exercise of this discretion.

22. The expression ‘special circumstances’ is not defined in the FA Admin Act but has been considered extensively by the courts and this Tribunal. In Beadle and Director-General of Social Security, the Tribunal stated that:

    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.[10]

    [10] [1984] AATA 176, [12]

23. A similar provision relating to special circumstances in relation to family assistance law is contained in subparagraph 10(2)(b)(ii) of the FA Admin Act, which was considered by the Tribunal in Hooker and Secretary Department of Social Services where Senior Member Toohey set out a two-part test for applying the special circumstances provisions:

    In order for the time for making a claim to be extended, the Secretary (and so the Tribunal) must be satisfied, firstly, that circumstances existed that were special and, secondly, that those special circumstances prevented the claimant from making his or her claim within time

    …

    …In the case of a late claim for FTB, the special circumstances must prevent a person from making a claim on time. That is a more stringent, two-part test.[11]

    [11] [2015] AATA 732, [14], [19]

24. This approach has been adopted in other decisions by the Tribunal and it is appropriate to apply it in this matter.[12]

    [12] See ReSecretary, Department of Social Services and Hollis [2015] AATA 941 [30]-[31]

25. In Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones the Federal Court observed that ‘special circumstances’ is ‘sufficiently understood as including events or things that render the operation of the statute in a particular case as unfair, unintended or unjust’ and set out that ‘what is required is something that takes the case out of the ordinary, and unfairness or unintended consequences may show that this exists.’[13]

    [13] [2012] FCA 639, [51]

26. I accept the Applicant’s circumstances between March and July 2020 were as detailed by the Applicant. Specifically, she travelled to Melbourne for a brief holiday in May 2020. Owing to unexpected personal matters, she was unable to return to Sydney until 7 July 2021. These circumstances were undoubtedly difficult and stressful but I am not satisfied they were sufficiently unusual or out of the ordinary to be considered ‘special circumstances.’

27. Should they be accepted as special circumstances, the Applicant would need to demonstrate they prevented her from notifying the Agency by 30 June 2020 in order for the reconciliation time to be extended.

28. By her own evidence, the Applicant was in contact with the Agency regarding her father’s affairs when she was in Melbourne. She also appears to have contacted the Agency regarding an unrelated matter. Asked during the AAT1 hearing how long it took to notify the Agency that she was not required to lodge a tax return each year, the Applicant said it took ‘about a minute.’ Having regard to these considerations, I do not accept that the circumstances which existed between March and July 2020 prevented her from notifying the agency she was not required to lodge a tax return.

29. The Applicant claims to have been unaware of the requirement to notify the Agency she was not required to lodge by 30 June 2020. That she made the notification in May 2021 would appear to support this contention. However, being unaware of the requirement to notify by 30 June 2020 is distinct from being prevented from making the notification due to the special circumstances which existed between May and July 2020.

30. For these reasons, I am not satisfied that there are special circumstances that prevented notification to be made before 30 June 2020. 

    DECISION

31. The reviewable decision dated 8 October 2021 is affirmed.

I certify that the preceding 31 (thirty -one) paragraphs are a true copy of the reasons for the decision herein of

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

Associate

Dated: 7 August 2023

Date of hearing:	8 June 2023
Date final submissions received:	14 June 2023
Applicant:	In person
Solicitors for the Respondent:	Mr M Gauci, Hunt & Hunt Lawyers