Reshiti and Secretary to the Department of Family and Community Services

[2002] AATA 1130

DECISION AND REASONS FOR DECISION [2002] AATA 1130

ADMINISTRATIVE APPEALS TRIBUNAL          Nº V2002/452
GENERAL ADMINISTRATIVE  DIVISION
  Re:   JANINE FATIME RESHITI
  Applicant
  And    SECRETARY TO THE
  DEPARTMENT OF FAMILY AND
  COMMUNITY SERVICES
  Respondent

DECISION

Tribunal:       Miss E.A. Shanahan, Member
Date:             18 September 2002
Place:            Melbourne

Decision:For reasons given orally at the hearing, the Tribunal affirms the decision under review.

(sgd) E.A. Shanahan
  Member
SOCIAL SECURITY – family assistance - family tax benefit – discrepancy between estimated income and actual income – overpayment - debt owed to the Commonwealth - administrative error
A New Tax System (Family Assistance) Act 1999 ss.16; 20; 21; 23; 31A(1), (2);
     58, Schedule 1, Schedule 3; 71; 105; 107
Family Assistance Estimation Tolerance (Transition) Determination 2001 (Determination
     made under s.102 of the primary Act)

clause 4 Class of debts

clause 5 Conditions and Limits on Waiver
clause 6 $1000 ceiling

REASONS FOR DECISION

18 September 2002  Miss E.A. Shanahan, Member

1. This is an application for review of a decision dated 17 January 2002, which determined that the applicant had received greater family tax benefit than she was entitled to based on her annual family income for 2000/2001.  The debt owed to the Commonwealth was $5749.77, of which $1000 was waived in accordance with the Family Assistance Estimation Tolerance (Transition) Determination 2001 (the Determination).  This decision was affirmed by an authorised review officer (ARO) on 11 February 2002 and by the Social Security Appeals Tribunal (SSAT) on 12 April 2002. 

2. The applicant was paid family tax benefit (FTB) for the financial year 1 July 2000 to 30 June 2001.  On 1 July 2000, the applicant estimated that the family income (herself and her husband) would be $17,900.00.  At the time she was on maternity leave and her husband on newstart allowance.  Payment was made at the full rate, and took into account that she was paying rent. 

3. In September 2000, the applicant and her husband applied for and received funding under the New Enterprise Incentive Scheme (NEIS).  The company that the applicant's husband had worked for had gone into liquidation.  He planned to takeover the liquidated company and eventually did so with the assistance of NEIS payments.  The applicant also intended to resume work and, ultimately, did so in December 2000. 

4. On 11 October 2000, the applicant provided Centrelink with an estimate of the family's taxable income for 2000/2001 as $50,000.00.  On 25 October 2000, the applicant estimated the joint taxable income as $18,240.00 (the NEIS payment) when applying for another income benefit allowance (possibly a concession card).  On 13 December 2000, the applicant advised that, having returned to part-time work, she estimated she would earn $14,720.00 for the remainder of the 2000/2001 financial year. 

5. On each occasion Centrelink adjusted the FTB and notified the applicant of the adjustment and the income (as advised by the applicant) on which it was calculated. 

6. At the end of the financial year the applicant set about completing the 2000/2001 income tax return and realised that she and her husband had had a joint income of over $80,000.00.  Based on the Australian Taxation Office (ATO) assessment of the family income, a debt owed to the Commonwealth was calculated by Centrelink and $1000 of this debt waived in accordance with item or clause 6 of the Determination. 
   EVIDENCE BEFORE THE TRIBUNAL

7. The applicant argued that her estimate of joint income of $50,000.00, as advised in early October 2000, should have been relied upon by Centrelink at all times.  She had arrived at this estimate on a predicted income of approximately $18,000.00 from NEIS; $25,000.00 from her husband's business; and approximately $11,000.00 that she would earn working three days per week at a bank.  That Centrelink had not used this sum as a baseline for calculating FTB was, in the applicant's opinion, an administrative error that had resulted in an overpayment and the raising of the debt owed to the Commonwealth.  She also argued that the overpayment should be calculated on the $30,000.00 difference between this October estimate and the actual income of approximately $80,000.00. 

8. The applicant gave evidence that she had expected the FTB payments would vary with changes in income, that she read every advice from Centrelink in full but had assumed the FTB calculations were correct.  Until the end of the year 2000, she received payment of $402.00 per fortnight and at the time of the hearing the FTB payment was $120.00 per fortnight. 

9. The applicant estimated that the 2001/2002 joint income would probably be less than $80,000.00.  She and her husband continued to live with his parents, to whom they paid rent.  The grandparents minded her three children on the three days per week she worked at the bank.  Her husband's business continued to be viable and expanding. 
   THE RELEVANT LEGISLATION

10. A New Tax System (Family Assistance) Act 1999 (the FA Act): the FA Act provides family assistance in the form of an FTB, based on the combined income of the person to whom it is paid and their partner (Part A) or based on the secondary earner's income alone (Part B). The FTB paid is based on estimates of income (as provided by s.20 of the FA Act). If the FTB paid was greater than it should have been when the taxable income is determined by the ATO, the overpayment calculated in accordance with the ATO taxation assessment, is a debt to the Commonwealth (s.71(2) of the FA Act).

11. Family Assistance Estimation Tolerance (Transition) Determination 2001:  this determination (made under s.102 of the primary Act) deals with the class of debts (clause 4), conditions and limits on waiver of debts (clause 5) and a $1000.00 ceiling waiver (clause 6). 
    APPLICATION OF THE LEGISLATION TO THE FACTS BEFORE THE TRIBUNAL

12. Throughout the first six months of the 2000/2001 financial year, the applicant's FTB was paid (under Part A of the Act) at varying rates according to her estimates of income as advised to Centrelink.  In the second six months of the financial year, FTB was paid in accordance with the estimate of December 2000.  The ATO assessment of taxable income for the 2000/2001 year was $80,137.00.

13. The debt of $5747.77 was calculated and discounted, by $1000.00, to $4747.77 in accordance with the provisions of clause 6 of the Determination.

14. The applicant claimed that the overpayment, or part of it, arose from administrative error and that the debt calculated should be waived, at least in part. Section 97 of the FA Act provides for waiver of the debt for sole administrative error if the debt is raised after the end of the next income year, that is, in this case after 30 June 2002. The applicant was advised of the debt on 17 January 2002.

15. No special circumstances were shown that would attract waiver under s.101 of the FA Act.

16. The Tribunal finds the amount of $4747.77 is a debt owed to the Commonwealth and affirms the decision under review. 

    I certify that the sixteen [16] preceding paragraphs are a true copy of the reasons for the decision herein of
    Miss E.A. Shanahan, Member

    (sgd)     Catherine Thomas
                Clerk

    Date of Hearing:  18 September 2002
    Date of Decision:  18 September 2002
    Solicitor for the Applicant:           Nil — IN PERSON

    Solicitor for the Respondent:        Nil — Ms C. McInnis, Advocate with Centrelink