RCFW and Secretary, Department of Families, Community Services and Indigenous Affairs

[2007] AATA 2017

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 2017

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2007/2211

GENERAL ADMINISTRATIVE DIVISION		)
Re		RCFW

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Senior Member L Hastwell

Date5 December 2007

PlaceAdelaide

Decision The Tribunal affirms the decision under review.

..............................................

L HASTWELL
  (Senior Member)

CATCHWORDS

SOCIAL SECURITY – pensions, benefits and allowances – Family Tax benefit –overpayment – income of dependent child – income allowance for child over the age of 16 years exceeded by child – failure to notify Centrelink – special circumstances – waiver considered – decision affirmed

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

A New Tax System (Family Assistance) (Administration) Act 1999 s 71(1), 95, 97(1) & (2), 101

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

Re Davey and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114

REASONS FOR DECISION

5 December 2007   Senior Member L Hastwell   

1.      This case involves an overpayment of Family Tax Benefit (FTB).

2.      At all relevant times the applicant was a recipient of FTB with respect to one dependent child over the age of 16 years (the FTB child).

3.      On 11 December 2006 the Family Assistance Office (FAO) made a decision to raise and recover from the applicant the following debts:

·a debt of $2,977.57 arising from an overpayment of FTB for the period 1 July 2005 to 30 June 2006; and

·a debt of $467.40 arising from an overpayment of FTB for the period 1 July 2006 to 29 August 2006.

4.      The decision was affirmed by an Authorised Review Officer on 18 January 2007 and then affirmed by the Social Security Appeal Tribunal (SSAT) on 12 April 2007.

5.      The applicant seeks review of the SSAT decision to this Tribunal.

legislation

6.      The relevant legislation is found in the A New Tax System (Family Assistance) Act 1999 (the Act) and the A New Tax System (Family Assistance) (Administration) Act 1999 (the Administration Act).

7. Section 21 of the Act sets out the eligibility requirements for entitlement to FTB. The eligibility requirements include having a FTB child in the adult’s care.

8. Section 22 of the Act defines a FTB child for the purposes of s 21 of the Act. A child under the age of 18 years who is in an adult’s care can qualify as an FTB child.

9. Section 22A of the Act sets out exceptions to s 22 in the following terms:

“22A  Exceptions to the operation of section 22

Exceptions

(1)Despite section 22, an individual cannot be an FTB child of another individual (an adult) in the cases set out in this table:

When the individual is not an FTB child of the adult at a particular time

If the individual is aged                 then the individual cannot be an

  FTB child of the adult if:

1  5 or more and less than 16

(a) the individual is not undertaking full-time study or primary education and the individual has adjusted taxable income, for the income year in which the particular time occurs, that equals or exceeds the cut-out amount (see subsection (2)); or (b) the adult is the individual’s partner, or would be if the individual was over the age of consent applicable in the State or Territory in which the individual

lives.

2  16 or more

(a) the individual has adjusted taxable income, for the income year in which the particular time occurs, that equals or exceeds the cut-out amount (see subsection (2)); or

(b) the adult is the individual’s partner; or

(c) the individual, or someone on behalf of the individual, is, at the particular time, receiving payments under a prescribed educational scheme.

3  any age

the individual, or someone on behalf of the individual, is, at the particular time, receiving:

(a) a social security pension; or

(b) a social security benefit; or

(c) payments under a program included in the programs known as Labour Market Programs.

10. Section 22A(2) provides the income cut out amount for the purposes of children who are over the age of 16 years. In other words, the income amount that the FTB child can earn before FTB cuts out for the child.

11. Section 71(1) of the Administration Act specifies that a FTB amount paid to which a person is not entitled becomes a debt due to the Commonwealth. It states as follows:

“71  Debts arising in respect of family assistance other than child care benefit and family tax benefit advance

No entitlement to amount

(1)      If:

(a)an amount has been paid to a person by way of family tax benefit, baby bonus 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.”

12. Section 95 of the Administration Act provides that the Secretary may write-off a debt in certain circumstances. This means deferring the debt such that it can be paid at a later time as determined by the decision-maker. The applicant does not seek a write-off of the debt in this case.

13.     Section 97 of the Administration Act provides for waiver of a debt in certain circumstances.  It provides as follows:

“97  Waiver of debt arising from error

(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.

…”

14.     The Tribunal also has an ability to waive a debt in special circumstances under s 101 of the Administration Act.  Section 101 provides as follows:

“101  Waiver in special circumstances

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.”

background

15.     The applicant had the care of two of her teenage sons during the relevant period of the overpayment.

16.     The FTB child was born on 3 March 1988 and turned 16 in March 2004.

17.     The applicant was in receipt of FTB on the basis of having 75 percent shared care of that child in the 2005/2006 financial year and in part of the 2006/2007 financial year.

18.     During the 2005/2006 financial year the FTB child had employment and was also studying.  His income was $22,810.00.

19.     In the 2006/2007 financial year, FTB was paid to the applicant until 29 August 2006, at which date it was  determined that the FTB child’s income was likely to exceed the relevant cut-out amount for the 2006/2007 financial year.

20.     The applicant raises no dispute with the fact of the overpayment or the calculation of that sum.  She acknowledges that her son earned in excess of the sum that would enable him to be a FTB child for 2005/2006.  She agreed that the overpayment of FTB for the short period in the financial year 2006/2007 was also correct.

21.     The applicant asked the Tribunal to waive the debt.

22.     The applicant is a recipient of a Disability Support Pension.

issues

23.     The issues for the Tribunal in this matter are:

·did the applicant receive FTB payments in excess of her entitlements during the relevant periods;

·if so, have the amounts being correctly calculated and are they a debt to the Commonwealth; and

·if so, should the debt be recovered?

24.     In considering recovery the Tribunal must determine the following issues:

·has there been an administrative error with respect to some or all of the debt;

·in that event, has the administrative error proportion been received in good faith; and

·in that event, would the applicant suffer severe financial hardship if the debt  is not waived

26.   If there has been no administrative error, the Tribunal must consider whether there are special circumstances in this case that would justify a waiver of some or all of the debt for reasons other than financial hardship alone.

the hearing

25.     The applicant represented herself at the hearing.  The T documents were received into evidence.

26.     She explained to the Tribunal that two of her children had come back into her care after a period of being out of her care.

27.     She approached the respondent (the Department) at this time to ascertain what her entitlements would be and she was encouraged to apply for FTB with respect to the particular child that became the FTB child.  The other child became a recipient of Youth Allowance.

28.     The FTB child was studying.  He also obtained a part-time job in a library and was earning his own independent income.

29.     The applicant had no idea what he would be earning.  She certainly did not appreciate that he would earn as much as he did.

30.     She does not dispute that during the relevant period he earned more than the FTB child income cut out amount of $11,233.00 for that year and that in the 2006/2007 financial year he had also exceeded the earning cut out point, which was slightly higher in the second year.

31.     She said that she was told by the Department when she applied for FTB that if the FTB child had an income in excess of approximately $11,000.00, then her eligibility would be affected and an amount would need to be repaid.

32.     She was vague about her understanding of the income rules saying at one stage in her evidence that she thought her son would incur the debt and that he would need to repay the debt rather than her.

33.     She had not understood that the entitlement for the entire FTB year would cut out altogether when the relevant income ceiling was reached.

34.     She was aware of the need to notify Centrelink if her child’s income exceeded that amount.  However, she had no idea when it did exceed that amount and was surprised that he earned so much in that year.

35.     She has had difficulties with Centrelink before and the overpayment situation has caused her significant stress in the context of all the other problems she has been experiencing in her life.

36.     She had issues in other legal forums during the period that her FTB son was working and studying and she really did not keep up with what he was earning.   She told the Tribunal she has memory and health difficulties.  She was having problems with her youngest child at the time and she emphasised that it was not deliberate that she did not keep a good track of her son’s earnings.

37.     She currently receives Disability Support Pension and is on a limited income.

38.     She has had significant problems with her younger child who appears to have some health problems himself.  She suffers from stress and anxiety associated with these difficulties.  She told the Tribunal that her other son is also causing her some worries as he is not interested in further study or work at this point in time.

39.     She is unable to afford clothing and does not buy clothing unless absolutely necessary.  She is on the list for public accommodation and has, to a degree, relied on her older children for financial assistance in recent times.

40.     She was referred to letters that were sent to her by the Department during the overpayment period, including a fact sheet regarding the FTB entitlement for children in the 16 to 24 year age bracket.  She agreed that she had received mail from the Department, but she said that she was having such a difficult time in her personal life that she did not always read her mail.

41.     The applicant felt she had been misinformed by the Department although she could not point to any error as such, but rather what she considered to be a misunderstanding between her and the Department as to how the income cut out rules would operate in her case.

42.     When asked whether her son could assist with repaying the debt given that it was based on his quite significant earnings for a person of his age, the applicant’s response was that he had purchased a car, he was now living with his father and she was not willing to ask him to assist with the repayment of the debt.   He now has a car loan to pay.

findings of fact

43.     The Tribunal makes findings in terms of paragraphs 16 to 20 (supra) of this decision.

44.     The applicant received an overpayment of FTB for the period 1 July 2005 to 30 June 2006 in the sum of $2,977.57.

45.     The applicant received an overpayment of FTB for the period 1 July 2006 to 29 August 2006 in the sum of $467.40.

46.     The overpayments have been correctly calculated and they relate to a FTB child earning in excess of the income cut out amount for an FTB child over the age of 16 years in the relevant years.

47.     The applicant was advised by Centrelink that there was an income cut out amount with respect to that particular child and that she must inform the Department once his income exceeded the cut out amount.

48.     The rules with respect to FTB entitlement for a child over the age of 16 years were confirmed in correspondence to the applicant from the Department.

49.     No notification was made by the applicant to the Department of her son’s income once it exceeded the relevant income cut out amount,

50.     There is no administrative error in this case.

51.     The applicant received correspondence from the Department confirming the rules with respect to income allowance for children over the age of 16 years including a fact sheet contained at T57.

52.     The applicant is on Disability Support Pension and the overpayment is currently being deducted at the rate of $15.00 per fortnight from her income.

53.     The applicant has had difficulties in other jurisdictions and her life is somewhat chaotic at times.  She has had difficulties with her teenage sons.

54.     The applicant is not willing to ask her son to contribute in any way to the debt.

55.     The applicant has significant debts to other members of her family and is in difficult financial circumstances.

discussion

56.     As there was no administrative error in this case, s 97 of the Administration Act does not apply.  The only basis on which the Tribunal could consider waiving some or all of the debt would be under the provisions of s 101 of the Administration Act which provides a broader discretion to determine whether in the special circumstances of the case some or all of a debt payable to Commonwealth can be waived.

57.     The Administration Act is clear in its terms that for s 101 to apply the special circumstances must be something other than financial hardship alone.

58.     The case of Re Beadle and Director-General of Social Security (1984) 6 ALD 1 is the authority for the proposition that “special circumstances” means circumstances that can be described as ”unusual, uncommon or exceptional”.

59.      In the recent case of Re Davey and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114 Deputy President Forgie considered the expression “special circumstances” in the context of s 1237A(1) of the Social Security Act 1991.  That section is in similar terms to s 101 of the Administration Act.  She referred to the judgment of Keifel J in Groth v Secretary, Department of Social Security where he commented:

“ … it is sufficient to observe that it would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case … It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.”

60.     In the case of Re Davey, Deputy President Forgie noted that events outside Mr Davey’s control had brought about his current difficult circumstances.  Nevertheless, she expressed the view that not only must the relevant circumstances be “special” as that term is now understood, but the Tribunal must also consider whether waiver is justified in all the circumstances.  She commented as follows

“That necessarily requires a consideration of the person’s individual circumstances but also a consideration of the general administration of the social security system.”

61.     In this case the applicant has had difficult personal circumstances in recent years and has at different times relied on her children to assist her financially.  There has been no error by the Department with any information provided to her or in its general conduct of her file.  She was given written information about the cut off amount that applied to her son at which point he would cease to be a FTB child and she was also verbally told at the time of application that a cut out income amount applied to him. 

62.     It may be that because of her state of mind and medical condition, or because of other events in her life, she failed to properly comprehend this information and failed to provide notification to the Department at the appropriate time.  Nevertheless, she knew at some point during the overpayment period that an overpayment was occurring and it was her obligation to let the Department know.

63.     During the relevant period she travelled to Western Australia for some time to look for employment and there is no indication that she was incapacitated in any significant way that would justify her overlooking her obligation to notify the Department of her son’s financial circumstances.

64.     Her evidence was that she had an expectation that if there was a debt her son would pay it back.  She now acknowledges there is a debt, but says that she should not have to pay it back nor should she ask for those funds from her son.

65.     Although the applicant’s circumstances are unfortunate, they are not special such that it is desirable that the debt be waived.  She was the person responsible for making the notification to the Department.  She has had the full benefit of the payment and although she may have misunderstood how the debt would accrue, she was aware that a debt was accruing at some point during the overpayment period and at that point she should have clarified her position with the Department.

66.     The Tribunal is not unsympathetic to the applicant’s current situation, however it is the Tribunal’s view that her circumstances are not so special that the debt should be waived in this case.

67.     In the circumstances the Tribunal affirms the decision under review.

I certify that the 67 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member L Hastwell

Signed:         .....................................................................................
  Associate

Date of Hearing  15 October 2007
Date of Decision  5 December 2007
Advocate for the Applicant       In person

Advocate for the Respondent   Peter Edwards

Centrelink legal Services Branch