Scriver and Secretary, Department of Social Services (Social security)

[2025] ARTA 761

Scriver and Secretary, Department of Social Services (Social security) [2025] ARTA 761 (13 May 2025)

Applicant/s:  Ms Scriver

Respondent:  Secretary, Department of Social Services

Tribunal Number:   2025/B193016 

Tribunal:  General Member L Manville

Place:Brisbane

Date:13 May 2025

Decision:The Tribunal affirms the decision under review.

CATCHWORDS

SOCIAL SECURITY – Family Tax Benefit top up and supplement payments – income tax return not lodged by cut-off date – special circumstances preventing lodgement – financial circumstances – separation and no payments by former partner toward mortgage – preliminary tax assessment showed possible debt – mental health and treatment – decision under review affirmed

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

1. This review concerns a decision of Services Australia (Centrelink) not to pay the full amount of family tax benefit (FTB) and supplement payments.

2. On 15 August 2024, Centrelink decided not to pay Ms Scriver an FTB top up and supplement payments for the 2022/23 financial year on the basis that she had not lodged her income tax returns by the lodgement cut-off date of 30 June 2024.  Ms Scriver lodged her income tax return for the 2022/23 financial year on 14 August 2024.

3. Ms Scriver requested an internal review of the decision and on 14 January 2025, an authorised review officer affirmed the original decision.

4. On 28 January 2025, Ms Scriver made an application to the Administrative Review Tribunal for review of the authorised review officer’s decision.

5. A hearing was conducted on 7 May 2025.  Ms Scriver participated in the hearing via MS Teams audio conference and gave affirmed evidence.  

6. The Tribunal had regard to the evidence given and the submissions made by Ms Scriver at the hearing, the documents produced by Centrelink pursuant to section 23 of the Administrative Review Tribunal Act 2024 numbered as pages 1 to 96 (the hearing papers).  Ms Scriver confirmed that she had received the hearing papers prior to the hearing.

ISSUES

1. The statutory provisions relevant to this application for review are found within the family assistance law, in particular the A New Tax System (Family Assistance) Act1999 (the Act) and the A New Tax System (Family Assistance) (Administration) Act 1999 (the Administration Act).

2. The issue that arises in this case is whether the decision not to pay Ms Scriver FTB top up and supplement payments for the 2022/23 financial year was the correct legal decision.

CONSIDERATION

1. Subsection 58(1) of the Act provides that a person’s annual rate of FTB is to be calculated in accordance with the Rate Calculator in Schedule 1 to the Act. The rate is an annual rate payable as a lump sum at the end of a financial year based on actual assessable family income[1] or by fortnightly instalment in advance throughout the year based on an estimated family income.[2]  An income year is a period that starts on 1 July and ends on 30 June in the next calendar year.

   [1] Section 17 of the Administration Act.

   [2] Section 16 of the Administration Act.

2. Sections 28 to 32A of the Administration Act deal with the reconciliation requirements to meet eligibility for FTB payment. Those provisions provide, in effect, for the cancellation of FTB when a claimant has not met the reconciliation requirements by failing to lodge an income tax return with the Australian Taxation Office, if required to so lodge, within the particular time required. The period of time within which a claimant must lodge the income tax returns to facilitate the reconciliation process is within the income year after the income year under assessment.

3. Where a claimant does not comply with section 28 of the Administration Act, the Secretary must vary a determination so that it has the effect that the claimant is not, and never was, entitled to FTB for the days before the lodgement period lapsed.

4. The Tribunal is satisfied, and so finds, that on 25 March 2024 a notice was sent to Ms Scriver that advised that she was required to confirm her family income for the financial year of 2022/23 by 30 June 2024.  The Tribunal is further satisfied, and so finds, that Ms Scriver lodged the relevant income tax return on 14 August 2024.

5. Subparagraph 32D(1)(c)(ii) of the Administration Act allows the Secretary to extend the period for lodgement of a return for the purposes of reconciliation if satisfied that there are special circumstances that prevented the individual from lodging the return before the end of the first income year.

6. The term “special circumstances” is not defined in the legislation.  The Federal Court and the Tribunal (formerly known as the Administrative Appeals Tribunal) have considered the issue of special circumstances on several occasions within the context of the raising and recovery of social security debts and have consistently said that the decision-maker must determine whether the circumstances were such that it would be unjust, unreasonable, or inappropriate.  In particular, the Full Court of the Federal Court in the matter of Dranichnikov v Centrelink[3] determined that whether there are special circumstances in a particular case is dependent on whether there are circumstances that would distinguish the case from the usual or ordinary case.[4]

   [3] [2003] FCAFC 133.

   [4] Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541 (per Kiefel J).

7. For the time of lodgement to be extended special circumstances must have prevented the person from lodging a return by the required date.  In Grasso and Secretary, Department of Social Services,[5] the Tribunal found that the word ‘prevented’ should be given its plain English meaning and that the person must somehow have been stopped or hindered from doing what needed to be done.  In Synnes and Secretary, Department of Social Services,[6] the Tribunal remarked: 

   The Tribunal considers this is an onerous requirement, as it is not enough for an individual to merely show that the special circumstances made it difficult or challenging for the tax returns to be lodged within the required time frame. The special circumstances must have been such that they acted as an insurmountable block or impediment to prevent the lodgement from taking place within that time.

   [5] (Social Services second review) [2015] AATA 1017.

   [6] [2019] AATA 338.

8. Ms Scriver told the Tribunal that in April 2023 she separated from her partner with whom she was sharing a property.  On separation, she moved to another home owned by her and since that time, her former partner has refused to make any financial contributions towards the mortgage and she has, resultantly, been under considerable financial hardship.  Since then Ms Scriver has been engaged in a property settlement dispute with her former partner.

9. Ms Scriver did not dispute that she received the notice regarding the cut-off date for lodgement of her return and that she lodged her return on 14 August 2023 – about 8 weeks after the cut-off date.  Ms Scriver told the Tribunal that she had received taxation advice about her 2022/23 income tax return and the preliminary taxation assessment indicated that she might incur a taxation debt of about $2,000.  Ms Scriver delayed lodgement of her return until she was in a financial position to pay any taxation debt that may be incurred.  The Tribunal accepted Ms Scriver’s explanation that she did not appreciate the effect that late lodgement would have on her FTB entitlement because she had not read the notice that Centrelink had sent her advising of those consequences. 

10. Documentary evidence before the Tribunal confirmed that Ms Scriver has a history of depression and is currently under the treatment of her general medical practitioner.  She has previously received treatment from a psychologist.  Ms Scriver told the Tribunal that her symptoms were exacerbated by her financial stressors and relationship breakdown and that she was not in the ‘right mind’ to attend to the lodgement of her income tax return.

11. The Tribunal is satisfied, and so finds, that the decision to lodge her taxation return late was a conscious decision made by Ms Scriver to delay a taxation debt that she expected would be incurred, albeit a decision made at a time when Ms Scriver was experiencing significant financial pressure and impaired mental health.  The Tribunal has not been satisfied that special circumstances existed that ‘prevented’ the lodgement of Ms Scriver’s return by the required date.

12. The Tribunal finds that the time within which Ms Scriver was required to lodge her 2022/23 income tax returns cannot be extended and, therefore, Ms Scriver was not eligible for the reconciled top up and supplement payments of FTB for the 2022/23 financial year.

13. The decision not to pay Ms Scriver an FTB top up and supplement payments for the 2022/23 financial year was the correct legal decision.

DECISION

The Tribunal affirms the decision under review.

Date(s) of hearing:	Wednesday, 7 May 2025
Representative for the Applicant:	Self-represented