O’Donnell and Secretary, Department of Social Services (Social services second review)

[2018] AATA 3700

O’Donnell and Secretary, Department of Social Services (Social services second review) [2018] AATA 3700 (4 October 2018)

Division:GENERAL DIVISION

File Number(s):      2017/1813

Re:Amanda O'Donnell

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Bill Stefaniak AM RFD, Senior Member

Date:4 October 2018

Place:Sydney

The decision made by the Tribunal in its Social Security and Child Support Division on 9 March 2017 is affirmed.

..........................[SGD]..............................................

Bill Stefaniak AM RFD, Senior Member

CATCHWORDS

SOCIAL SECURITY – family tax benefit – lodge income tax return before end of first income year after relevant income year unless special circumstances – whether special circumstances exist – decision affirmed

LEGISLATION

Acts Interpretation Act 1901

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

CASES

Dobson and Secretary Department of Social Services [2015] AATA 892

Nicholson and Secretary Department of Social Services [2016] AATA 630
Secretary Department of Social Services and Cannon [2015] AATA 1028

Secretary Department of Social Services and Hollis [2015] AATA 941

REASONS FOR DECISION

Bill Stefaniak AM RFD, Senior Member

4 October 2018

BACKGROUND

1. On 29 November 2016 the Department of Social Services (the Department) rejected the Applicant’s claim for a lump sum family tax benefit (FTB) for the 2013/14 financial year. The Applicant then sought a review of that decision by an authorised review officer which was unsuccessful, as was her initial appeal to the AAT1 on 9 March 2017. She now appeals to this Tribunal.

2. The Applicant lodged a claim for FTB for the 2013/2014 financial year on 5 November 2015. This was rejected by Centrelink on the basis that it was made after 30 June 2015 and there were no special circumstances that applied in this case to justify a late lodgement during the 2015/16 financial year (see s 10(2) of the A New Tax System (Family Assistance) (Administration) Act 1999 (the Administration Act)).

3. The Applicant’s case can be summarised as follows:

   (a)The Applicant did not get the letter advising of the change of the time to lodge a FBT return from two years to one year. The letter notifying her of that change was sent out to her known address on 17 March 2014[1]; and

   (b)It  was unfair for the Applicant to be penalised as she and her family were “lifters not leaners”, paid their taxes, obeyed the laws of the land, contributed to their community and only claimed FBT from the system.

   [1] T-Documents, p 15.

4. The Applicant also submitted that there was no time limit on the Department in terms of chasing up monies owed by a taxpayer and thus it was unfair to change the rules for taxpayers by restricting the time for FBT claims from two years to one year.

5. To succeed in this matter the Applicant must show that there are special circumstances in her case and that those circumstances prevented her from lodging her FBT application on or before 30 June 2015.

   EVIDENCE

6. Both the Applicant and her husband gave evidence before the Tribunal. The Applicant’s husband, Mr O’Donnell, agreed with his wife’s evidence and told the Tribunal that they lived by the principal that one should “Do the right thing even though nobody is looking”.

7. He also added that his wife’s back injury problems, which were causing her a lot of pain and grief for approximately four to five months from mid-2015 up until late-2015, might qualify for special circumstances.

8. The Applicant told the Tribunal that she had two children and had been claiming FBT from the 2007/2008 financial year onwards.

9. It was the Applicant’s evidence that she and her husband would put their tax returns in late because their accountant did not have to get them in until early June after the tax year. The Applicant would always make sure the FBT claim was lodged usually within about two weeks of her Tax return being lodged.

10. The Applicant further stated that on two occasions she had lodged two FBT’s together,  once when her son was born, for the 2007/8 and 2008/9 financial years, and again on this occasion for the 2013/4 and 2014/15 financial year.

11. The Applicant added that prior to this occasion her accountant would lodge the return, but because of issues involving the accountant (who, it seems had only recently returned to work after having a baby and who the Applicant was having other issues with), she did the 2013/4 and 2014/5 financial year tax returns herself.

12. The Applicant and her husband had moved on 1 May 2014 to a suburb nearby, but this was after the letter advising of the change of law was sent to her old address. At any rate, the Applicant and her husband did not fully vacate the old residence until August 2014, at which point the O’Donnell’s advised Medicare and the Department of their move.

13. The Applicant told the Tribunal that on a few occasions whilst living at their old residence they would get mail addressed to other people and vice versa. After moving to their new residence this occurred more frequently.

14. In both suburbs people would bring around to each other mail that had been incorrectly delivered.

15. The Applicant also said that she had searched her files thoroughly to make sure she had not misplaced the letter of 17 March 2014.

16. The Applicant confirmed that her accountant had not advised her of the change of law which the Department had first put on its website on 26 September 2013.

17. The Applicant also said that had she been feeling better in 2015 and not suffering from her health issues she “more than likely would have done it earlier”.

18. The Applicant maintained that despite her problems had she known about the change of law she would have lodged her claim on time. She told the Tribunal “…If I had known I would have had it in – I’d have it all sorted”.

19. The Applicant went to say that initially she also thought the accountant had completed the return and filed it because some extra money appeared in her bank account. However this tuned out to be a payment made by the accountant by mistake.

20. That year her tax return also went in late. The Applicant stated that it was lodged in late June or early July. Once she received her tax notification she filed her return within two weeks.

    ARE THERE SPECIAL CIRCUMSTANCES IN THIS CASE?

21. The Tribunal accepts the evidence of the Applicant and her husband. They both impressed the Tribunal as witnesses of truth, of good character and indeed as exemplary citizens.

22. Prior to the hearing ending, the Tribunal advised the Applicant of the Tribunal’s preliminary view on the matter, but advised that the Tribunal would adjourn the matter to consider if there was anything else of relevance (by way of case law or other material) that may indicate that special circumstances existed in this case.

23. I will firstly deal with the Applicant’s second point – that the new rules are “unfair”. Unfortunately the law is clear, even if one rule applies to FBT claimants and another rule applies to the Respondent Department when collecting debts. The rules reflect the intent of the legislature (the Federal Parliament).

24. Unfairness or a perceived unfairness in the law is not a special circumstance and cannot be taken into account. As the Tribunal indicated to the Applicant and her husband at the hearing, the question of unfairness of a law is a matter for the legislature not the courts and/or Tribunal.

25. The Applicant’s primary argument was that because she did not receive the notice, she could not know she only had one year to file her FTB return and that this amounted to a special circumstance.

26. I do not need to comment further on her health issues as she said herself, whilst they were problematic, had she known about the law change she would have lodged her FTB return on time despite her health problems.

27. I accept that the Applicant appears not to have physically received the letter of 17 March 2014. Even if it arrived in her mailbox, she certainly did not receive it.

28. I am also satisfied that it appears to have been posted to her then current address. Whether it was delivered to the wrong address, stolen from the mail box (which sometimes occurs), or whether another member of the household may have collected the mail and/or misplaced it or accidently thrown it out with other items, there is no evidence before the Tribunal to determine why she did not receive it.

29. The Respondent is correct in stating that a letter posted to the last known address of a person is deemed to have been delivered. Sections 28A and 29 of the Acts Interpretation Act 1901 (Cth) provide that a document is ‘served’, ‘given’ or ‘sent’ to a person if it is sent by pre-paid post to the address last known to the sender of the document (see: Nicholson and Secretary Department of Social Services [2016] AATA 630).

30. The Respondent is under no obligation to send such a letter or notify claimants of changes to the law (see: Nicholson and Secretary Department of Social Services [2016] AATA 630 and Dobson and Secretary Department of Social Services [2015] AATA 892).

31. The Department, to its credit, does send out letters to notify people of changes to the law that may affect them, but it is under no legal obligation to do so (see also: Secretary Department of Social Services and Cannon [2015] AATA 1028 at [17] and Secretary Department of Social Services and Hollis [2015] AATA 941 at [43]). The Department additionally identifies changes to the law on its website (in this instance, on 26 September 2013).

32. Accordingly, the fact that the Applicant did not receive the letter of 17 March 2014 does not assist her application before the Tribunal.

    OTHER MATTERS

33. The question arises in this case, as it did in Nicholson and also in Cannon, as to whether the accountant had a duty to keep their clients informed of changes to the law.

34. In Cannon, Deputy President Constance suggested that the Applicant’s remedy may be against her accountant rather than the public purse. It is open to the Applicant and her husband to investigate this avenue further should they wish to do so.

35. The law is clear (see the above mentioned cases) that a taxpayer cannot rely on blaming an accountant for not lodging forms on time or not telling the taxpayer of changes to the law in an attempt to claim special circumstances. Unfortunately these types of issues arise not infrequently.

36. It is up to the taxpayer to remind his/her accountant to lodge tax returns on time. The taxpayer may well have a civil remedy against the accountant should the accountant have been negligent or neglectful of his/her duty to the client in any way.

    CONCLUSION

37. On a positive note, the Applicant is now well aware of the changes to the law and the Tribunal is confident this will not occur again. It seems to have only occurred in the first place because of the Applicant’s health and other issues, including the late lodgement by the accountant of the Applicant’s income tax return for the 2013/4 financial year.

38. In every other year (except the 2007/8 and 2008/9 financial years when the FBT forms were not lodged until into the second year) the FBT forms have been lodged towards the end of the first year after the end of the financial year, and were thus well in time under the previous and current legislation.

39. For the reasons given above, the 2013/4 financial year FBT forms cannot be said to have been prevented from being lodged because the circumstances that caused this to occur were exceptional. They were unfortunate, but by no means exceptional, nor were they particularly uncommon when considering similar cases such as Nicholson and Cannon.

40. Accordingly, the decision of the AAT1 of 9 March 2017 is affirmed.

I certify that the preceding 40 (forty) paragraphs are a true copy of the reasons for the decision herein of Bill Stefaniak AM RFD, Senior Member.

.............................[SGD]...........................................

Associate

Dated: 4 October 2018

Date(s) of hearing:	7 June 2018
Advocate for the Applicant:	Mr S O'Donnell
Solicitors for the Respondent:	B Salaji - Department of Human Services