Popovic and Secretary, Department of Family and Community Services

[2004] AATA 1392

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 1392

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2004/915

GENERAL ADMINISTRATIVE  DIVISION

Re:         VICTORIA POPOVIC  

Applicant

And:SECRETARY,

DEPARTMENT OF FAMILY AND

COMMUNITY SERVICES

Respondent

DECISION

Tribunal:       Regina Perton, Member

Date:             23 December 2004

Place:            Melbourne

Decision:      The Tribunal affirms the decision under review.

(sgd) Regina Perton
  Member

SOCIAL SECURITY – family tax benefit – child commenced employment – notification – ongoing payment – debt to Commonwealth ‑ waiver of debt ‑ write‑off of debt – special circumstances – decision affirmed

A New Tax System (Family Assistance) Act 1999 ss 21, 22, 22A, 71

A New Tax System (Family Assistance)(Administration) Act 1999  ss 91, 97, 101

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

REASONS FOR DECISION

23 December 2004  Regina Perton, Member

1.      This is an application by Victoria Popovic (the applicant) for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 6 July 2004.  The SSAT affirmed a decision of a delegate of the Secretary to the Department of Family and Community Services (the respondent) dated 7 July 2003 that the applicant had been overpaid family tax benefit (FTB) from 1 July 2001 to 30 June 2002 and that she owed $1383.35 to the respondent.

2.      At the hearing on 4 November 2004, the applicant represented herself.  Mr D. Perdon, a Centrelink advocate, represented the respondent.  

3. The Tribunal received into evidence the documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (T1‑T40).   

BACKGROUND

4.      Mrs Popovic is the mother of two children, Ljupka, born on 14 December 1981, and Goran, born on 11 June 1987.  On 6 December 1999, Centrelink wrote to Mrs Popovic advising that her family tax payment for Ljupka has been cancelled because she is now 18.  Ljupka finished her secondary schooling in December 1999 and continued to live at home while on youth allowance.  On 6 December 1999, Mrs Popovic reapplied for, and was granted, ongoing FTB or family tax payment (as it was prior to 1 July 2000) for Ljupka as she was not working and remained dependent on her mother.    

5.      On 18 April 2000, Mrs Popovic and Ljupka went to the Centrelink office to advise that Ljupka had obtained full‑time work, commencing on 20 April 2000.  Centrelink wrote to Ljupka on 28 April 2000 congratulating her on gaining employment and advising her that her youth allowance was cancelled from 20 April 2000.  Centrelink continued to list Ljupka’s name as a dependent on letters sent to Mrs Popovic on and after 20 April 2000. 

6.      On 19 June 2000, Centrelink wrote to Mrs Popovic to advise that from 1 July 2000, FTB would replace family allowance, basic parenting payment and family tax payment.  Ljupka was listed as an FTB child.  Mrs Popovic was instructed in that letter, and in others dated 6 December 2000, 25 January 2001, 14 March 2001 and 5 June 2001, of the requirement to inform Centrelink if an FTB child’s taxable income was above $7,663.00 per annum.

7.      The overpayment that is the subject of this review is for the financial year ending 30 June 2002 (the relevant year).  Both Ljupka and Goran were listed as FTB children in letters from Centrelink to Mrs Popovic dated 12 July 2001 and 9 April 2002.  In the letters, Centrelink advised Mrs Popovic that she was required to notify Centrelink within 14 days if an FTB child’s taxable income was equal to or above $8,079.00. 

8.      Centrelink records note a conversation on 17 October 2002 in which Mrs Popovic advised that Ljupka’s taxable income for the relevant year was approximately $30,000.  The Centrelink officer informed Mrs Popovic of the possibility that she had been overpaid FTB in the two previous financial years.  On 21 October 2002, Mr Popovic called at Centrelink’s office with a form and advised that he and his wife were not seeking any payments for Ljupka as she was working and independent of her parents.

9.      The overpayments made in the previous financial years were the subject of a separate decision and review.  Centrelink conceded that some of the debt for those earlier years arose out of administrative error and also applied a general $1,000 waiver available to certain FTB recipients.   

10.     On 7 July 2003, a data matching review with the Australian Taxation Office indicated that Ljupka’s income for the relevant year was $30,281.  On 15 July 2003, the respondent’s delegate wrote to Mrs Popovic informing her that she had been overpaid $1,383.35 in FTB between 1 July 2001 and 30 June 2002 and raised a recoverable debt in that amount.   

11.     In a letter dated 7 March 2004, Mrs Popovic complained to Centrelink about that decision and its actions in deducting $54.30 per fortnight towards repayment of the debt from carer allowance she was receiving.  On 25 March 2004, she sought access to Centrelink’s records pursuant to the Freedom of Information Act 1982.  On 14 May 2004, she was granted copies of the documents Centrelink still had in its possession. 

12.     On 20 May 2004, Mrs Popovic sought review of the delegate’s decision to raise the debt of $1,383.35.  On 7 June 2004, an authorised review officer determined that there had been an overpayment but that the amount of the debt was incorrect.  On 21 June 2004, Mrs Popovic applied to the SSAT for review of the decision.  On 6 July 2004, the SSAT affirmed the delegate’s decision that there was a recoverable debt and affirmed the amount of the debt as $1,383.35.  An application for review with this Tribunal was lodged on 9 August 2004.

13.     The issue before the Tribunal is whether Mrs Popovic owes a debt to the Commonwealth, and if so, whether the debt should be waived. 

EVIDENCE

14.     Mrs Popovic told the Tribunal that she had informed Centrelink of all the changes in her life since she began receiving benefits.  Mrs Popovic said that her daughter had been receiving Austudy while at school and then she went on to Newstart allowance.  She said that her daughter had filled in all the claim forms required until she commenced work on 20 April 2000.  Mrs Popovic described their attendance at the Centrelink office on 18 April 2000, when they told an officer that Ljupka had obtained work.  She cited the congratulatory letter sent to her daughter by Centrelink on 28 April 2000 as proof of their actions.  Having advised Centrelink of the change of her daughter’s status, Mrs Popovic said that she thought it odd that Ljupka’s name continued to appear in correspondence but did not worry much about it as she knew that they had informed Centrelink that Ljupka was now independent. 

15.     Mrs Popovic said that when she received the letter dated 27 June 2001 asking about her daughter’s income, she did not call Centrelink as her daughter’s earnings were her private affair.  Mrs Popovic thought there was no need to call as Centrelink already knew Ljupka’s status.  Mrs Popovic said that she realised that something was wrong in October 2002 when she received a form from Centrelink because of her daughter’s pending 21^st birthday.  She said that she contacted Centrelink on 17 October 2002 as she believed she did not need to fill out the form because her daughter was independent and Centrelink knew that.  She said she was shocked to find out that she had incurred a debt due to payments made by Centrelink on the mistaken assumption that her daughter was still a dependent. 

16.     Mrs Popovic said that she and her husband were separated from January 1998 to September 1999.  During that time, she was receiving parenting payment (single).  Her husband had a serious workplace accident in June 1999 and she and the children resumed living with him as he needed care.  Mrs Popovic said that she contacted Centrelink in December 1999 and was informed that she was still entitled to a benefit for Ljupka as she was not working and was living at home.  Mrs Popovic said that she assumed that telling Centrelink that Ljupka had commenced work would stop any payment of moneys on her behalf.  She said that she has not been receiving any FTB for Goran since June 2003 when he turned 16. 

17.     Mrs Popovic said that she is now on carer payment and carer allowance of $382 per fortnight and that the moneys being deducted towards repayment of the debt were causing her hardship.  She described her unsuccessful attempts to get Centrelink to reduce the amount of the deductions which it had imposed, without any consultation or notice.  She said that she and her husband, who has a permanent disability, rent their home.  She said that the dispute with Centrelink had exacerbated the serious allergies from which she suffers.  Mrs Popovic said that it was solely Centrelink’s error that she was overpaid FTB in that she had advised it that her daughter was working in April 2000.  She said that she did not do anything wrong.

18.     Mrs Popovic described difficulties she and her husband had experienced with Centrelink, including the continued inclusion of Goran as a dependent on their health care cards.  She said that they have contacted Centrelink three times for fresh cards and each time they have sent identical, defective ones, still listing their son’s name.  Mrs Popovic also expressed her concern about Centrelink’s breach of her daughter’s privacy in seeking information about Ljupka’s income without obtaining Ljupka’s consent, given that she had not been a recipient of Centrelink benefits since April 2000.

CONSIDERATION OF THE ISSUES

19. Section 21 of A New Tax System (Family Assistance) Act 1999 (the Family Assistance Act) states that a person is eligible for FTB if, amongst other things, she has at least one FTB child. Section 22(5) of the Family Assistance Act sets out the requirements for an FTB child who is aged 18 to 20:

22.(5)  The individual is an FTB child of the adult if:

(a)       the individual has turned 18 but is aged under 21; and

(b)       the individual is in the adult’s care; and

(c)the individual is an Australian resident, is a special category visa holder residing in Australia or is living with the adult.

20. Subsection 22A(1) of the Family Assistance Act provides that where the FTB child’s adjusted taxable income for the year exceeds a prescribed amount, then FTB is not payable to the person who would otherwise receive the FTB.  Subsection 22A(2) sets out a formula to calculate the cut-off amount, namely the maximum amount that the FTB child can earn.  During the relevant year, that amount was $8,079. 

21. Section 71 of A New Tax System (Family Assistance)(Administration) Act 1999 (the Family Administration Act)  provides that:

71.(1)  If:

(a)an amount has been paid to a person by way of family tax benefit, maternity allowance or maternity immunisation allowance (the assistance) in respect of a period or event; and

(b)the person was not entitled to the assistance in respect of that period or event;

the amount so paid is a debt due to the Commonwealth by the person.

22.     Ljupka was under the age of 21 throughout the relevant year.  She qualified as an FTB child on the basis of her age and domicile.  However, her adjusted taxable income for that year was $30,281; well in excess of the cut‑off amount of $8,079.  Centrelink records indicate that Mrs Popovic was paid $1,383.35 in FTB for Ljupka from 1 July 2001 to 30 June 2002.  The Tribunal finds that, as a result of receiving an FTB payment to which she was not entitled, Mrs Popovic owes a debt of $1,383.35 to the Commonwealth.

23.     Section 97 of the Family Administration Act allows for waiver of a debt arising from administrative error:

97.(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.

97.(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.

24.     Mrs Popovic did not dispute that the amount of money earned by her daughter in the relevant year was greater than the cut‑off amount.  However, she contended that the overpayment was solely attributable to administrative errors made by Centrelink.  She pointed out that Centrelink was advised on 18 April 2000 that her daughter was working full‑time.  Mrs Popovic stated that she was not overly concerned about the inclusion of Ljupka’s name in Centrelink correspondence, as she knew that she had already advised Centrelink of her daughter’s change to full‑time work.     

25.     Mr Perdon noted that Centrelink sent several letters to Mrs Popovic between 20 April 2000 and 31 July 2002 in which it informed her of her obligation to notify Centrelink if her daughter’s income was higher than the cut‑off amount specified in the letters.  During the relevant year, Centrelink sent letters on 12 July 2001 and 9 April 2002 in which Mrs Popovic was informed of the requirement to notify Centrelink within 14 days if her daughter’s adjusted taxable income for that year was equal to or above $8,079.  Mr Perdon submitted that as Mrs Popovic did not inform Centrelink that her daughter’s earnings were above the prescribed level until October 2002, the overpayment had not arisen solely due to Centrelink error.

26.     The Tribunal notes that several letters sent to Mrs Popovic after her daughter started full‑time work list Ljupka as an FTB child and inform her of her obligation to notify Centrelink if Ljupka’s income exceeded a certain level.  The Tribunal accepts Mrs Popovic’s evidence that she thought that she had already met her obligations concerning Ljupka’s status, when she told Centrelink of her daughter’s full‑time work and weekly salary on 18 April 2000.  The Tribunal also notes that the content and layout of the letters may have contributed to a misunderstanding, on Mrs Popovic’s part, of the basis of her FTB payments.  However, regardless of the reason for her failure to follow the instructions in the letters, the evidence indicates that Centrelink did notify Mrs Popovic of her obligation.  Therefore, the Tribunal finds that the debt is not attributable solely to an administrative error made by the Commonwealth.  As a result, the debt cannot be waived under s 97 of the Family Administration Act.  

27. Section 101 of the Family Administration Act provides for waiver of the debt in special circumstances:

101.  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.

28.     In light of the Tribunal’s findings in paragraph 26, there is no evidence to suggest that Mrs Popovic deliberately withheld information from Centrelink.  The Tribunal finds that Mrs Popovic did not knowingly make false statements or representations to Centrelink nor did she deliberately fail to comply with a provision of family assistance law. She therefore meets the criteria in s 101(a) of the Family Administration Act.

29.     In Re Beadle and Director-General of Social Security (1984) 6 ALD 1, the Tribunal held that the special circumstances, referred to in s 101(b) of the Family Administration Act, must be unusual, uncommon or exceptional.  Those circumstances must be other than financial hardship alone. 

30.     The Tribunal accepts that Mrs Popovic’s health is not good and that the stress she has experienced has exacerbated the unpleasant symptoms of her allergies.  It also notes her husband’s permanent disability and that Mrs Popovic now relies on carer payment and carer allowance for her income.  It also notes that she is in rented  accommodation.  The Tribunal accepts that repayment of the debt has impacted on the family’s  income.  However, the Tribunal is not satisfied that the situation in which Mrs Popovic finds herself is vastly different from that of other social security recipients who have received overpayments.  The Tribunal is not satisfied that the circumstances in this case are unusual, uncommon or exceptional as defined in Re Beadle.  Therefore, they do not constitute special circumstances (other than financial hardship alone). Hence, the waiver provisions of s 101 of the Family Assistance Act do not apply.

31.     Therefore, Mrs Popovic owes a debt of $1, 383.35 to the respondent. 

32.     Mrs Popovic is currently repaying the debt at the rate of around $55 per fortnight from her pension.  She told the Tribunal that she had been unsuccessful when she approached Centrelink earlier this year to seek a reduction in the rate of repayment.  She is entitled to approach Centrelink again to seek to renegotiate the rate of repayment on the basis of her financial hardship.

DECISION

33.     The Tribunal affirms the decision under review. 

I certify that the thirty-three [33] preceding paragraphs are a true copy of the reasons for the decision of:

Regina Perton, Member

(sgd)       Olympia Sarrinikolaou

Clerk

Date of hearing:  4 November 2004

Date of decision:  23 December 2004
Advocate for applicant:               Self‑represented
Advocate for respondent:            Mr D. Perdon, Centrelink