Lyall and Secretary, Department of Social Services (Social services second review)
[2024] AATA 332
•4 March 2024
Lyall and Secretary, Department of Social Services (Social services second review) [2024] AATA 332 (4 March 2024)
ReviewNumber: 2023/3782, 2023/3783
Division:GENERAL DIVISION
File Number(s): 2023/3782, 2023/3783
Re:Amii Skye Lyall
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
DECISION
Tribunal:Senior Member Hon J Rau SC
Date:4 March 2024
Place:Adelaide
The decisions under review are affirmed.
...........................[sgnd].........................................
Senior Member Hon J Rau SC
CATCHWORDS
Social security – recovery of overpayment – recoverable debt – absence of financial hardship – write off of debt – waiver of debt – waiver for special circumstances – waiver for sole administrative error – reimbursement – good faith – the decisions under review are affirmed.
CASES
Secretary, Department of Social Security v Coralie Hales (1998) 82 FCR 154
Re Gerhardt and Department of Employment, Education and Training [1996] AAT 10941
Secretary, Department of Family & Community Services v Sekhon [2003] FCA 76
Barnes and Secretary, Department of Social Services [2014] AATA 786
Secretary, Department of Education, Employment, Training and Youth Affairs v Barry Prince [1997] FCA 1565
Haggerty v Department of Education Training and Youth Affairs [2000] FCA 1287
Panacci and Secretary, Department of Employment and Workplace Relations [2008] AATA 30
Feneley and Secretary, Department of Family and Community Services [2003] AATA 496
Phillips and Secretary, Department of Social Services [2021] AATA 3560
Secretary, Department of Social Services and Waqar [2020] AATA 1493
Beadle and Director-General of Social Security (1984) 6 ALD 1
Davy and Secretary Department of Employment and Workplace Relations [2007] AATA 1114.
Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435.
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25
LEGISLATION
A New Tax System (Family Assistance) (Administration) Act 1999 (Cth)
A New Tax System (Family Assistance) Act 1999 (Cth)
Social Security Act 1991 (Cth)
REASONS FOR DECISION
Senior Member Hon J Rau SC
4 March 2024
BACKGROUND
The decisions under review are:
1) the decision made by the Administrative Appeals Tribunal (Social Services and Child Support Division) (AAT1) on 26 April 2023 to affirm the decision made by an Authorised Review Officer (ARO) of Services Australia (the Agency) on 20 September 2022 to recover a Family Tax Benefit (FTB) debt of $288.34 for the period 12 July 2004 to 16 August 2004 (debt reference 53353888); and
2) the decision made by the AAT1 on 3 May 2023 to affirm the decisions made by an ARO dated 21 September 2022 to recover FTB debts of:
1) $1,215.19 for the 2018/19 income year (debt reference C6399760); and
2) $3,351.31 for the 2019/20 income year (debt reference C6433709).
ISSUE
The issues to be decided in this application are whether:
1) Ms Lyall has been overpaid FTB in the amounts of:
1) $288.34 for the period 12 July 2004 to 16 August 2004 (the 2004 debt);
2) $1,215.19 for the 2018/19 income year (the 2018/19 debt); and
3) $3,351.31 for the 2019/20 income year (the 2019/20 debt); and
2) if so, does each overpayment constitute a debt to the Commonwealth; and
3) if so, whether there is any reason that the debts ought not to be recovered.
THE HEARING
Ms Lyall was self-represented. The Secretary, Department of Social Services was represented by Mr Riley Calaby from Services Australia. The hearing was conducted in person.
In this decision, the section 37 documents relating to the 2004 debt are referred to as exhibit 3 and those relating to the 2018/19 and 2019/20 debts are referred to as exhibit 4. Supplementary T-documents are referred to as exhibit 7.
FACTS
The 2004 debt
Ms Lyall received FTB during the 2004/2005 income year, including Rent Assistance as a component of FTB.
Effective from 1 April 2003, Centrelink (now Services Australia – the Agency) recorded Ms Lyall’s address as [address], Woodcroft SA.[1]
[1] Exhibit 3, T-Documents for 2004 application, 144.
From 21 January 2004, the Agency recorded Ms Lyall as paying rent of $150/week at that address[2]. This was based on advice from Ms Lyall.[3]
[2] Ibid 147.
[3] Exhibit 7, Supplementary T-Documents, 61.
Ms Lyall was sent notices pursuant to section 25A of the FA Admin Act reminding her of her obligations under section 25 of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (“the FA Admin Act”) to advise of any changes or likely changes that would reduce her daily rate of FTB.[4]
[4] Ibid 132-4. For example, on 7 July 2003, Ms Lyall was sent a notice informing her that she must tell the Agency if she ‘stop[ped] paying rent or the amount you pay changes’ or if she were to ‘change address’.
Subsequent notices in the same terms were sent to Ms Lyall.[5]
[5] 8 September 2023 (exhibit 7, 135-7); 13 November 2003 (exhibit 7, 142-4); 24 November 2003 (exhibit 7, 147-9); 23 January 2004 (exhibit 7, 154-6); 20 May 2004 (exhibit 7, 160-2) and 24 May 2004 (exhibit 7, 163-5).
In her evidence, Ms Lyall agreed that on 12 July 2004, she moved from her Woodcroft address. She agreed that she made no rental assistance claim in respect of her next address. She agreed that she knew that she was no longer entitled to rent assistance as from that date. She agreed that she knew that it was incumbent upon her to notify the agency of this change in her circumstances.
It follows therefore, that she essentially accepts that she was overpaid rent allowance for the period from 12 July to 16 August 2004.
Her issues relate to the method of calculation of the overpaid sum, and her requested waiver of the debt.
As to the first of these, Ms Lyall was unable to satisfy the Tribunal that there was an error in the method of calculation, or that an alternate method was appropriate.
I note that this debt was paid some time ago.
The question here, is one of reimbursement of a recovered overpayment, to which she was never entitled.
Ms Lyall told the Tribunal that she recalled telephoning the Agency to advise them of her changed circumstances on or about 24 July 2004. She was unable to recall any other details regarding this call.
The Agency has no record of any such call being received. Ms Lyall suggested that there must, therefore, have been an “administrative error” on the part of the Agency.
It was put to Ms Lyall that she may be mistaken about the timing of this call.
She agreed that she has made many such calls over the almost two decades since then. In particular, it was suggested that there is a record of a call having been made on 1 December 2004.[6] It was suggested that this may have been the call that she was thinking of. She was adamant that it was not.
[6] Exhibit 3, T-Documents for 2004 application, 15, 17.
In support of her claim she pointed to the fact that the rental assistance did in fact stop on 16 August 2004, not 1 December 2004, when the Agency records logged her call.
The difficulty with this submission is that it does not explain or accord with the delay between 24 July 2004, when she says that she called the Agency, and 16 August 2004, when the payments stopped.
There is a more logical explanation available, based on the documentary evidence.
On 17 August 2004, the Agency sent Ms Lyall a notice stating: “we cannot continue paying you Rent Assistance because we do not have proof of your rent payments, such as a current lease agreement or a rent certificate signed by your landlord”.[7]
[7] Exhibit 7, Supplementary T-Documents, 174.
This letter corresponds in time with the termination of payments.
I am persuaded, based on the documentary evidence before the Tribunal, that the termination was based on Ms Lyall’s failure to provide evidence in support of an ongoing claim, not on her notification of a change in her circumstances. In other words, the termination was initiated by the Agency, not Ms Lyall.
I have formed the view that Ms Lyall is mistaken in her recollection that she contacted the Agency on or about 24 July 2004 to advise of her change of residence.
For these reasons, I do not accept that the evidence supports Ms Lyall’s claim that there was an administrative error.
On 1 December 2004, Ms Lyall telephoned the Agency to advise that she had changed address to [address], Woodleigh Gardens NT effective from 12 July 2004. A file note records that ‘Rent Verification HAS been requested’ but because ‘rent paid NVE [non-verified]’ a debt was raised of $288.36 for the period 12 July 2004 to 16 August 2004.[8]
[8] Exhibit 7, Supplementary T-Documents, 77.
Ms Lyall told the AAT1 that she had never provided verification of the Woodleigh Gardens rent to the Agency.[9]
[9] Exhibit 3, T-Documents for 2004 application, 6 at [7].
On 3 December 2004, the Agency decided to raise and recover a debt of $288.36 in respect of Rent Assistance Ms Lyall had received during the period 12 July 2004 to 16 August 2004.[10] Ms Lyall was notified of this decision by way of letter of the same date.[11]
[10] Ibid 150; Exhibit 7 Supplementary T-Documents, 77-8.
[11] Exhibit 3, T-Documents for 2004 application, 177.
On 31 January 2006, the Agency reduced the quantum of debt by 2 cents to $288.34.[12]
[12] Ibid 173.
A file note made on that day records that Ms Lyall had recently repaid a final instalment of $3.45 towards the debt, however an outstanding balance of 2 cents remained, so the officer had accordingly adjusted the debt amount down by 2 cents so that there would be no unpaid debt preventing Ms Lyall from applying for an advance payment of FTB.[13]
[13] Exhibit 7, Supplementary T-Documents, 100.
On 12 September 2022, Ms Lyall applied for internal review of the decision to raise and recover the 2004 debt.[14]
[14] Exhibit 3, T-Documents for 2004 application, 153.
On 20 September 2022, an ARO reviewed and affirmed the decision to raise and recover the 2004 debt.[15]
[15] Exhibit 3, T-Documents for 2004 application, 15-9.
On 10 October 2022, Ms Lyall applied for AAT1 review of the ARO decision of 20 September 2022.[16]
[16] Ibid 9-14.
On 26 April 2023, AAT Member Juhasz affirmed the decision to raise and recover the 2004 debt.[17]
[17] Ibid 5-8.
On 31 May 2023, Ms Lyall applied to this Tribunal for further review of the decision of the AAT1.[18]
The 2018/19 and 2019/20 debts
[18] Ibid 1-4.
Ms Lyall received FTB during the 2018-2019 and 2019-2020 income years for her children Child A, Child B, Child C and Child D.[19]
[19] Exhibit 4, T-Docs for 2018-2020 application, 591, 176, 911.
This was paid on the basis that Ms Lyall was a single person in receipt of an income support payment. Her rate of FTB was not reduced on account of her income.
Before and during the relevant periods, Ms Lyall was sent notices pursuant to section 25A of the FA Admin Act setting out her obligation under section 25 of the FA Admin Act to advise of any changes or likely changes that may reduce her daily rate of FTB.[20]
[20] For example, on 5 June 2018 (Exhibit 4 at page 911–913), Ms Lyall was sent a notice setting out that her regular payment was being paid for Child A, Child B, Child C., Child D. with a care percentage of 100% (Exhibit 4 at page 911) and that Ms Lyall must tell the Agency if a child for whom she is receiving FTB stops living with her or the level of shared care she provides for the child changes (Exhibit 4 at page 913).
Subsequent notices confirmed that Ms Lyall was being paid on the basis that she had 100% care of Child B (as well as the applicable care percentages for her other children for whom she was being paid FTB from time to time). Those notices also set out that Ms Lyall was obliged to advise if a child for whom she is receiving FTB stops living with her or the level of shared care she provides for the child changes. Notices with the following dates were sent to Ms Lyall:
1)18 June 2018;[21]
[21] Exhibit 4, T-Docs for 2018-2020 application, 918-20.
2)19 June 2018;[22]
[22] Ibid 921-23.
3)23 June 2018;[23]
[23] Ibid 927-9.
4)3 July 2018;[24]
[24] Ibid 936–9.
5)5 July 2018;[25]
[25] Ibid 942-4.
6)17 August 2018;[26]
[26] Ibid 953–5.
7)11 September 2018;[27]
[27] Ibid 964–6.
8)2 October 2018;[28]
[28] Ibid 968–70.
9)29 October 2018;[29]
[29] Ibid 987–9.
10)19 November 2018;[30]
[30] Ibid 992–4.
11)7 January 2019;[31]
[31] Ibid 1002–4.
12)26 February 2019;[32]
[32] Ibid 1008–10.
13)3 March 2019;[33]
[33] Ibid 1011–13.
14)27 March 2019;[34]
[34] Ibid 1034-6.
15)16 April 2019;[35]
[35] Ibid 1052-5.
16)20 April 2019;[36]
[36] Ibid 1055-7.
17)20 June 2019;[37]
[37] Ibid 1071-3.
18)21 June 2019;[38]
19)24 June 2019;[39]
20)19 July 2019;[40]
21)20 July 2019;[41]
22)13 August 2019;[42]
23)5 September 2019;[43]
24)7 September 2019;[44]
25)15 February 2020;[45]
26)14 June 2020;[46] and
27)26 June 2020.[47]
[38] Ibid 1074-6.
[39] Ibid1077-9.
[40] Ibid 377-9.
[41] Ibid 384-6.
[42] Ibid 391-3.
[43] Ibid 403-5.
[44] Ibid 408-10.
[45] Ibid 434-6.
[46] Ibid 452-4.
[47] Ibid 455-7.
On 25 April 2019, Ms Lyall’s son Child B. left her care and commenced to live with his father. From this point onwards, Ms Lyall’s percentage of care for Child B was 0%.
Ms Lyall told the Tribunal that she knew that Child B. had left on 25 April 2019. She knew that she was not entitled to claim FTB for Child B , from that time.
On 5 February 2020, an officer recorded on Ms Lyall’s electronic Centrelink record that Child Support had been advised on 29 January 2020 that Ms Lyall had 100% care of Child B. with effect from 5 January 2020.[48]
[48] Exhibit 7, Supplementary T-Documents, 112.
On 5 February 2020, the Agency also sent Ms Lyall a notice under section 158 of the FA Admin Act, noting that Ms Lyall had advised the Agency that she had 100% care of Child B from 5 January 2020, and requiring her to provide evidence to show that she had Child B . in her care by 19 February 2020.[49]
[49] Exhibit 4, T-Docs for 2018-2020 application, 422-3.
On 16 November 2020, the Child Support Registrar determined that Child B . had not been in the care of Ms Lyall from 25 April 2019 to 4 January 2020 pursuant to section 35T of the A New Tax System (Family Assistance) Act 1999 (Cth) (“the Family Assistance Act”).
On 26 November 2020, the Agency raised debts on the basis that the Applicant was only entitled to the base rate of FTB in respect of Child B . for the period 25 April 2019 to 4 January 2020:
1) $723.40 for the 2018/19 income year;[50] and
2) $2,134.95 for the 2019/20 income year.[51]
[50] Exhibit 7, Supplementary T-Documents, 181-2.
[51] Exhibit 7, Supplementary T-Documents, 177-80.
On 23 December 2020, Ms Lyall applied for internal review of the Child Support Registrar’s determination that Child B . had not been in her care from 25 April 2019, and on 25 March 2021.
A Child Support Objection Officer decided to affirm that determination.[52]
[52] Ibid 132-4.
That decision is not before the Tribunal in the present review. It stands as made.
On 4 August 2022 Ms Lyall applied for internal review of the decisions to raise and recover an FTB debt for the 2018/19 income year and the 2019/20 income year.[53]
[53] Ibid 879, 355.
On 21 September 2022, an ARO reviewed the decision and varied it so that Ms Lyall had a recoverable FTB debt of $1,215.19 for the 2018/19 income year.[54]
[54] Ibid 515.
This was done on the basis that Ms Lyall did not have care of Child B . for the period 25 April 2019 to 4 January 2020 and Ms Lyall therefore had not been entitled to any FTB in respect of Child B . for the period 25 April 2019 to 30 June 2019.[55]
[55] Ibid 17.
On 21 September 2022, the same ARO also reviewed the decision to raise and recover an FTB debt for the 2019/20 income year and decided to vary it so that Ms Lyall had a recoverable FTB debt of $3,351.31 for the 2019/20 income year.[56]
[56] Ibid.
In this matter, the underlying facts are not in dispute. Ms Lyall’s issues relate to the method of calculation of the overpaid sum, and a requested waiver of the debt.
Ms Lyall suggested that a calculation error was made due to the different years[57] used to calculate FBT and Child Support. I am not persuaded that Ms Lyall has a point here. The simple fact is that as from 25 April 2019, Child B . was no longer with her, and her entitlements changed as from that day.
[57] Calendar year v financial year.
Ms Lyall was unable to establish any administrative error on the part of the Agency giving rise to the overpayment.
I note that this debt was paid some time ago.
The practical issue here is one of reimbursement. Reimbursement would involve payment of monies to which Ms Lyall was never entitled.
Whether the debts ought to be recovered
The starting point is summarized in the decision of Secretary, Department of Social Security v Coralie Hales[58] per French J stated at 155, in the context of the Social Security Act 1991 (Cth):
The taxpayer is entitled to expect that in the ordinary course money paid to people which they are not entitled to receive will be recovered, albeit in a way appropriate to the circumstances which led to the overpayment and the circumstances of the persons concerned. However, the confining of a recovery regime by rigid rules, particularly in this area of the law, is likely to be productive of unfair or harsh outcomes in some of the great variety of fact situations that can arise. There are provisions in the Act which recognise that reality. They relate to the writing off and the waiver of debts otherwise due to the Commonwealth.
[58] (1998) 82 FCR 154.
Write off or waiver of debt
The Tribunal must consider whether Ms Lyall’s debt should be either written-off or waived. In so doing the Tribunal is mindful that in this case, the debts have been paid and as such, the issue is actually one of reimbursement. In this case there is no debt owing. There is therefore no scope for a waiver.
Waiver for sole administrative error
Section 97 of the FA Admin Act states:
(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.
In this instance, Ms Lyall has failed to demonstrate any “administrative error” for the reasons set out above.[59]
[59] Re Gerhardt and Department of Employment, Education and Training [1996] AAT 10941; Secretary, Department of Family & Community Services v Sekhon [2003] FCA 76; Barnes and Secretary, Department of Social Services [2014] AATA 786.
Ms Lyall knew in each relevant instance that she was receiving payments to which she was no longer entitled. This does not satisfy the requirement of acting in “good faith”.[60]
[60] Secretary, Department of Education, Employment, Training and Youth Affairs v Barry Prince [1997] FCA 1565; Haggerty v Department of Education Training and Youth Affairs [2000] FCA 1287; Panacci and Secretary, Department of Employment and Workplace Relations [2008] AATA 30; Feneley and Secretary, Department of Family and Community Services [2003] AATA 496; Phillips and Secretary, Department of Social Services [2021] AATA 3560; Secretary, Department of Social Services and Waqar [2020] AATA 1493.
Ms Lyall has already paid the debts raised. Whilst there is no doubt that reimbursement of the disputed funds would be most welcome, she has failed to establish that she “would suffer severe financial hardship” if the debt is not waived.[61]
[61] Feneley and Secretary, Department of Family and Community Services [2003] AATA 496.
Waiver for special circumstances
Section 101 of the FA Admin Act states:
The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a) the debt did not result wholly or partly from the debtor or another person knowingly:
(i)making a false statement or a false representation; or
(ii)failing or omitting to comply with a provision of the family assistance law; and
(b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c) it is more appropriate to waive than to write off the debt or part of the debt.
On the evidence, Ms Lyall knowingly omitted to provide information to the Agency when she knew that it was incumbent upon her to do so.[62]
[62] Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435.
On the evidence, Ms Lyall has failed to show “special circumstances”.[63]
[63] Beadle and Director-General of Social Security (1984) 6 ALD 1; Davy and Secretary Department of Employment and Workplace Relations [2007] AATA 1114.
Ms Lyall’s personal circumstances were recently considered by the Tribunal in relation to other debts in the matter of Lyall and Secretary, Department of Social Services.[64]
[64] [2023] AATA 3356 at [119]–[129].
In that matter, the Tribunal found that the combination of Ms Lyall’s financial difficulties and her care needs justified waiving the outstanding balance of a debt due to special circumstances. This however did not apply to the portion of the debt already paid.
In this case, all of the debts have been paid.
The effect of a waiver in the present case, would be to pay money to Ms Lyall, to which she never had an entitlement.
CONCLUSION
The Tribunal accordingly determines that none of the disputed debt payments should written-off or waived.
DECISION
For the reasons set out above, the decisions under review are affirmed.
I certify that the preceding seventy-four (74) paragraphs are a true copy of the reasons for the decision herein of Senior Member Hon J Rau SC.
..............................[sgnd].....................................
Associate
Dated: 4 March 2024
Date of hearing: 26 February 2024 Advocate for the Applicant:
Self-Represented
Advocate for the Respondent: Riley Calaby
Services AustraliaANNEXURE B – LIST OF EXHIBITS
Exhibit No.
Lodged by
Document
1
Respondent
Statement Of Facts, Issues and Contention
2
Applicant
Statement of ‘2018-20’ Debt Issues and Facts
3
Respondent
T-Docs for 2004 application
4
Respondent
T-Docs for 2018-2020 application
5
Respondent
Letter from the SDSS to A for 2019-2020 application
6
Respondent
Letter from the SDSS to A for 2004 application
7
Respondent
Supplementary T-Docs
8.1
Applicant
Evidence – FTB debt 2004 $288.34
8.2
Applicant
Evidence – FTB debt $723.40
8.3
Applicant
Evidence – FTB debt $ 2134.95
8.4
Applicant
Evidence – FTB debt part A & B
8.5
Applicant
Evidence – Large Family Supplement rates
9
Applicant
Evidence – Documents dated 22 October 2019
10
Applicant
Evidence – Documents – Calculation period 25.10.2018 to 07.11.2018
11
Applicant
· Evidence – Outstanding Child Support ($56238.80)
· Evidence – 29 photos
· Evidence – 24 photos
· Applicant’s statements on issues and facts on 2004 Debt
· Evidence – 6 photos
0
11
0