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

[2015] AATA 908

Morris and Secretary, Department of Social Services (Social services second review) [2015] AATA 908 (15 October 2015)

Division	GENERAL DIVISION
File Number	2015/0663
Re	Maree Morris
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Senior Member R W Dunne
Date	15 October 2015
Date of written reasons	26 November 2015
Place	Adelaide

The decision under review is set aside and substituted with a decision that the applicant can now be paid Family Tax Benefit for the 2012/2013 financial year.

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Senior Member R W Dunne

CATCHWORDS

SOCIAL SECURITY – pensions, benefits and allowances – Family Tax Benefit – online lump sum claim for Family Tax Benefit – claim lodged out of time – whether Tribunal has discretion to allow claim out of time – whether "special circumstances" existed – decision under review set aside.

LEGISLATION

A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) ss 5(1), 7(1) and (2), 10(2) and (2A)

CASES

Beadle and Director-General of Social Security (1984) 6 ALD 1

Angelakos and Secretary, Department of Employment and Workplace Relations [2007] FCA 25

Hoffmann and Secretary, Department of Social Services (Unreported).

REASONS FOR DECISION

Senior Member R W Dunne

26 November 2015

INTRODUCTION

1. The applicant, Maree Morris, has requested written reasons for my decision which I delivered orally at the conclusion of the hearing of this matter.  The following is an edited version of my reasons.  However, in order to put my conclusion and findings in context, I will now supplement my oral reasons by referring to certain background facts that were not in contention, and to the relevant legislative scheme. 

2. In making her request for written reasons the applicant asked that, if published, the decision be published without her name appearing in it. However, I note that under s 35(3) of the Administrative Appeals Tribunal Act 1975 (“Act”), in hearings before the Tribunal it is desirable that evidence given before it should be made available to the public and there must be good reasons why publication or disclosure of the evidence should be prohibited or restricted.  In my view, there are no good reasons in the present case and accordingly the applicant’s request is refused.

3. For the 2010/2011 financial year and the 2011/2012 financial year the applicant made an online lump sum claim for Family Tax Benefit (“FTB”) and her entitlements were determined on 18 July 2012 (in relation to the 2010/2011 year) and on 14 May 2013 (in relation to the 2011/2012 year).  In the May 2013 Federal Budget, changes were announced to the FTB.  From the 2012/2013 year onwards, families had only one year instead of two years to submit a lump sum claim for FTB.  This meant that a claim for the 2012/2013 financial year had to be submitted by 30 June 2014. 

4. When the applicant was advised by the respondent that her claim for FTB was out of time and that advice was affirmed by an Authorised Review Officer of the respondent and again at the Social Security Appeals Tribunal (“SSAT”), the applicant applied to this Tribunal for a full review of the decision of the SSAT.

5. At the hearing before me, Ms Morris represented herself and the respondent was represented by Mr A Hay (from the Program Litigation and Review Branch, Department of Human Services).  I admitted into evidence the T documents,[1] pursuant to s 37 of the Act.

   [1] Exhibit R1.

   ISSUE FOR THE TRIBUNAL

6. The issue for the Tribunal in this case is whether the applicant can now be paid Family Tax Benefit for the 2012/2013 financial year.

   LEGISLATION

7. The legislation that is presently relevant is found within what is often referred to as the family assistance law, in particular, the A New Tax System (Family Assistance)(Administration) Act 1999 (Cth) (“Administration Act”).  Subdivision A of Division 1 of Part 3 of the Administration Act deals with the making of FTB claims.  Under s 5 of the Administration Act, which is part of Subdivision A, the only way that a person can become entitled to be paid FTB is to make a claim in accordance with the Subdivision.  Section 7 of the Administration Act explains that an individual may make a claim:

   (a)for payment of FTB by instalment; or

   (b)for payment of FTB for a past period. (The reference to “past period” means a prior period in respect of which a person is entitled to make a claim for FTB.)

8. Section 10 of the Administration Act (which is also part of Subdivision A) contains restrictions on claims for payment of FTB for a past period.  Section 10 relevantly reads:

   “10  Restrictions on claims for payment of family tax benefit for a past period

   …

   (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.

   …”

   BACKGROUND

9. The applicant has three children.  She was claiming FTB for the two younger children in the 2012/2013 financial year.  She was required, pursuant to Subparagraph 10(2)(b)(i) of the Administration Act to lodge her claim by 30 June 2014.  She had been advised by her accountant that the respondent would contact her when she lodged her taxation return to pay her entitlements and/or to request additional information for her claim to be completed.  Her accountant lodged her 2012/2013 tax return on 12 May 2014 and received her assessment notice on 22 May 2014.  She emailed her accountant on 3 July 2014 to enquire about her FTB payment(s).  They contacted the respondent on 4 July 2014.  She was advised that she was out of time to claim FTB.  Her claim would have had to be lodged by 30 June 2014 to be effective and she was told that now she was not permitted to do this.

   EVIDENCE OF APPLICANT

10. It was Ms Morris’ evidence that she had three children, a 25 year old girl, a 19 year old boy and a 16 year old boy.  She was self-employed and worked with her partner in their business.  She attended to the book work involved in the business.  She did not dispute that she had not made a claim for FTB for the 2012/2013 financial year by 30 June 2014.  However, she said that she was not aware that she needed to lodge a claim as she thought that FTB would be paid automatically once her and her partner’s tax returns were lodged.  She could not remember lodging a lump sum claim for the 2010/2011 and 2011/2012 years, but acknowledged that this appeared to be the case.  In relation to the Centrelink letter dated 14 February 2014 which advised her that she had to lodge a claim for FTB for the 2012/2013 by 30 June 2014, she said that she had probably read the letter, but she was not aware that she had to lodge a claim by 30 June 2014.  She said it was likely that she had received the letter electronically, but it was not apparent that if she did not lodge a claim by 30 June 2014 she would not be able to receive any FTB for the 2012/2013 year. 

11. Ms Morris’ 2012/2013 taxation return had been lodged in May 2014 and it wasn’t until July 2014 that she began to wonder what was happening in relation to her FTB claim.  When she contacted Centrelink she was told that, as she had not made the claim, she would miss out.  She was also told that an electronic letter had been posted to her online account to inform of the new system and to the changes to the way FTB was to be assessed.  Once she had found her log-in details and looked on line, she was unable to find the letter that she had been sent on 14 February 2014.  Centrelink advised her that the electronic mail only remained on the system for 90 days.  Given these circumstances, she thought Centrelink was simply trying to get out of paying her the FTB.

12. In cross-examination by Mr Hay, Ms Morris said that she had probably read the letter that had been sent to her by Centrelink on 14 February 2014.  However, she received letters on different things from different people and she was often unable to read all the detail in them.  She acknowledged that she had made lump sum claims for FTB before and had records of the claims.  However, she believed the material in the letter of 14 February 2014 lacked sufficient notice of such a significant change.  Because of this lack of notice, the material in the letter was confusing and as the change was significant in her view, better notification was required.  In particular, she said she thought there was lack of notice of the significant change in the one year time limit for making FTB claims and the information surrounding the change had been confusing.  The information itself was also confusing because the letter sent to her on 14 February 2014 was well before the time she needed to act on the information contained in it.  A period of four months would have to take place before she had to lodge her claim for the 2012/2013 FTB payment.  Her ignorance had resulted in an expensive oversight, but she believed she was entitled to a fair hearing.  She thought it was appropriate for Centrelink to exercise its discretion to apply the special circumstances exception and it was disappointing that they had not done so.

    CONSIDERATION

    Can the applicant now be paid Family Tax Benefit for the 2012/2013 financial year?

13. The process and the time limits for claiming FTB have changed many times over the years.  FTB has previously been processed through the Australian Taxation Office and through Family Assistance Offices.  The Administration Act is beneficial legislation, providing “a payment that assists with the cost of raising children”.  Originally, in 1999, the time limit to lodge a FTB claim for a past period was one year.  This was amended in 2003 to allow a further 12 months for FTB claimants to lodge a tax return and still be eligible to receive their entitlements.  On 1 July 2013, the time limit was again changed and reduced to 12 months, but the discretion to extend the time limit was re-introduced. 

14. Under subparagraph 10(2)(b)(ii) of the Administration Act, a claim for payment of FTB for a past period is not effective if the period falls wholly within one income year (“relevant income year”), but the claim is made after the end of the relevant income year OR such further period as the Secretary allows, if the Secretary (or this Tribunal standing in the shoes of the Secretary) is satisfied that there are special circumstances that prevented the claimant from making the claim before the end of the relevant income year.  In other words, in relation to the 2012/2013 financial year which is the relevant income year in the present case, a claim for payment of FTB is not effective if it is made after 30 June 2014 unless the Secretary (or this Tribunal on review) allows such a claim because special circumstanced are found to exist.

15. As was pointed out by the respondent in its statement of facts and contentions, the term “special circumstances” is not defined in the Administration Act, nor is it defined in the Social Security Act 1991.  However, it has been extensively considered in decisions of Tribunals and Courts.  In Beadle and Director of Social Security, [2] the Tribunal in that case stated:

    “12 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. …” (Emphasis added)

    [2] (1984) 6 ALD 1.

16. In Angelakos v Secretary, Department of Employment and Workplace Relations,[3] Besanko J referred to the decision of Branson J in Ryde v Secretary, Department of Family and Community Services.[4]  Besanko J said:

    “33 I note her Honour’s reference to the Tribunal in the case before her probably overstating the test.  I also note that the authorities have emphasised time and again the importance of maintaining flexibility in determining what constitutes special circumstances.  The danger is that the test will be overstated if the word ‘exceptional’ is emphasised.  It was not the intention of Parliament to confine the exercise of the discretion to an exceptional case.  There is less risk of overstatement if the words ‘unusual’ or ‘uncommon’ are emphasised.  Those words indicate, correctly in my view, the fact that there must be something that distinguishes the case from the ordinary or usual case.  It may not be easy to postulate the ordinary or usual case other than in quite general terms and, in doing so, close attention must be given to the particular statutory context.”  (Emphasis added)

    [3] [2007] FCA 25.

    [4] [2005] FCA 866.

17. In a recent matter before me (Hoffmann and Secretary, Department of Social Services (Unreported)), the facts there were almost identical to those existing in the present case.In Hoffmann, the applicant was given written notification of the change to the requirement for tax returns to be lodged and for making a claim for payment of FTB after one year instead of two, and this notification was sent via both an SMS message and a paper letter.  She argued that the SMS message and the format used in the letter that was sent to her were inadequate methods of communicating the change in the requirement for making a claim for FTB.  She did not ask to be signed up for SMS messaging from the respondent, but this happened automatically.  She disregarded the message as irrelevant to her, assuming that correspondence from Centrelink would continue in paper form.  The next SMS message that came from Centrelink was likewise received in the midst of a busy day while she was out with her young family.  She closed the message, viewing it as an annoyance.  She argued that the information about the change sent to her in a text message was an inadequate way of communicating such important information.  Standard letters had been sent to her previously since applying for FTB and the manner in which the change had been communicated to her was confusing. 

18. In Hoffmann, the applicant there had appealed the decision of the respondent’s Authorised Review Officer to the SSAT.  The SSAT member reviewed a number of decisions of Tribunals and Courts.  In finding that Ms Hoffmann’s circumstances as described in her decision could not be said to have prevented her from lodging her and her partner’s taxations returns and making a claim for FTB for 2012/2013 by 30 June 2014, she found that those circumstances were not distinguishable from the usual case. The member was not satisfied that there were special circumstances present that prevented Ms Hoffmann and her partner from lodging their income tax returns and making a claim for FTB by 30 June 2014.  In my view and with due respect, the decision of the SSAT in Hoffmann was wrong.  Having regard to the statutory context in which the expression “special circumstances” appears in subparagraph 10(2)(b)(ii) of the Administration Act, in my opinion those circumstances arose in Hoffmann.

19. Given the almost identical facts and circumstances that arose in the present applicant’s case and the statutory context involved, I am satisfied that there are special circumstances that prevented Ms Morris from making a claim for payment of FTB before 30 June 2014. 

    DECISION

20. For the above reasons, the decision under review is set aside and substituted with a decision that the applicant can now be paid Family Tax Benefit for the 2012/2013 financial year. 

I certify that the preceding 20 (twenty) paragraphs are a true copy of the reasons for the decision herein of Senior Member R W Dunne

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Administrative Assistant

Dated 26 November 2015

Date(s) of hearing	15 October 2015
Applicant	In person
Advocate for the Respondent	Mr C Visser
Solicitors for the Respondent	Department of Human Services