Rooney and Secretary, Department of Social Services (Social security)
[2025] ARTA 2036
•24 July 2025
Rooney and Secretary, Department of Social Services (Social security) [2025] ARTA 2036 (24 July 2025)
Applicant/s: Ms Rooney
Respondent: Secretary, Department of Social Services
Tribunal Number: 2025/S193814
Tribunal: Member R King
Place:Brisbane
Date:24 July 2025
Decision:The Tribunal sets aside the decision under review and remits the matter for reconsideration in accordance with the order that Centrelink investigates whether Ms Rooney has repaid in full or in part her family tax benefit debt for the 2019-20 tax year, having regard to paragraphs 14 to 28 of this decision.
CATCHWORDS
SOCIAL SECURITY – family tax benefit – overpayment not disputed – debt repaid from account held by applicant and partner at the time – financial settlement between applicant and partner – Centrelink’s attempt to reverse transaction – thorough investigation required – decision under review remitted
Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted from this decision and replaced with generic information pursuant to subsection 161(1B) of the A New Tax System (Family Assistance) (Administration) Act 1999.
Statement of Reasons
BACKGROUND
Ms Rooney was in receipt of family tax benefit (FTB) for [her daughter] during the 2019-20 tax year (the debt year). Ms Rooney was paid FTB in fortnightly instalments on the basis of her income estimates she provided.
On 5 October 2022, Centrelink decided that Ms Rooney had received overpayments of FTB for the 2019-20 tax year in the sum of $12,014.96. Centrelink raised and sought recovery of a debt in this sum.
Ms Rooney sought internal review of this decision. On 8 March 2024, following internal review, a Centrelink authorised review officer (ARO) affirmed the debt but revoked an interest charge that had been imposed after the debt had been raised.
On 21 March 2025, Ms Rooney applied to this Tribunal for external review of her FTB debt. In her application, she submitted that she had repaid her debt in February 2023.
ISSUES
The statutory provisions relevant to this review are set out in the A New Tax System (Family Assistance) Act 1999 (the FA Act) and the A New Tax System (Family Assistance) (Administration) Act 1999 (the FA Admin Act).
FTB is usually subject to an income test, the details of which are set out in Schedule 1 to the FA Act. The income tests for FTB-A and FTB-B are somewhat different, and the income thresholds are subject to change from year to year. At the beginning of the debt, the maximum rate of FTB-A was reduced by 20 cents for every dollar of combined adjusted taxable income between $54,677 and $98,988 and by 30 cents for every dollar of combined adjusted taxable income above $98,988. The base rate of FTB-A also reduced by 30 cents for every dollar of adjusted taxable income above $98,988. This meant that for a person with one FTB child over the age of 12 years, no FTB-A was payable once combined adjusted taxable income exceeded $104,184. At the beginning of the debt period FTB-B was only payable if a single person or the higher income earner of a couple had an adjusted taxable income of $100,000 or less. The rate then was determined by the adjusted taxable income of the lower income earner of the couple, with payments being reduced by 20 cents for every dollar of that person’s adjusted taxable income that exceeded $5,694.
The income used in the income test is the assessment of taxable income reported by the ATO plus any additional income as specified in Schedule 3 to the FA Act. This sum is referred to as adjusted taxable income. Of relevance to this decision, item (f) of subparagraph 2(1) of Schedule 3 specifies the sum of a person’s reportable superannuation contributions as an amount that must be added to taxable income when determining a person’s adjusted taxable income. When a person is a member of a couple both incomes must be taken into account. Maintenance income (child support payment) is also taken into account in the income test.
While FTB is an annual payment, recipients may elect to receive it in fortnightly instalments, in which case the rate of payment is based on income estimates (including maintenance income estimates) for the relevant tax year that are provided by the recipient. After receiving advice from the ATO about the actual taxable income and/or advice from Child Support of the maintenance income entitlement, Centrelink conducts what is termed a reconciliation. This compares the amount of FTB paid in fortnightly instalments and the amount the person was entitled to receive under the income and the maintenance income tests.
Following the reconciliation, Centrelink either provides a top-up payment if the person received less than their entitlement in the form of fortnightly instalments or seeks recovery of any amount the person received that exceeded their entitlement. When a person who has received overpayments fails to enter into a repayment arrangement, an interest charge can be applied.
Under section 71 of the FA Admin Act any overpayment of FTB is a debt. Section 97 of the FA Admin Act allows for non-recovery of part or all of a debt that arose solely because of administrative error (and recovery would cause severe financial hardship) and section 101 of the FA Admin Act allows for non-recovery of part or all of a debt if there are special circumstances that make waiver of recovery desirable.
The issues which arise in this case are whether Ms Rooney has an FTB debt for the 2019-20 tax year and, if so, what is the amount of the debt and whether this amount should be recovered in full.
CONSIDERATION
The evidence before me comprises:
(i)The documents provided by Centrelink as evidence it relied on when making the original decision and at the time of the internal review (the hearing papers).
(ii)Sworn evidence and oral submissions provided by Ms Rooney during a hearing by telephone on 9 July 2025.
(iii)Additional evidence provided by Ms Rooney.
Centrelink’s position is set out in the decision statement of the ARO who found that the income estimates provided by Ms Rooney during each debt year were less than the actual adjusted combined taxable income determined after Centrelink received advice from the ATO. Ms Rooney’s actual combined adjusted taxable income for the 2022-23 year was $101,623. This meant that Ms Rooney’s FTB entitlement was $785.93. She had been paid a total of $12,800.89, comprising $8,756.27 in an erroneous top-up payment and periodic payments in excess of her entitlement. The ARO determined that there was no basis for waiving recovery of part or all of the debt because it was not caused by administrative error and Ms Rooney was not affected by special circumstances such as to make full or partial waiver of recovery desirable.
During the hearing, Ms Rooney told me that she did not dispute the debt calculations and was not seeking waiver of recovery. However, she had repaid the debt via a BPAY transfer from a joint account with her then partner ([Ms A]) in February 2023. Ms Rooney said that she and [Ms A] separated and there was a financial settlement in September 2023. Ms Rooney told me that the debt repayment was taken into account during the course of this settlement.
Ms Rooney told me that it had taken a long time for her to get to the bottom of why Centrelink continued to believe that she had a debt. In April this year she spoke with [Mr B], a team leader from Centrelink’s Debt Administration and Bankruptcy Team who had explained to her that they had attempted to reverse the BPAY transaction after a contact from [Ms A] but that this had not been possible because the account was closed. A cheque was therefore issued to [Ms A] to return the payment. [Mr B] had subsequently written to her confirming the information provided orally.
Ms Rooney submitted that Centrelink had no right to return her repayment to [Ms A] as the BPAY transfer had been taken into account during the financial settlement that followed their separation. Centrelink should therefore accept that her FTB debt had been repaid and, if they so wished, should recover the payment they had wrongly made to [Ms A].
Subsequent to the hearing, Ms Rooney provided the Tribunal with a copy of a letter from [Mr B], dated 11 April 2025 and a copy of transaction records from her NAB joint account with [Ms A], showing a BPAY transfer of $12,000 to Centrelink on 27 February 2023.
Does Ms Rooney have an FTB debt for the 2019-20 tax year, and, if so, in what sum?
It is not in dispute that Ms Rooney received overpayments of FTB in the sum of $12,014.96. The debt calculations are set out in the hearing papers. The debt is complex because it arose in part because Ms Rooney’s fortnightly FTB payments (paid on the basis of income estimates) were higher than her entitlement and in part because she was paid a top-up following reconciliation when the ATO advised a tax assessment that was subsequently revised.
I am satisfied that the overpayments were correctly calculated, and that Ms Rooney received through a combination of fortnightly payments and a top-up payment a total of $12,014.96 of FTB for the 2019-20 tax year in excess of her entitlements. This sum is a debt, pursuant to section 71 of the FA Admin Act.
However, a debt ceases to exist once it has been repaid. The evidence before me establishes that the sum of $12,000 was transferred by BPAY from a NAB joint account held by Ms Rooney and her then partner on 27 February 2023. I note that the BPAY details in the NAB transaction records correspond with the BPAY details contained in the debt recovery notices sent to Ms Rooney.
Centrelink does not dispute receiving payment of $12,000 in respect of Ms Rooney’s FTB debt. Rather, [Mr B] advised Ms Rooney in April this year that “based on the advice received, it appeared that the amount received was the result of a mistaken payment made to an incorrect Customer Reference Number”. As a result, after failing in an attempt to reverse the BPAY transaction, Centrelink “issued a cheque in the name of the Payer, [Ms A]”.
As best I can understand [Mr B]’s communication, Centrelink decided that [Ms A] had transferred the sum of $12,000 in error and that this sum was returned to her by cheque.
The communication from [Mr B] (or, at least, how I have interpreted it) is quite inconsistent with Ms Rooney’s sworn evidence that she made the transfer in respect of her debt from a joint account she held with [Ms A] and that this transfer was the subject of a financial settlement when she and [Ms A] separated.
I found Ms Rooney to be credible in her evidence and I am satisfied that the documentary evidence she has provided corroborates her evidence. While I cannot rule out the possibility that [Ms A] has a claim on the $12,000 transferred to Centrelink in respect of the debt, there is nothing in the decision of the ARO or the communications from [Mr B] to substantiate such a claim. In her evidence during the hearing, Ms Rooney told me that Centrelink never communicated with her about any claim made by [Ms A], so she had no opportunity to make her case. She said that documents she has pertaining to the financial settlement establish that [Ms A] has no claim on the transfer she made from their joint account in respect of her FTB debt.
In matters such as this, there is a burden on Centrelink to establish that Ms Rooney has a debt. While I am satisfied that Centrelink has established that there was a debt at the time of the original decision, the evidence before me indicates that this debt had been substantially discharged more than 12 months prior to the internal review. If there was a remaining debt, it was in the relatively trivial sum of $14.96.
It appears to be possible that Centrelink erred in issuing a cheque to [Ms A]. If, as Ms Rooney said during the hearing, Centrelink did not contact her prior to issuing a cheque to [Ms A], there would seem to be an absence of due process. If the cheque was issued to [Ms A] in error, it is a matter for Centrelink to determine whether it wishes to seek recovery of this payment. Even if the cheque was properly and lawfully issued to [Ms A], Ms Rooney is entitled to an explanation and an opportunity to present her position. At the very least the matter requires thorough investigation that is likely to involve careful scrutiny of any documents associated with the financial settlement between Ms Rooney and [Ms A] and probably interviews with both parties. This is beyond the scope of the matter before me, so I will remit the matter to Centrelink for further consideration.
For reasons set out above, I am not satisfied that Centrelink has established that Ms Rooney has an FTB debt in the sum of $12,014.96. Nor am I well placed to determine what amount if any, of the debt that Centrelink has attributed to Ms Rooney (except possibly $14.96) has been properly attributed to her. It appears that this may still be subject to dispute between Ms Rooney and [Ms A].
If, after further investigation, it is established that the sum of $12,000 was properly and lawfully transferred to Centrelink in respect of Ms Rooney’s FTB debt for the 2019-20 tax year, recovery of the remaining $14.96 should be waived, pursuant to section 101 of the FA Admin Act. I am satisfied that Ms Rooney has been through a difficult and demanding period both as a result of the breakdown of her relationship with [Ms A] and also in her subsequent attempts to seek review of the debt.
DECISION
The Tribunal sets aside the decision under review and remits the matter for reconsideration in accordance with the order that Centrelink investigates whether Ms Rooney has repaid in full or in part her family tax benefit debt for the 2019-20 tax year, having regard to paragraphs 14 to 28 of this decision.
| Date of hearing: | Wednesday, 9 July 2025 |
| Representative for the Applicant: | Ms Rooney was self-represented |
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