Sarwar and Secretary, Department of Social Services (Social services second review)

Sarwar and Secretary, Department of Social Services (Social services second review) [2023] AATA 169 (16 February 2023)
Division:GENERAL DIVISION
File Number(s): 2021/7708
Re:Arooj Sarwar
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

Decision
Tribunal:L M Gallagher, Member
Date:16/02/2023
Place:Perth

The Reviewable Decision, being the decision of a delegate of the Respondent dated 21 October 2021 not to pay the Applicant a Family Tax Benefit top-up for the 2018/2019 financial year is affirmed.
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L M Gallagher, Member
Catchwords
SOCIAL SECURITY – Family Tax Benefit (FTB) – FTB payment withheld – Applicant failed to submit an income tax return by required date – Applicant did not advise Agency she was not required to lodge an income tax return – special circumstances not applicable – decision under review affirmed
Legislation
A New Tax System (Family Assistance) Act 1999 (Cth)
A New Tax System (Family Assistance) (Administration) Act 1999 (Cth)
Secondary Materials
Australian Government, ‘Guides to Social Security Law: Family Assistance Guide’ (version 1.243, released 6 February 2023)
REASONS FOR DECISION
L M Gallagher, Member
16 February 2023
the application

On 4 June 2021, a delegate of the Respondent determined not to pay a Family Tax Benefit (FTB) top up to the Applicant for the 2018/2019 financial year, on the basis that the Applicant failed to advise the Agency that she was not required to lodge an income tax return (ITR) for the 2018/19 income year before the cut-off of 30 June 2020 (the Original Decision).[1]
[1]R1, T43.
The Original Decision was appealed and on 22 July 2021, an Authorised Review Officer (ARO) affirmed the Original Decision.[2]
[2]R1, T50.
On 1 October 2021 the Administrative Appeals Tribunal (Social Services & Child Support Division) (AAT1) affirmed the Original Decision (the Reviewable Decision).[3]
[3]R1, T2.
The Applicant seeks review of the Reviewable Decision.
issues
The issues for review by the Tribunal are:
(a)Whether the Applicant advised the Department of Social Services (the Agency) that she was not required to lodge an ITR for the 2018/2019 financial year by 30 June 2020.[4] If so (and only if so);
(b)Whether there were any special circumstances preventing the Applicant from advising the Agency that she was not required to lodge an ITR by 30 June 2020.
[4]The parties accept that the Applicant was not required to lodge an ITR for the 2018/2019 financial year. The Applicant claims she advised the Agency of this by the required date, being 30 June 2020. The Agency claims she did not.
Given that:
(a)The Applicant is not claiming the existence of special circumstances; and
(b)the Tribunal has found the Applicant did not advise the Agency she was not required to file an ITR the Tribunal for the 2018/2019 financial year by 30 June 2020,[5]
the Tribunal is not required to consider whether there were any special circumstances that prevented her from doing so.[6]
[5]See paras [41]-[45] below.
[6]If the Tribunal had found the Applicant provided the required advice by requisite date it would have been required to consider any provisions, submissions and evidence regarding special circumstances. In any event, the Applicant confirmed at hearing that she was not claiming special circumstances and the comments she did make regarding personal circumstances at the time were contextual.
BACKGROUND
During the 2018/2019 financial year, the Applicant was in receipt of fortnightly instalments of FTB payments.[7]
[7]R1, T8, p 36; T12, p 44 and T17, p 59.
On 18 March 2020, the Agency issued a notice to the Applicant via her MyGov account, advising her that she needed to confirm her family income for the 2018-19 financial year. To do this, she and her partner were either required to lodge their 2018/2019 ITRs, or to advise the Agency that she and her partner were not required to lodge their ITRs, by 30 June 2020.[8]
[8]R1, T26, p 77.
The notice provided that:
(a)If this did not occur, the Applicant and her partner would have to repay any FTB paid for the 2018/2019 financial year and that their FTB payments may also stop as a result.
(b)If the Applicant confirmed her family income by 30 June 2020, she may get top ups and supplement payments.
On 20 March 2020 at 2:38:53 pm, a digital read receipt was recorded for the notice sent to the Applicant on 18 March 2020.[9]
[9]R1, T50, p 130.
On 15 June 2020, the Applicant’s partner lodged his ITR for the 2018/2019 financial year.[10]
[10]R1, T56, p 263.
On 1 July 2020, the Applicant gave birth to a daughter.[11]
[11]R1, T31, p 87.
On 9 July 2020, the Applicant contacted the Agency to enrol her newborn daughter in Medicare.[12]
[12]R1, T32, p 88.
On 14 July 2020, the Applicant contacted the Agency regarding her FTB newborn claim.[13] The Agency’s customer contact record states that the Applicant’s FTB newborn claim could not be processed and finalised as there was outstanding reconciliation activity, due to the Applicant’s failure to confirm her family’s income.[14]
[13]R1, T33, pp 91-92.
[14]R1, T33, p 91.
On 27 December 2020, the Agency sent the Applicant a further notice online requesting the Applicant provide a new estimate of her family income within 14 days.[15] The notice confirmed that if the estimate was not provided, the FTB would be cancelled.
[15]R1, T36, p 97.
On 18 January 2021, the Agency made the decision to cancel the Applicant’s FTB entitlement as neither she nor her partner had provided the required income details.[16]

The Applicant was notified of this via a letter on the same day.
[16]R1, T37 p 99.
On 23 April 2021, the Agency notified the Applicant that she had an FTB debt of $5,504.02 due to failing to confirm her family income for the 2018/2019 financial year.[17]
[17]R1, T38, p 101.
On 9 May 2021, the Applicant advised the Australian Taxation Office (ATO) that she was not required to lodge an ITR for the 2018-19 financial year because her income was lower than the tax-free threshold.[18]
[18]R1, T50, p 130.
On 10 May 2021, the Agency advised the Applicant that:[19]
(a)She would be paid the adjusted balance of her FTB for the 2018/2019 financial year ($511.59).
(b)She would not be paid her full FTB entitlement, including the FTB supplement because she had not confirmed her income for the 2018/2019 financial year by 30 June 2020.
[19]R1, T40, p 107.
On 18 May 2021, the Applicant contacted the Agency to discuss her FTB claim.[20] The Applicant’s FTB claim was granted with a start date of 17 January 2021.
[20]R1, T41, p 109-110.
On 3 June 2021, the Applicant lodged her ITR for the 2018/2019 financial year.[21]
[21]R1, T56, p 262.
On 4 June 2021, the Agency made the Original Decision.[22] The Applicant sought a review of this decision.
[22]R1, T43.
On 22 July 2021, the ARO affirmed the Original Decision.[23]
[23]R1, T50, p 125-131.
On 9 August 2021, the Applicant sought a further review of the ARO decision in the AAT1.[24]
[24]R1., T52, p 133-147.
On 1 October 2021, the AAT1 affirmed the decision under review, on the basis that:[25]
(a)It was satisfied that the Applicant did not advise the Agency prior to 30 June 2020 that she was not required to lodge an ITR; and
(b)As a result of the late advice, no FTB top-up payment for the 2018/2019 financial year was payable.
[25]R1, T2, pp 6-9.
On 20 October 2021, the Applicant lodged an application for review of decision with the General Division of the Administrative Appeals Tribunal (the Tribunal).[26]
LEGISLATIve framework
[26]R1, T1, pp 1-5.
Legislation
Eligibility for FTB is provided for in Division 1 of Part 3 of the A New Tax System (Family Assistance) Act 1999 (Cth) (the Act). FTB comprises two parts, Part A and Part B.
[27]Australian Government, ‘Guides to Social Security Law: Family Assistance Guide’ section 1.2.1 (version 1.243, 6 February 2023)
The Family Assistance Guide[27] states that “FTB Part A is designed to help families with the cost of raising children”. The Guide further states that, “FTB Part B provides extra help for single parent families and couple families…with one main income earner”.
Pursuant to s 17 of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (the Administration Act), a recipient can elect to receive their full FTB entitlement after the end of the financial year. Alternatively, a recipient can claim FTB benefits in fortnightly instalments.[28] The calculation of these fortnightly instalments is based on the recipient’s estimate of their income at the start of the financial year.[29]
[28]Administration Act s 16.
[29]Administration Act ss 20, 23.
At the end of the financial year, a reconciliation process occurs where the recipient’s estimated income is compared with their income assessed by the ATO.[30]
[30]Administration Act s 105A.
If the recipient’s income estimate was too low, the individual will have been overpaid FTB which will result in a debt being incurred. If the individual’s income estimate was too high, they are entitled to receive a top-up FTB payment.
At reconciliation, a FTB supplement may be paid. This is a payment that was introduced to offset any minor debts that may occur from slight underestimations made by an individual when predicting their income.
In summary, s 28(3)(c) of the Administration Act provides that where an individual lodges their income tax return for a financial year with the ATO before the end of the following financial year, their FTB entitlement for the previous financial year will be recalculated and an adjustment amount paid to the individual if the amount already paid to them is less than the recalculated amount.
Conversely, s 28(3)(d) of the Administration Act provides that where an individual lodges their income tax return for a financial year with the ATO after the end of the following financial year, then they are only entitled to the lesser of the recalculated amount or the amount already paid to them.
However, these supplements can only be paid when reconciliation conditions are met.[31]
.[31] Administration Act s 32A
The reconciliation conditions to be satisfied are set out in s 32B of the Administration Act, Section 32B provides that if only one of the provisions in ss 32C to 32J applies to a person, the person satisfies the FTB reconciliation conditions at the relevant reconciliation time specified in the relevant provision.
Relevant reconciliation times for lodgement of ITRs
For the Applicant to have satisfied the FTB reconciliation conditions and receive the full FTB entitlement for the 2018/2019 income year, based on her actual combined adjusted taxable income, the Applicant was required to satisfy section 32J of the Administration Act.
Section 32J relevantly states:
32J Relevant reconciliation time—individual not required to lodge an income
tax return
(1) This section applies to the first individual for a same-rate benefit period if:
(a)         the first individual; or
(b)         any other individual whose adjusted taxable income is relevant in                 working out the first individual’s entitlement to, or rate of, family tax   benefit for the same-rate benefit period; is not required to lodge an                    income tax return for the relevant income year.
(2) The relevant reconciliation time is whichever is the earlier of the following times:
(a)         the time after the end of the relevant income year when the first                    individual notifies the Secretary of the amount of the first individual’s   adjusted taxable income for the relevant income year, so long as that             notification occurs before 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 first individual from making that notification before the end of that first income year;
(b)         the time after the end of the relevant income year when the Secretary          becomes satisfied that the first individual’s adjusted taxable income   for the relevant income year can be worked out without receiving a              notification from the first individual, so long as the Secretary becomes             so satisfied before the end of the first income year after the relevant             income year.
evidence
The matter was heard in Perth on 3 May 2022, via telephone. The Applicant was represented by Mr Masood Ashraf, the Applicant’s partner. The Respondent was represented by Mr James Bernasconi, Lawyer at Services Australia.
EVIDENCE BEFORE THE TRIBUNAL
The Tribunal received the following evidence:
·A screenshot of a Centrelink online Account dated 16 November 2021 (“A1”);
·Applicant’s Response to the Respondent’s Statement of Facts, Issues and Contentions (SFIC) dated 23 March 2022 (“A2”);
·Respondent’s T-Documents (T1-T36, 373 pages) dated 23 February 2022 (“R1”);
·Guidance on Special Circumstances document dated 23 December 2021 (“R2”);
·Respondent’s SFIC filed 15 March 2022 (“R3”); and
·Respondent’s Amended SFIC, including list of authorities and supplementary T Documents, dated 13 April 2022 (“R4”).
At hearing, the Applicant provided evidence by telephone.
Having reviewed all the evidence before it, the Tribunal is satisfied that both parties were provided an opportunity to address the evidence. Relevant aspects of the evidence are referred to below.
CONSIDERATION
As noted above, the issue for the Tribunal is whether the Applicant had informed the Respondent of her income for the 2018/19 period, as required by the Act and within the required timeframe.
Whether the Applicant had informed the Respondent of her income for the 2018/2019 period by 30 June 2020
The Applicant contended she did advise the Agency that she was not required to lodge an ITR for the 2018/2019 financial year by 30 June 2020.[32] The Applicant maintains she completed an online task and the fact there are no logs or records of this task held by the Agency represents a system malfunction or administrative error on the Agency’s part.
[32]Transcript p 14 [45].
The Agency contended that:
(a)The Applicant accessed the letter dated 18 March 2020 requesting her to advise the Agency about whether she was required to lodge her ITR at 14.38 on 20 March 2020, evidenced by the digital read receipt.[33]
[33]The Agency explained the underlying process in R4 [8.1] and documents referred to therein.
(a)The Applicant advised the Agency that she was not required to lodge an ITR for the 2018/2019 financial year on 9 May 2021.
(b)Subsequently, the Applicant lodged her ITR for the 2018/2019 financial year on 3 June 2021. Both of these dates were:
(a)After the end of the first income year after the relevant income year; and
(b)Before the end of the second income year after the relevant income year.
(c)The Original Decision was correct.[34]
[34]R4 [4.1]
(d)On 8 March 2022, an officer of the Agency conducted an investigation of whether the Applicant completed the online task ‘not required to lodge an income tax return.’[35] This investigation found that:[36]
[35]R4 [8.2].
[36]R3, R4.
‘there were no line interactions relating to the advice of non-lodgement of a tax return for the 2018/2019 financial year.’
(e)With respect to the notification process, the Agency officer stated that customers presented with a ‘receipt’ page after submitting an update using the online service.[37] The receipt page advises the customer if their update was:
[37]R4 [8.3].
(i)successful and accepted;
(ii)successful but not accepted; or
(iii)unsuccessful.
(f)In the Applicant’s case, the Agency officer’s investigation found that the notifications regarding the status of any relevant updates made by the Applicant would have all been displayed to her whenever she logged into her Centrelink online account or Express Plus Centrelink mobile app. Once the Applicant made the update on 9 May 2021, the task reminders would have no longer been displayed.[38]
(g)Accordingly:
(i)The Applicant was notified that she needed to complete the ‘not required to lodge an income tax return’ online task prior to 30 June 2020, but did not do so.[39]
(ii)There is no evidence that the Applicant notified the Agency that she was not required to lodge an ITR prior to 30 June 2020.[40]
(h)Further, the law does not allow the Respondent to make any exception to the Applicant’s case to pay FTB top up and supplementary payments for the 2018/2019 financial year.[41] The Secretary is bound to administer the family assistance law as it stands, regardless of any perceived fairness this may engender in the Applicant’s mind.
[38]R3, R4.
[39]R4 [8.4].
[40]R4 [8.5]
[41]R4 [8.32].
The Tribunal understands the Applicant’s position that she claims she did provide advice of non-lodgement for the financial year prior to 30 June 2020. However, the Tribunal is of the view it has not been presented with any evidence to confirm this. Further, the Applicant’s evidence is that she does not recall the date (the date or the month) she provided this advice.[42]
[42]Transcript, p15 [20]-[30].
This leaves the Tribunal in a position where the first record that it has of the Applicant advising the Agency that she was not required to lodge an ITR 2018/2019 financial year was on 9 May 2021.[43] This date was corroborated by the Agency’s investigation. The Applicant has taken issue with this date and also the investigation underpinning it, however she has not identified any reasonable basis for the Tribunal to reject the investigation finding or the integrity of the process that led to it.
[43]See, for eg [18].
CONCLUSION
On the available evidence, the Tribunal is not satisfied that the Applicant notified the Agency that she was not required to lodge an ITR for the 2018/2019 financial year by 30 June 2020. For completeness, the Tribunal finds that the Applicant notified the Agency of such on 3 June 2021.
DECISION
The Reviewable Decision is affirmed.

I certify that the preceding forty-seven (47) paragraphs are a true copy of the reasons for the decision herein of L M Gallagher, Member

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Associate
Dated: 16 February 2023

Dates of hearing: 3 May 2022

Applicant: By telephone, self-represented

Representative for the Respondent: Mr James Bernasconi, Services Australia

[2023] AATA 169

16 February 2023

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Procedural Fairness

Jurisdiction

Statutory Construction

Appeal

Natural Justice

Dates of hearing:	3 May 2022
Applicant:	By telephone, self-represented
Representative for the Respondent:	Mr James Bernasconi, Services Australia