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

[2018] AATA 4465

LXML and Secretary, Department of Social Services (Social services second review) [2018] AATA 4465 (30 November 2018)

Division:GENERAL DIVISION

File Number:           2018/0070

Re:LXML

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Member C Edwardes

Date:30 November 2018

Place:Perth

The Tribunal affirms the decision of the AAT1.

............[sgd]............................................................

Member C Edwardes

CATCHWORDS

SOCIAL SECURITY – failure to lodge tax returns – FTB entitlement – lump sum claims – whether special circumstances prevented applicant making claim – prescribed time – decision affirmed 

LEGISLATION

A New Tax System (Family Assistance) (Administration) Act 1999 (Administration Act) –
s 5, s 7, s 10(2), s 10(2A), s 13, s 128

A New Tax System (Family Assistance) Act 1999 (Cth)
Administrative Appeals Tribunal Act 1975 (Cth) – s 25(1)

CASES

Drake v Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634

Secretary, Department of Social Services and Smith [2017] AATA 699
Tanoski v Secretary Department of Social Services [2016] AATA 353
VQSL v Secretary Department of Social Services [2017] AATA 294

SECONDARY MATERIALS

Department of Social Security, Guide to Social Policy Law: Family Assistance Guide (Department of Social Security, Version 1.207, 5 November 2018)

REASONS FOR DECISION

Member C Edwardes

30 November 2018

1. The Applicant seeks review of the decision made by the Social Services and Child Support Division of the Administrative Appeals Tribunal (the AAT1) on 4 December 2017 (T2, 6-8). The AAT1 found that it has:

   no discretion available to extend this period beyond that provided under subsection 10(2A) of the Administration Act and the result is that [the Applicant] is not entitled to receive FTB for the periods under review (T2, 8).

2. The Applicant applied on 8 January 2018 to the General Division of the Administrative Appeals Tribunal (the Tribunal) for review (T1, 1).

3. The Applicant gave the following reasons for the current application for review:

   I was entitled to the payments from centrelink (sic), for which I gave them my income details, but due to my partner at the time not complying with Australian Tax Office requests for information, I was denied all payments for the periods included in this decision (T1, 4).

4. The Applicant is self-represented and attended the hearing in person on 8 November 2018. The Respondent was represented by Ms Jones-Bolla of Sparke Helmore. The Tribunal greatly appreciates the assistance provided by the parties during the review process.

5. Section 25(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act) provides that other “enactments” grant the Tribunal jurisdiction to review certain decisions made under those enactments. Section 25(1) of the AAT Act states:

   (1)An enactment may provide that applications may be made to the Tribunal:

   (a)for review of decisions made in the exercise of powers conferred by that enactment; or

   (b)for the review of decisions made in the exercise of powers conferred, or that may be conferred, by another enactment having effect under that enactment.

6. Section 128 of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (the Administration Act) is the enactment which provides that the application may be made to the Tribunal for a second review of the decision.

   BACKGROUND

7. The Applicant was sent advice from the Department of Human Services (the Department) on 18 April 2012 asking the Applicant and/or her partner to file their tax returns for the 2010/11 financial year by 30 June 2012 (T5, 44).

8. The Applicant was sent advice from the Department on 15 April 2013 asking the Applicant and/or her partner to file their tax returns for the 2011/12 financial year by 30 June 2013 (T7, 48).

9. The Applicant’s Family Tax Benefit (FTB) was cancelled as a result of incurring three non-lodger debts for failing to file income tax returns (T11, 223).

10. The Applicant received lump sum FTB payments on 30 May 2017 and 31 May 2017 (T15, 247).

11. The Applicant submitted claims for an annual lump sum payment of FTB to the Department on the 17 July 2017 (T15, 249-251) for the financial years of 2012/13 (T8, 52-105); 2013/14 (T8, 106-163); and 2014/15 (T8, 164-218).

12. The Applications were rejected by the Department on 24 July 2017 (T10, 220).

13. The Applicant sought review of the rejection by the Department on 24 July 2017 (T9, 219). The review was undertaken by an Authorised Review Officer (ARO) of the Department and a decision was made on 2 August 2017 (T11, 222).

14. The ARO affirmed the 24 July 2017 decision of the Department and stated (T11, 222-224):

    Family Assistance law requires that in order to receive Family Tax Benefit, a claim must be made within certain timeframes.

    In order to be paid FTB for the 2012/13 financial year, a claim must be lodged within the department by 30 June 2014 to be considered an effective claim for a person to be entitled to FTB for that year. Similarly, for the 2013/14 financial year, an FTB claim must be lodged by 30 June 2015, and for the 2014/15 financial year, an FTB claim must be lodged by 30 June 2016.

    An extension to this lodgement timeframe can be granted if there were special circumstances which prevented a person from lodging their claim within the timeframe. This extension can only be granted until the end of the second lodgement year. This means:

    ·for the 2012/13 financial year, an extension is unable to be granted past 30 June 2015,

    ·for the 2013/14 financial year, an extension cannot be granted past 30 June 2016, and

    ·for the 2014/15 financial year, an extension cannot be granted past 30 June 2017.

    Your 2012/13, 2013/14 and 2014/15 FTB lump sum claims were received by the department on 17 July 2017 and are considered as being lodged on this date…

    ISSUES

15. The Tribunal must consider:

    ·whether the Applicant had a lump sum FTB entitlement for the 2012/13, 2013/14 and 2014/15 financial years;

    ·whether the lump sum claims were lodged within the requisite timeframe;

    ·if not, whether the claims were lodged prior to the end of the second financial year so that the claims can satisfy the special circumstances provision; and

    ·if so; whether there were special circumstances that prevented the Applicant from making a claim prior to the requisite timeframe.

    LEGISLATION AND RELEVANT POLICY

16. The legislative framework comprises of A New Tax System (Family Assistance) Act 1999 and the Administration Act.

17. A claim must be made under section 5 of the Administration Act for a person to become entitled to a FTB.

18. Section 7 of the Administration Act states:

    (1)An individual or approved care organisation (a claimant) may make a claim:

    (a)for payment of family tax benefit by instalment; or

    (b)for payment of family tax benefit for a past period; or

    (c)in the case only of a claimant who is an individual—for payment of family tax benefit by single payment/in substitution because of the death of another individual.

    Form etc. of claim

    (2)To be effective:

    (a)a claim must:

    (i)     be made in a form and manner; and

    (ii)    contain any information; and

    (iii)    be accompanied by any documents;

    required by the Secretary; and

    (aa)in the case of a claim for family tax benefit by instalment—the bank account requirement set out in section 7A must be satisfied in relation to the claim; and

    (b)in the case of a claim by an individual for payment of family tax benefit by instalment or for a past period—the tax file number requirement in section 8 must be satisfied in relation to the claim; and

    (c)in the case of a claim by an individual for payment of family tax benefit in substitution because of the death of another individual—the tax file number requirement in section 8A must be satisfied in relation to the claim.

    (3)A claim is not effective if it is made before the early claim day.

19. Section 10 of the Administration Act refers to restrictions on claims for payment of FTB for a past period. Subsections 10(2) and (2A) of the Administration Act state:

    (2)A claim for payment of family tax benefit for a past period is not effective if:

    (a)the period does not fall wholly within one income year; or

    (b)the period does fall wholly within one income year (the relevant income year) but the claim is made after 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 claimant from making the claim before the end of that first income year.

    (2A)The further period referred to in subparagraph (2)(b)(ii) must end no later than the end of the second income year after the relevant income year.

20. Section 13 of the Administration Act requires the Tribunal to determine that the claim is an effective claim.

21. The Tribunal is assisted by the Department of Social Security’s Guide to Social Policy Law: Family Assistance Guide (Department of Social Security, Version 1.207, 5 November 2018) (the Guide). The Guide provides assistance to those who administer the Act. Whilst not bound to apply policy guidelines, the Tribunal will usually do so unless there are cogent reasons in a particular case not to do so (refer to re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634).

    EVIDENCE

22. The Tribunal has before it the following documents:

    ·Applicant’s submission, dated 4 October 2018 (Exhibit A1);

    ·Section 37 documents (T1-T15, 1-255) (Exhibit R1);

    ·Respondent’s Statement of Facts Issues and Contentions, dated 23 August 2018 (Exhibit R2); and

    ·Respondent’s hearing certificate (Exhibit R3).

23. The Tribunal has reviewed all of the material before it and is satisfied that all relevant evidence was before it, and that both parties were provided an opportunity to address the evidence, either orally or in writing. Relevant aspects of the evidence and material before the Tribunal will be analysed and referred to below.

24. The Secretary makes the following contentions (R2):

    4.7The Secretary submits that there is no discretion to extend the time to lodge a lump sum claim for FTB past the end of the second income year after the relevant income year. The Secretary relies on the decision of VQSL and Secretary, Department of Social Services (Social services second review) [2017] AATA 294 where Member Brigadier AG Warner found the Applicant had no reasonable prospects of success and stated as follows:

    [26] … Subsection 10(2A) of the FAA Act is unequivocal that the Secretary may only exercise the special circumstances discretion for a twelve month period, that is from the beginning of the second year after the end of the relevant financial year to the end of that second year. The Tribunal, standing in the shoes of the Secretary, is similarly constrained. Accordingly, there is no provision by which the lodgement period can be extended on account of special circumstances, regardless of how compelling those circumstances might be.

    …

    [30] However, there is no discretion that can be enlivened in the circumstances prevailing in this matter.

    …

    [32] Subsection 10(2A) of the FAA Act makes it clear that the Secretary may only exercise the special circumstances discretion from the beginning of the second year after the end of the relevant financial year to the end of that second year. The Tribunal is satisfied that VQSL lodged her 2012/13 FTB claim after the end of the second year and accordingly the discretion cannot be exercised. The Tribunal concludes that VQSL’s substantive application should be dismissed pursuant to

    
    

    s 42B of the AAT Act as the application has no reasonable prospects of success.

    4.8The Secretary also notes the case of Tanoski and Secretary, Department of Social Services (Social services second review) [2016] AATA 353 where Member McCallum stated:

    14.           However subsection 10(2A) of the FAA Act makes it clear that the Secretary may only exercise the special circumstances discretion for a twelve month period, that is from the beginning of the second year after the end of the relevant financial year to the end of that second year.

    15.           For example, where an applicant failed to apply for FTB for the 2012- 2013 financial year by 30 June 2014, the Secretary may only exercise the special circumstances discretion for the one year period from 1 July 2014 to 30 June 2015.

    4.9The effect of subsection 10(2) of the Administration Act is that if the Applicant lodged her claims as follows:

    (a)In relation to the FTB claim for the 2012/2013 period, if the Applicant had lodged her claim after 30 June 2014 (but before 30 June 2015 as permitted by subsection 10(2A));

    (b)In relation to the FTB claim for the 2013/2014 period, if the Applicant had lodged her claim after 30 June 2015 (but before 30 June 2016 as permitted by subsection 10(2A)); and

    (c)In relation to the FTB claim for the 2014/2015 period, if the Applicant had lodged her claim after 30 June 2016 (but before 30 June 2017 as permitted by subsection 10(2A)).

    then FTB will only be payable where the Tribunal is satisfied that there are special circumstances that prevented the Applicant from making the claim before 30 June 2014, 30 June 2015, and 30 June 2016 respectively.

    4.10Section 13 of the Administration Act requires the Secretary to determine an effective claim and if a claim is not effective, it is taken not to have been made (T3/15).

    4.11It is not in contention that the Applicant’s claim was lodged on 17 July 2017. The Secretary relies on the ARO notes which relevantly state as follows:

    I advised [the Applicant] that the information on her record indicates that these claims were not lodged with the department until July 2017. She replied that this is correct. I advised that the date they were received was 17 July 2017 and [the Applicant] advised that this would be correct as she posted the claim forms (T11/226).

    4.12Given that the date of lodgement of the claims occurred after the first income year of the relevant income year, as outlined at 3.11, the Secretary submits the claim for lump sum payment of FTB for the past financial years 2012/2013, 2013/2014, and 2014/2015 is not effective and taken not to have been made.

    Special circumstances

    4.13For the reasons outlined above, the Secretary submits the discretion in subparagraph 10(2)(b)(ii) cannot be exercised.

25. The Applicant submitted (A1):

    I refer to the above case, and submit the following:

    •Top up payment made for the 2011/2012 and 2012/2013 years, but not later years. Top up received despite letter advising otherwise (see attached document ‘AAT 1’)

    •I had no control over my (now ex) partner’s refusal to lodge tax returns, which he only did after over $20,000 in fines were imposed by the ATO.

    •I notified Centrelink on multiple occasions that I was not required to lodge a tax return.

    •[OMMITTED]

    •I could have made the cut-off date for 2014-2015 year if advised cut off was looming.

    •Application posted in June 2017, but could have been lodged at Centrelink office. I was told it had to be posted back, but later advised it could have been lodged at any office.

    •Letters from Centrelink stated not eligible for payments UNTIL returns lodged, not that it wouldn’t be able to be back paid as per previous years. Also states will no longer receive FTB on a fortnightly basis (indicating lump sum back pay upon reconciliation of tax returns).

    •I was only advised in June 2017 that a lump sum claim was required, as previous years had been back paid automatically on lodgement of (now ex) partner’s tax returns as I was already registered for FTB.

    •Aware the ‘bonus’ supplementary payments were forfeited, but unaware the FTB would not be back paid.

    •I did everything within my power, and kept Centrelink informed of my situation throughout.

    •I could not be expected to know a lump sum claim was required, and only became aware incidentally during a conversation with a CSO at Centrelink in June 2017 (regarding this back payment case) that the deadline was looming for the 2015/2016 claim period, and was required to do an online claim. He then walked me through the process over the phone while I lodged the claim online.

    •It is evident that I have since complied and lodged required claims and submitted information required by the due date. This is due to not having to rely on ex partner’s decisions and being aware of the new deadlines.

    •Lump sum claim forms (which I was told weren’t obtainable from a Centrelink office) were posted out on 8th June, received 19th June 2017. Signed and returned 23rd June 2017, before cut-off date of 30th June.

    •All letters request fine print on the back of the letters to be read. This is open to interpretation, and during numerous calls was advised that I was correct in believing it would be back paid once the tax returns were lodged. Likewise, the letter advising the ARO’s decision also stated no payments ‘until tax returns are lodged’.

    •At the time the fortnightly payments were cancelled in 2012, the policy was to back pay automatically once tax returns were lodged.

    •Records held by the department clearly show extensive contact to Centrelink in late May/early June seeking a review. There were numerous opportunities for CSO’s to explain procedure.

26. At the hearing, the Respondent opened by relying on its Statement of Facts, Issues and Contentions (R1). The Respondent outlined reasons why the application could not be considered in the context of special circumstances as it had been filed outside the prescribed time set out in subsection 10(2A) of the Administration Act. In this case, the application was received by the Department after “the end of the second income year after the relevant income year”.

27. The Tribunal is constrained to enliven any discretion as a result of the Applicant’s failure to file her claim for an annual lump sum payment of FTB within the prescribed time.

    CONSIDERATION

28. The Tribunal notes at the AAT1 hearing, the Applicant stated (T2, 8):

    … that her partner had not been able to lodge his tax returns on time because their financial circumstances meant that they could not afford the cost of an accountant. She said that she was in contact with the Department about this and was told that she could lodge claims for FTB when the tax returns were eventually lodged. She said that she was never told about any deadlines.

29. The Tribunal notes that the Applicant received the following written advice from the Department dated 18 April 2012 (T5, 44):

    To receive all your future entitlements you must respond to this letter by 30 June 2011. … According to our records you and/or your partner have not lodged a tax return for the 2010-2011 financial year.

30. The Tribunal notes that the Applicant received written advice from the Department dated 15 April 2013 which stated “[a]ccording to our records you and/or your partner have not lodged a tax return for the 2011-2012 financial year” (T7, 48).

31. The Tribunal notes that the Applicant received written advice from the Department dated 11 May 2012 which stated the following (T6, 46):

    I invite you to update your family income estimate for the 2012-2013 financial year. … Our records show your fortnightly Family Tax Benefit payments have stopped as you and/or your partner (if you have one) have an outstanding non lodger debt due to not lodging tax returns …

32. The Tribunal notes from the ARO’s records that the Applicant confirmed that her lump sum claims were filed with the Department in July 2017 (T11, 226). According to the ARO, the Applicant said that she had posted the claim forms and they were posted to Canberra in a reply paid envelope (T11, 226).

1. The ARO further states that (T11, 226):

   [the Applicant] advised that during these years they were entitled to receive FTB, however they didn’t have funds to lodge their income tax returns and due to this their FTB was stopped which made things even more difficult financially.

2. The ARO also stated the following (T11, 226-227):

   [The Applicant] asked why she could not receive FTB for 2014/15. I advised that an extension can only be granted op (sic) to 30 June 2017 for this claim and hers was received after this. [The Applicant] advised that no one told her that her 2014/15 FTB claim needed to be in by 30 June 2017. Furthermore that if they had she would not have posted the claims and would have lodged them in the office.

3. Whilst the Tribunal notes that applicants are advised when to claim, it has found no oral evidence in discussions with the Applicant to indicate that the Department advised her that she needed to lodge her lump sum claims by the 30 June 2017 (T8, 164). This may have occurred but it is not recorded. The Tribunal notes that on 7 June 2017 the Applicant contacted the Department in order to discuss her situation (T14, 248). As a result of this contact, claim forms were sent to the Applicant for FTB lump sum payments for previous years (T15, 248).

4. The Tribunal finds under subsection 10(2A) of the Administration Act that the claimant is confined to an ongoing entitlement to the payment of FTB entitlements in respect of a particular period that, unless it would be unjust or unfair (i.e. there are “special circumstances”), does not extend beyond the year following the income year to which they relate. If there are special circumstances, the payment of entitlements in respect of a particular income year will not extend beyond a point ending two income years after the income year. The Tribunal understands that in broader budgetary terms, this means that the Commonwealth knows with certainty the level of its liability at a time more closely related to the income year in which that liability was incurred (Deputy President Forgie in Secretary, Department of Social Services and Smith [2017] AATA 699 at [73]).

5. In this case, the lump sum claims were received by the Department on 17 July 2017, which is after the prescribed time. For the claims for the lump sum payment of FTB to have been effective:

   ·for the 2012/13 financial year, the Applicant must have filed her claim by no later than 30 June 2014;

   ·for the 2013/14 financial year, the Applicant must have filed her claim by no later than 30 June 2015; and

   ·for the 2014/15 financial year, the Applicant must have filed her claim by no later than 30 June 2016.

6. If the Tribunal were to find that special circumstances do exist pursuant to subsection 10(2A) of the Administration Act:

   ·for the 2012/13 financial year, the Applicant must have filed her claim by no later than 30 June 2015;

   ·for the 2013/14 financial year, the Applicant must have filed her claim by no later than 30 June 2016; and

   ·for the 2014/15 financial year, the Applicant must have filed her claim by no later than 30 June 2017.

7. Therefore, as the Department received the claims for the 2012/13, 2013/14 and 2014/15 financial years on 17 July 2017, even if the Tribunal could find that there were special circumstance, the claims were filed out of time for the extended time periods that could be allowed in cases of special circumstances. The Tribunal will not consider whether there were special circumstances which prevented the Applicant from lodging her claims before the extended time.

8. In conclusion, the Applicant is not entitled to a lump sum payment of FTB for the past periods under review as the claims were made after the prescribed periods and were not effective claims for the purposes of section 13 of the Administration Act.

   DECISION

9. The Tribunal affirms the decision of the AAT1.

I certify that the preceding 41 (forty -one) paragraphs are a true copy of the reasons for the decision herein of Member C Edwardes

.....[sgd]...................................................................

Associate

Dated: 30 November 2018

Date of hearing:	8 November 2018
Applicant:	In person
Representative for the Respondent:	Daphne Jones-Bolla
Solicitors for the Respondent:	Sparke Helmore