Ryback and Secretary, Department of Social Services (Social security) - [2024] ARTA 801

Ryback and Secretary, Department of Social Services (Social security) [2024] ARTA 801 (27 November 2024)

Applicant/s: Ms Rybacki

Respondent: Secretary, Department of Social Services

Tribunal Number: 2024/B191216
Tribunal: General Member B Walters
Place:Sydney
Date:27 November 2024

Decision:The Tribunal sets aside the decision under review and remits the matter for reconsideration in accordance with the order that:
1.Between 29 March 2016 and 31 May 2017 [Child 2] was a senior secondary school child in accordance with paragraph 22B(2)(c) of the A New Tax System (Family Assistance) Act 1999, and
2.The Commonwealth’s right to recover any debt arising after reconsideration on this basis is waived under section 101 of the A New Tax System (Family Assistance) (Administration) Act 1999 on the basis of special circumstances.

CATCHWORDS

SOCIAL SECURITY – Family Tax Benefit – study requirement – child aged 16 not attending senior secondary school – behaviour, refusal to participate and cancellation of enrolment – ADHD and dyslexia – not incapable of studying – homelessness, family relationships, criminal offences and community service – applicant’s domestic violence, high-risk pregnancy and mental health – unreasonable to require child to study – recalculation will likely result in a smaller debt – no false statement or failure to comply – debts already repaid – special circumstances – any recalculated debt waived – decision under review set aside and 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 16(2AB) of the Child Support (Registration and Collection) Act 1988.

Statement of Reasons

BACKGROUND

This review is about 2 family tax benefit (FTB) debts that Services Australia (Centrelink) raised against Ms Rybacki, and whether those debts must be recovered.
On 9 August 2017, Centrelink determined that Ms Rybacki had been overpaid FTB in the 2015/2016 and 2016/2017 financial years and a debt was raised in respect of each year. The first debt of $2,609.44 relates to the period 29 March 2016 to 30 June 2016. The second is a debt of $7,418.91 for the period 1 July 2016 to 30 June 2017. Centrelink wrote to Ms Rybacki on 9 August 2017, asking her to repay these amounts.
After the debts were first raised, Ms Rybacki’s FTB for the 2016/2017 financial year was re-reconciled to take into account a retrospective increase to her entitlement to child support for that year and the debt of $7,418.91 increased to $7,802.37.
Ms Rybacki made contacts with Centrelink querying the correctness of these debt decisions and expressing dissatisfaction with them on 12 May 2021, 17 October 2022 and 13 October 2023. On 2 November 2023 a Centrelink authorised review officer conducted a review of the 2 debts and affirmed them.
On 27 September 2024, Ms Rybacki sought further review from the Social Services and Child Support Division of the Administrative Appeals Tribunal (the AAT).
From 14 October 2024, the AAT became the Administrative Review Tribunal (the Tribunal). Applications for review to the AAT that were not finalised before 14 October 2024 were taken to be an application for review to the newly established Tribunal. The Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 gives the Tribunal authority to continue and finalise any aspect of the review not already completed by the AAT. This decision and statement of reasons is made by the Tribunal.
The Tribunal heard the application on 27 November 2024. Ms Rybacki appeared at the hearing and gave affirmed evidence by telephone. The Tribunal had before it 507 pages of documents provided by Centrelink (the hearing papers). These were provided to Ms Rybacki prior to the hearing.

ISSUES

The statutory provisions relevant to this review are set out 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).
The issues which arise in this case are:
· Whether Ms Rybacki has debts to the Commonwealth, and
· If so, whether those debts should be recovered.

CONSIDERATION

Issue 1 – Whether there are debts to the Commonwealth

Section 71 of the Administration Act says that if a person is paid more FTB than they are entitled to receive, or if they are paid an amount of FTB that they were not entitled to receive at all, then those amounts become a debt to the Commonwealth.
Part of the FTB debt for the 2016/2017 financial year arises because a retrospective increase to Ms Rybacki’s maintenance income resulted in Centrelink re-reconciling her entitlement to FTB and increasing her existing debt for that year by $383.46.[1]
[1] Page 65 of the hearing papers.
In the 2016/2017 financial year Ms Rybacki’s rate of FTB was calculated and paid to her for both her children, [Children 1 and 2]. At hearing, Ms Rybacki argued that maintenance she receives in respect of one child should not be assessed to reduce the rate of FTB she receives in respect of another child.
A person’s rate of FTB is calculated under the rate calculator at Schedule 1 to the Act. Clause 3 provides that FTB Part A is calculated, broadly speaking, by determining the person’s maximum rate of FTB, then applying the income test, and then applying the maintenance income test. Clause 20 sets out provisions concerning the effect of maintenance income on a person’s FTB rate. These provisions do not provide for maintenance income to be assessed against amounts of the FTB rate payable in respect of the child for whom the maintenance income is received. It is not open to the Tribunal to recalculate Ms Rybacki’s debt on the basis she has requested.
The larger part of the debt relates to the impact, if any, of [Child 2] ceasing full-time study in 2016 on Ms Rybacki’s entitlement to FTB.
To receive FTB a person must have an FTB child in their care.[2] A young person who has reached 16 years of age but is not yet 18 can only be an FTB child, if they are a senior secondary school child.[3]
[2] See subsection 21(1) and section 22 of the Act.
[3] See subsection 22(3) of the Act, noting limited exceptions at section 22A.
A person who is 16 years old can be taken to be a senior secondary school child pursuant to subsection 22B(1) of the Act if they are undertaking full‑time study in an approved course working towards completion of the final year of secondary school (or an equivalent level of education) or an exemption applies. It is possible to be exempt from the full-time study requirement under subsection 22B(2) if, most relevantly:
·the young person lacks the capacity to undertake the course because they have a physical, psychiatric or intellectual disability or a learning disability such as attention deficit disorder (subparagraph 22B(2)(b)(iii)), or
·there are special circumstances which make it unreasonable to require that the young person undertakes an approved course (paragraph 22B(2)(c)).
The hearing papers show that Ms Rybacki advised Centrelink on 9 August 2017 that her son [Child 2] had ceased full-time study as of 29 March 2016. A letter from [High School] dated 8 March 2016 confirms that a decision had been made to cancel [Child 2]’s enrolment on the date of the letter. The writer confirmed that [Child 2]’s enrolment had been cancelled because the school considered that his behaviour amounted to a refusal to participate in the education program provided by the school, his attendance rate was 16% and he was behind in class work and had not completed assessments for any of his subjects.
[Child 2]’s school enrolment was cancelled on 8 March 2016; however, Ms Rybacki was entitled to continue receiving FTB until 29 March 2016 because [Child 2] had not yet reached 16 years of age. Once [Child 2] turned 16 on 29 March 2016 he could only be Ms Rybacki’s FTB child if he was a senior secondary school child pursuant to subsection 22B of the Act.
It is clear that [Child 2] could not be taken to be a senior secondary school child on the basis that he was undertaking full-time study. Ms Rybacki told the Tribunal that at the time, [Child 2] was not interested in school. As an alternative Ms Rybacki had tried, without success, to encourage [Child 2] to seek work. Ms Rybacki said that [Child 2] was struggling and he was rebelling and getting up to no good.
In relation to whether [Child 2] should be taken to be a senior secondary school child pursuant to subparagraph 22B(2)(b)(iii) of the Act on the basis that he lacked the capacity to undertake full-time study as a result of a physical, psychiatric or intellectual disability or a learning disability, Ms Rybacki told the Tribunal:
·[Child 2] had diagnoses of attention deficit hyperactivity disorder (ADHD) and conduct disorder. His ADHD was not managed as he would not take medication. He is also dyslexic.
·[Child 2] started but was only able to complete the first 2 weeks of year 11.
·When he would go to school, he would go to the guidance counsellor and then spend his time in a special room where the troubled kids would go.
·Mentally, he was unable to go to school.
·Ms Rybacki received carer allowance for [Child 2] until it was cancelled on his 16th birthday.
While [Child 2]’s ability to engage with school was no doubt impacted by his experience of ADHD, conduct disorder and dyslexia, there is insufficient evidence before the Tribunal to establish that [Child 2] lacked the capacity to undertake study as a result of his conditions. For instance, while Ms Rybacki’s receipt of carer allowance is consistent with [Child 2] having a lived experience of disability, this alone does not establish that he did not have capacity to undertake full-time study in an approved course.
In relation to whether there were special circumstances which made it unreasonable to require that [Child 2] undertake an approved course, allowing him to be taken to be a senior secondary school child pursuant to paragraph 22B(2)(c), the Tribunal notes the following evidence from Ms Rybacki, in addition to the matters already discussed above:
·At the beginning of the debt period and up until February or March 2017 Ms Rybacki and [Child 2] were homeless. Prior to their experience of homelessness, [Child 2] had been attending school. They had been living in a home owned by the relative of a friend without a formal lease in place. However, Ms Rybacki had struggled to afford the rent without rent assistance, as the lessor would not sign a rent certificate. When the lessor proposed to increase the rent in 2015, Ms Rybacki and [Child 2] left. They would have no stable housing until around February 2017 when Ms Rybacki was offered a tenancy by Department of Housing.
·In the interim, [Child 2] slept at Ms Rybacki’s parents’ home but this was not an ideal environment. Ms Rybacki’s father was in late-stage dementia and was receiving care at home from her mother. Ms Rybacki’s father would become upset and would kick [Child 2] out of the house. On one occasion police were called and this resulted in a child safety notification. Ms Rybacki had to satisfy the Department of Child Safety that [Child 2] was safe and that he was not living on the street while she worked on securing accommodation for them so that he did not become subject to a child safety order. Ms Rybacki said that during this period her father’s dementia was deteriorating. She said that these matters took a significant toll on [Child 2]. She considers that he is still impacted by this today.
·Ms Rybacki did not have a good relationship with her father and it was not feasible for her to stay at her parents’ house. Sometimes she would stay over but it was too much. She received mail at her parents’ home but she would sleep in her car, or at a friend’s house. At this time Ms Rybacki was receiving newstart allowance.
·In late 2015 [Child 2] got in trouble, and was charged with offences. He completed 20 hours of community service in early 2016.
·In January 2016 Ms Rybacki discovered she was 3 months pregnant with [Child 2]’s sister, [Child 1]. [Child 1]’s due date was in late July or early August 2016 but ultimately Ms Rybacki was induced as she was not coping with the pregnancy. At the time, she was experiencing an exacerbation of depression and she felt like nothing was going right, and that she had made some bad decisions. Her relationship with [Child 1]’s father was volatile and she knew it was not going to work out. The prenatal clinic at the hospital kept an eye on Ms Rybacki, knowing that she was homeless and also being concerned that she was experiencing domestic violence. She was advised that due to her age, her pregnancy was high risk and she also developed a condition which would eventually lead to her grant of disability support pension in 2022.
·[Child 2] received no financial or practical support from his father through this period as he was imprisoned in 2013. Ms Rybacki received no child maintenance to assist with [Child 2]’s costs while he was in prison.
The Tribunal notes that the adults in [Child 2]’s life had limited capacity to provide him with the support that would have been necessary for him to engage with school in 2016 and 2017, bearing in mind his impairments and prejudicial experiences. Ms Rybacki was homeless, unwell and struggling with an unplanned, difficult pregnancy and was then caring for [Child 2]’s newborn sister. His grandmother was acting as a carer to his grandfather whose dementia was deteriorating. His father was in prison. Having had his enrolment at [School] cancelled he was further alienated from the supportive structures that formal schooling might otherwise offer to a young person and there was little scope for [Child 2] to be effectively supported to engage with alternative educational options.
On the background of the above matters, the Tribunal is satisfied there were special circumstances which made it unreasonable to require that [Child 2] undertake an approved course of education or study as per paragraph 22B(2)(c) of the Act from 29 March 2016 up until 31 May 2017, 3 months after he and Ms Rybacki were housed after a lengthy period of secondary and tertiary homelessness.
The practical effect of this decision is that no debt arises in the period 29 March 2016 to 30 June 2016 when Ms Rybacki received FTB for [Child 2] only. Between 1 July 2016 and 30 June 2017, Ms Rybacki received FTB for [the children] and the debt amount reflected retrospective changes to Ms Rybacki’s maintenance income as well as Centrelink’s decision concerning [Child 2]’s engagement with study. Orders that require Centrelink to recalculate the debt arising between 1 July 2016 and 30 June 2017 on the basis that [Child 2] was a senior secondary school child from 1 July 2016 to 31 May 2017 will still likely result in a debt, albeit a smaller one. For this reason, it is appropriate to consider whether such a debt should be recovered.

Issue 2 – Whether the debts should be recovered

The family assistance law allows Centrelink to forgo recovery of some debts.
Section 95 of the Administration Act sets out circumstances in which debts may be written off, whereby recovery is not pursued for a set period or otherwise.
The Administration Act also sets out provision for waiver of debts in specified circumstances, such as section 97 which provides for waiver due to administrative error. The administrative error waiver is of little relevance in the current matter. Any debt which remains after recalculation on the basis that [Child 2] was a senior secondary school child until 31 May 2017 is attributable either to the retrospective increase of Ms Rybacki’s maintenance income or to the fact that she was yet to advise Centrelink that [Child 2] had ceased study. Centrelink administrative error is not the cause of the debts.
More relevant to the current review is section 101 of the Administration Act, which provides for waiver in special circumstances:
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.
The special circumstances waiver would not be able to be applied if the debt arose, even in part, because Ms Rybacki or another person knowingly made a false statement or knowingly failed to comply with social security law.
Ms Rybacki’s debts arose after she told Centrelink on 9 August 2017 that [Child 2] had ceased full-time study in March 2016. Ms Rybacki told the Tribunal that during the period of the debts she had understood that she was entitled to receive FTB for [Child 2] until he was 18 years of age, so long as he was in her care. She did not know that [Child 2]’s engagement with education impacted her entitlement to FTB. As a result, she did not realise that she should contact Centrelink and declare that [Child 2]’s enrolment had been cancelled. She told the Tribunal that if she had known more, she would have applied for [Child 2] to be exempt from the requirement to study.
Notices sent to Ms Rybacki by Centrelink during the period of the debts advised that she must tell Centrelink if a child for whom she was receiving FTB “starts or stops primary or secondary study (full or part-time)”. However, for much of the period of the debts, Ms Rybacki was homeless. Her Centrelink letters were sent to the home of a friend, but she does not remember receiving many of those letters at all.
The Tribunal is satisfied, on the evidence, that no part of Ms Rybacki’s debts arose because she or another person knowingly made a false statement or representation, or knowingly failed or omitted to comply with the family assistance law.
Waiver under section 101 of the Administration Act also requires that it is more appropriate to waive recovery of a debt than to write it off. Debts can be written off under subsection 95(2) of the Administration Act only in specified circumstances, none of which apply in Ms Rybacki’s case. In particular, paragraph 95(2)(b) provides that a debt may be written off where the debtor has no capacity to repay the debt. Ms Rybacki has already repaid the debts which are the subject of this review so it cannot be said that she has no capacity to repay.
The waiver also requires that there are special circumstances in the case (other than financial hardship on its own) which make it desirable to waive the debt. What amounts to special circumstances is not set out in the legislation. The case law indicates that whether the Tribunal can find that there are special circumstances depends on whether the circumstances distinguish the case from the usual run of cases.[4] There must be something about the circumstances that are unusual or out of the ordinary in a way that makes the application of the usual rules unfair, or unjust.[5] However, the circumstances do not need to be exceptional.[6]
[4] Dranichnikov v Centrelink [2003] FCAFC 133 at para 66.
[5] Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones [2012] FCA 639 at para 51.
[6] Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25 at para 33.
In addition to the matters which satisfied the Tribunal that there were special circumstances which made it unreasonable to require that [Child 2] undertake an approved course, the following matters are noted:
·Ms Rybacki’s circumstances have continued to be challenging and in 2020 she experienced a mental health crisis.
·In 2021 her relationship with [Child 2] was breaking down. Earlier in that year, police applied for and obtained a domestic violence order in Ms Rybacki’s favour which also named [Child 1]. The order provided that [Child 2] was not to make contact with Ms Rybacki or [Child 1]. [Child 2] would later breach the order. Ms Rybacki and [Child 2] have just started speaking again.
·Ms Rybacki has also struggled with the conduct of Federal Court matters involving [Child 1]’s father and concerning [Child 1]’s care. [Child 1] was out of Ms Rybacki’s care for some months. A domestic violence order was made against [Child 1]’s father in late 2020. These matters have had an adverse impact on [Child 1], who is now 8 years old. For a time, [Child 1] was attending with a counsellor and this was beneficial. Ms Rybacki has just found a new counsellor near to their home so that [Child 1] can obtain counselling support again.
·In 2022 Ms Rybacki was granted disability support pension in relation to her mental health as well as a chronic and incurable [condition] she developed during her pregnancy with [Child 1]. It is more than 10 years since she engaged in paid work.

The Tribunal is satisfied that the totality of these matters, in addition to those already discussed, make it desirable to waive, under section 101 of the Administration Act, any debt or debts which might exist following recalculation of the debts on the basis [Child 2] was a senior secondary school child as per paragraph 22B(2)(c) of the Act from 29 March 2016 to 31 May 2017.

DECISION

The Tribunal sets aside the decision under review and remits the matter for reconsideration in accordance with the order that:

Between 29 March 2016 and 31 May 2017 [Child 2] was a senior secondary school child in accordance with paragraph 22B(2)(c) of the A New Tax System (Family Assistance) Act 1999, and
The Commonwealth’s right to recover any debt arising after reconsideration on this basis is waived under section 101 of the A New Tax System (Family Assistance) (Administration) Act 1999 on the basis of special circumstances.

Date(s) of hearing:

Wednesday, 27 November 2024