Sanderson; Secretary, Department of Social Services and (Social security second review) - [2025] ARTA 1002

Sanderson; Secretary, Department of Social Services and (Social security second review) [2025] ARTA 1002 (12 May 2025)
Applicant/s:  Secretary, Department of Social Services
Respondent:  Ms Julie Sanderson
Tribunal Number:                2024/2395

Tribunal:Senior Member J Longo
Place:Melbourne
Date:12 May 2025

Decision:The Tribunal sets aside the decision under review and remits the matter for reconsideration in accordance with the order that the Respondent is not entitled to be paid family tax benefit with effect from 1 July 2020.

........................... [SGD].............................................
Senior Member J Longo
Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 161(1B)–161(1C) of the A New Tax System (Family Assistance) (Administration) Act 1999.
Catchwords
Family tax benefit – eligibility – income used to assess rate of family tax benefit – whether indexed estimate of income should apply – whether rate of family tax benefit greater than nil – decision affirmed
Legislation
A New Tax System (Family Assistance) Act 1999 (Cth)
A New Tax System (Family Assistance) (Administration) Act 1999 (Cth)
Electronic Transactions Act 1999 (Cth)
Cases
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
G v MIBP [2018] FCA 1229
Paoli v Secretary, Department of Social Services [2021] AATA 1703
Secretary, Department of Social Services v Schuh [2022] AATA 53
Riediger v Secretary, Department of Social Services [2024] AATA 118
Secondary Materials
Family Assistance Guide
Statement of Reasons
BACKGROUND

This application is about whether family tax benefit is payable for the 2020-21 financial year to the Respondent.
Family tax benefit is a payment paid to assist with the costs of a child or children. It is paid to a recipient where they have the care of a child or children. The level of entitlement depends, amongst other things, on the total family income for each financial year.
Usually, a recipient will estimate their income at the start of the financial year and if it is under the income cut-off threshold for the payment of family tax benefit, the recipient will be paid an amount of family tax benefit by way of fortnightly instalment. A recipient can also elect to receive the family tax benefit payment as a lump sum after the end of the financial year.
On 21 May 2020 the Respondent was asked by Services Australia (the Agency), in writing, to update her family income estimate for the 2020-21 financial year by 14 June 2020. The notice stated that she could provide an estimate or rely on the estimate calculated by the Agency of $104,873. The notice further stated that if the Respondent wished to rely on the estimate as calculated by the Agency, then no further action was required from the Respondent and the Agency would use the estimate from 1 July 2020.
A further notice dated 4 June 2020 asked the Respondent to update her estimate by 24 June 2020 for the 2020-21 financial year. The notice advised once again that the Respondent could provide a family income estimate or rely on the Agency calculated family income of $106,510 for the 2020-21 financial year.
On 18 June 2020, the Agency decided as follows:
Your Family Tax Benefit has been cancelled from 1 July 2020 because your and/or your partner's estimated income for the current financial year is too high.
On 12 August 2022, the Respondent requested review of the decision made on 18 June 2020. On 4 October 2022, an authorised review officer decided that it did not have jurisdiction to review the original decision as the Respondent did not seek review within 52 weeks of receiving the notice of the original decision.[1]
[1] T5, pages 24-25
On 22 September 2023, the Respondent sought review of the decision by the Social Services and Child Support Division (first review) of the Administrative Appeals Tribunal (the AAT). On 4 March 2024, the first review of the AAT set aside a decision of a delegate of the Applicant and decided that the Respondent’s family tax benefit is not cancelled with effect from 1 July 2020.
The Applicant sought review of the decision on 11 April 2024 with the General and Other Division of the AAT (second review) and sought a stay order in respect of the first review decision dated 4 March 2024. On 5 August 2024, the AAT granted an order to stay the implementation of the first review decision.
The application for second review was heard on 10 February 2025. The Applicant was represented by a legal representative from the Agency and the Respondent was self-represented. After the hearing, the Tribunal made a direction for the Applicant to provide a Supplementary Statement of Facts, Issues, and Contentions addressing issues which arose during the hearing. The Supplementary Statement of Facts, Issues, and Contentions was provided to the Tribunal and the Respondent on 4 March 2025.
For the reasons that follow, I have set aside the decision under review. In making this decision, I took into account the Applicant’s initial Statement of Facts, Issues and Contentions, the Supplementary Statement of Facts, Issues, and Contentions and written submissions from the Applicant. I also considered the chronology provided by the Respondent in this matter and the documents filed by the Applicant and provided to the Respondent.[2]
[2] T-documents, pages 1 to 101; Supplementary T-document pages 102-112.
ISSUES
The issues that arise in this application are whether:
· There is jurisdiction to review the decision that the Respondent was no longer eligible for family tax benefit from 1 July 2020; and, if so
· The Respondent ceased to be eligible for family tax benefit from 1 July 2020.
CONSIDERATION
The legislation relevant to this matter is the A New Tax System (Family Assistance) Act 1999 (Cth) (the Act) and the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (the Administration Act). In conducting this review, I may also have regard to the Family Assistance Guide (the Guide) where relevant, so long as what it contains is lawful. However, I am not bound to follow it.[3]
[3] Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634; G v MIBP [2018] FCA 1229.
The Applicant has accepted, in the written submissions, that I have jurisdiction to review the original decision as it is an ‘excepted decision’ under paragraph 109D(6)(a) of the Administration Act, and therefore not subject to the time limit under subsection 109D(1) of the Administration Act. I agree that I have jurisdiction and that the first review correctly determined that it had jurisdiction to review the original decision and the authorised review officer decision.
Subsection 21(1) of the Act provides the eligibility criteria for family tax benefit as follows:
(1) An individual is eligible for family tax benefit if:
(a) the individual:
(i) has at least one FTB child; or
(ii) has at least one regular care child who is also a rent assistance child; and
(b) the individual:
(i) is an Australian resident; or
(ia) is a special category visa holder residing in Australia; or
(ii) satisfies subsection (1A) or (1B); and
(c) the individual’s rate of family tax benefit, worked out under Division 1 of Part 4 but disregarding reductions (if any) under clause 5 or 25A of Schedule 1 and disregarding section 58A and subclauses 31B(3), 38AA(3) and 38AF(3) of Schedule 1, is greater than nil.
As part of the criteria for eligibility for family tax benefit, paragraph 21(1)(c) of the Act requires that an individual’s rate of family tax benefit as calculated is greater than nil.
Section 31C of the Administration Act provides as follows:
(1) If:
(a) a determination is in force under which a claimant is entitled to be paid family tax benefit by instalment; and
(b) the Secretary gives the claimant a notice under subsection 20A(2); and
(c) the claimant does not, before the start day specified in the notice, give the Secretary an estimate of the claimant’s adjusted taxable income that the Secretary considers to be reasonable; and
(d) if the claimant’s rate of family tax benefit were calculated using the indexed estimate stated in the notice—a new rate of family tax benefit would be required;
the Secretary may vary the determination so that the claimant’s rate of family tax benefit is determined on the basis of the indexed estimate stated in the notice.
Note: Section 20C affects the meaning of this provision for members of couples.
(2) The variation has effect:
(a) from the start day specified in the notice for the indexed estimate; or
(b) if the variation is made after that start day—from the later of the start day and the first day of the instalment period in which the variation is made.
The Applicant submits that section 31C of the Administration Act allows the Agency to make a determination to vary the rate of family tax benefit by instalment such that their rate is determined on an indexed estimate of family income. The Applicant further submitted that if the Agency has issued notices, as were sent to the Respondent on 21 May 2020 and 4 June 2020, and the notices refer to an indexed estimate of family income of their income to be used from a certain date, the indexed estimate of family income will be used to determine a new rate of family tax benefit from the date specified if the Respondent did not provide a reasonable estimate of the family income before the date specified in the notice.
The Applicant submitted that the first notice sent on 21 May 2020, which recorded the Respondent’s indexed estimated family income of $104,873, stated that this indexed estimate of family income would apply from 1 July 2020 if the Respondent did not reply by 14 June 2020. The second notice sent on 4 June 2020, which recorded the Respondent’s indexed estimated family income as $106,510, stated that this indexed estimate of family income would apply from 1 July 2020 if the Respondent did not reply by 24 June 2020.
The Applicant submitted that the Agency must vary the determination that the person is either no longer eligible for family tax benefit or still eligible but eligible for a different rate than previously determined due to the occurrence of an event.
Subsection 31(1) of the Administration Act provides as follows:
(1) If:
(a) a determination is made under section 16 that a claimant is entitled to be paid family tax benefit by instalment; and
(b) after the determination is made an event occurs; and
(c) when the Secretary becomes aware of the occurrence, the Secretary considers that, if he or she were making the determination immediately after the occurrence, he or she would conclude:
(i) that the claimant was no longer eligible for family tax benefit; or
(ii) that the claimant was still so eligible but that the rate of family tax benefit should be a different rate to the rate previously determined;
the Secretary must, subject to subsection (2):
(d) if subparagraph (c)(i) applies—vary the determination so that the claimant is not entitled to be paid family tax benefit with effect from the date of occurrence; and
(e) if subparagraph (c)(ii) applies—vary the determination so as to establish the different rate with effect from the date of occurrence.
(1A) For the purpose of subsection (1), the occurrence of an event includes the expiration of a period of time if the expiration of that period is relevant to the operation of this Act.
(1B) The reference in subsection (1) to the occurrence does not include the occurrence of any event:
(a) that causes the claimant to provide a revised estimate of the claimant’s adjusted taxable income to the Secretary; or
(b) that causes the Secretary to revise an estimate of the claimant’s maintenance income; unless:
(c) the event also affects the claimant’s eligibility for family tax benefit, or the rate of family tax benefit payable to the claimant, for a reason other than the amount of the claimant’s adjusted taxable income or maintenance income; or
(d) the event is the claimant’s becoming, or ceasing to be, a member of a couple.
The Applicant submitted that the cumulative effect of subsection 31(1) and section 31C of the Administration Act and paragraph 21(1)(c) of the Act was that the Respondent was no longer eligible for family tax benefit from 1 July 2020.
The Applicant submitted that the Agency issued notice to the Respondent on 4 June 2020, sent to the Respondent’s myGov inbox, was deemed to have been received on 8 June 2020 as she was notified of the notice via email on this date, in accordance with subsection 14A(1) of the Electronic Transactions Act 1999 (Cth).[4]
[4] Page 105 of the supplementary T-documents.
I find that the relevant notice in this matter is the notice sent to the Respondent on 4 June 2020, as this notice replaces the previous notice of 21 May 2020 and provides an updated indexed estimate of family income to be used by the Agency in relation to the Respondent’s family tax benefit if no estimate is provided. I accept the submission from the Applicant that the Respondent is deemed to have received the notice issued by the Agency on 8 June 2020 irrespective of whether they viewed the notice, in accordance with previous decisions of the AAT.[5]
[5] As per Paoli v Secretary, Department of Social Services [2021] AATA 1703 (at para [34]); Secretary, Department of Social Services v Schuh [2022] AATA 53 (at para [52]; and Riediger v Secretary, Department of Social Services [2024] AATA 118 (at para [36]).
I discussed the letters received from the Applicant on 21 May 2020 and 4 June 2020 with the Respondent.[6] I asked whether the Respondent recalled the letters. The Respondent’s evidence was that she could not recall receiving the letters or how they were received from the Agency. She said that the majority of the time, she left it to the Agency to determine the income estimate because she had elected to receive a nil rate of family tax benefit by instalment throughout the financial year. The Respondent stated that this was to avoid the possibility of an overpayment if her husband, who is self-employed, had a very good year and therefore she might be required to repay family tax benefit because of an overpayment. This had happened in the past and so she wished to avoid this occurring again. As a consequence, even if she could recall reading the notice, she would not have contacted the Agency to lodge an estimate of family income because she would not be receiving family tax benefit by instalment during the financial year as she had elected to receive a nil rate for the financial year. I accept that the Respondent did not take any action to notify the Agency of an estimated family income for the financial year commencing 1 July 2020.
[6] Pages 102 to 104 and 106 to 108 of the supplementary T-documents.
As a consequence of the Respondent not advising the Agency of an estimated family income, the Respondent applied an indexed estimate of family income of $108,177.00 from 1 July 2020. This amount, when applied to the Respondent’s rate of family tax benefit, resulted in the rate of family tax benefit being nil. I note that the indexed estimate of $108,177.00 was not the amount advised to the Respondent in the notice on 4 June 2020.
The Applicant submitted that due to a technological issue, the Respondent’s estimated indexed amount of family income was recorded incorrectly as $106,510 in the notice issued on 4 June 2020. The Applicant submitted that the incorrect amount in the notice did not invalidate the notice as the amount in the notice of 4 June 2020 still exceeded the family tax benefit income threshold for eligibility from 1 July 2020.
I accept that the indexed estimate of family income amount in the notice of 4 June 2020 was higher than the family tax benefit income threshold and would have resulted in a rate of family tax benefit of nil. I am also satisfied that the Agency varied the determination under section 31C of the Administration Act to determine the rate of the Respondent’s family tax benefit on the basis of the indexed estimate of family income of $108,177.00. As a consequence, as the rate of family tax benefit was not greater than nil as required under paragraph 21(1)(c) of the Act, the Respondent was not eligible for family tax benefit from 1 July 2020 and the Agency was required, in accordance with subsection 31(1) of the Administration Act, to determine that the Respondent was no longer entitled to family tax benefit from 1 July 2020.
The notice to the Respondent which purported to ‘cancel’ family tax benefit did not specify the income used. I accept that the actual indexed estimate of family income used in the decision on 18 June 2020 and sent to the Respondent advising that family tax benefit was ‘cancelled’, was the higher indexed estimate of family income than used in the notice of 4 June 2020. However, on either amount of indexed estimate, the amounts were above the income threshold from 1 July 2020. The Respondent’s evidence was that the amount of the estimate of family income was left to the Agency to determine and they would not have contacted to advise otherwise, as they had elected to be paid a nil rate of family tax benefit from 1 July 2020.
CONCLUSION
It is unclear as to the legislative basis which allows for the Respondent to elect a nil rate during the financial year and to receive the family tax benefit as a lump sum at the end of the financial year. The Guide allows for a family tax benefit recipient to make such a choice and contemplates that the payment of family tax benefit by instalment be received by way of a lump sum at the end of the relevant year.[7] I find that the choice by the Respondent to receive family tax benefit by instalment as a lump sum payment at the end of the relevant year does not affect the decision on 18 June 2020 by the Agency which determined that the Respondent was not entitled to family tax benefit from 1 July 2020.
[7] See Chapter 4.3.1.20 – FTB payment choices of the Guide.
As a determination was made on 18 June 2020 by the Agency that the Respondent was not entitled to family tax benefit from 1 July 2020, it was open to the Respondent to test their eligibility for family tax benefit for the 2020-21 financial year by making a further claim for family tax benefit.
I note that the documents provided by the Applicant contain such a claim for family tax benefit for the 2020-21 financial year.[8] This claim was not determined, according to the documents provided by the Applicant, until 24 September 2024, when the Agency notified the Respondent of a decision not to pay family tax benefit for the 2020-21 financial year because the claim was not received by 30 June 2022.
[8] T6
Subsections 10(1), (2) and (2A) of the Administration Act provide as follows:
Restrictions on claims for payment of family tax benefit for a past period
Restriction where previous claim or instalment determination
(1) A claim for payment of family tax benefit for a past period is not effective if:
(a) the claimant has previously made a claim for payment of family tax benefit for any of the past period (whether or not the claim has yet been determined); or
(b) the claimant was entitled to be paid family tax benefit by instalment at any time in the past period; or
(c) the following apply:
(i) a determination under section 16 was in force at any time in the past period under which the claimant was not, because of a variation of the determination under subsection 27(5), 27A(3), 28A(2), 28B(2), 28B(3), 29(2), 30(2), 30A(2) or 30B(2), entitled to be paid family tax benefit;
(ii) the claim is made before the end of the income year following the one in which the variation mentioned in that subsection took effect.
Claim must relate to one income year and be made within a certain period
(2) A claim for payment of family tax benefit for a past period is not effective if:
(a) the period does not fall wholly within one income year; or
(b) the period does fall wholly within one income year (the relevant income year ) but the claim is made after the end of:
(i) the first income year after the relevant income year; or
(ii) such further period (if any) as the Secretary allows, if the Secretary is satisfied that there are special circumstances that prevented the claimant from making the claim before the end of that first income year.
(2A) The further period referred to in subparagraph (2)(b)(ii) must end no later than the end of the second income year after the relevant income year.

I note that this decision has not been internally reviewed by the Agency. It is open to the Respondent to seek further review of this decision and, given the claim was made on 24 October 2022 by the Respondent, whether there are special circumstances which prevented the Respondent from making the claim before 30 June 2022.
As this decision has not been reviewed by the Agency, it is not before me for consideration and I have not made a decision as to whether there are special circumstances which prevented the Respondent from making the claim before 30 June 2022. Any such decision, when made, will have attached to it rights of review.
DECISION
The Tribunal sets aside the decision under review and remits the matter for reconsideration in accordance with the order that the Respondent is not entitled to be paid family tax benefit with effect from 1 July 2020.

Date of hearing: 10 February 2025

Applicant: Mr Tim Noonan, Services Australia

Respondent: Self-represented

Date of hearing:	10 February 2025
Applicant:	Mr Tim Noonan, Services Australia
Respondent:	Self-represented