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

Case •

[2018] AATA 3271

•

6 September 2018

Sertich and Secretary, Department of Social Services (Social services second review) [2018] AATA 3271 (6 September 2018)

Division:GENERAL DIVISION

File Number(s):      2017/6530

Re:Mary Sertich

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Mark Hyman, Member

Date:06 September 2018

Place:Canberra

The decision under review is affirmed.

............................[sgd]............................................

Mark Hyman, Member

Catchwords

FAMILY ASSISTANCE – family tax benefit - where claim made out of time – special circumstances discretion – whether circumstances were special – whether circumstances prevented lodgement of claim – decision under review affirmed

Legislation

A New Tax System (Family Assistance) (Administration) Act 1999, ss 5, 7, 10, 13, 23, 24

Administrative Appeals Tribunal Act 1975, s 37

Evidence Act 1995, s 160

Cases

Afghani and Secretary, Department of Social Services (Social services second review) [2017] AATA 410

Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25

Beadle and Director-General of Social Security [1984] AATA 176

Bisceglie and Secretary, Department of Social Services (Social services second review) [2016] AATA 294

Burgess and Secretary, Department of Social Services (Social services second review) [2017] AATA 525

Boscolo v Secretary, Department of Social Security [1999] FCA 106

Hooker and Secretary, Department of Social Services (Social services second review) [2015] AATA 732

Robson and Secretary, Department of Social Services (Social services second review) [2016] AATA 1012)

Scott v Secretary, Department of Social Services [2000] FCA 1241

Secretary, Department of Social Services and Dunford (Social services second review) [2016] AATA 567

Secretary, Department of Social Services and Hollis (Social services second review) [2015] AATA 941

Secretary, Department of Social Services and Willersdorf (Social services second review) [2016] AATA 535

REASONS FOR DECISION

Mark Hyman, Member

06 September 2018

  1. This decision is about whether the applicant, Ms Mary Sertich, is entitled to receive family tax benefit (FTB) for the 2014/15 financial year. Decisions by the Department of Human Services (the Department) and subsequently by the Social Services and Child Support Division of this tribunal have found that she was not so entitled because she had lodged her claim out of time and was not entitled to the benefit of the discretion that allows claims out of time to be accepted under certain circumstances. On 3 November 2017 Ms Sertich applied to the tribunal for further review.

  2. The tribunal held a hearing on 13 July 2018. Ms Sertich attended in person, gave evidence and was cross-examined. Mr Jonathan Tsianikas, a departmental advocate, represented the Secretary, Department of Social Services (the Secretary), the respondent in this matter. The tribunal had before it the documents submitted under section 37 of the Administrative Appeals Tribunal Act 1975 (the “T-documents”); a submission by Ms Sertich with attachments comprising a timeline of relevant events (exhibit A1), and a letter and pamphlet from the Department (exhibit A2); and a submission by the Secretary with attachments comprising two notices regarding the period for lodging lump-sum FTB claims (exhibits R1 and R2).

  3. Following the hearing Ms Sertich made a further submission (dated 20 July 2018 but received on 25 July), asking that it be taken into account. The Secretary indicated a wish to reserve a right of reply if the submission were accepted. Ms Sertich is a self-represented applicant, and at the hearing it became clear that she was unfamiliar with tribunal processes and therefore in some ways unprepared for the hearing. It might from that perspective be reasonable to allow a submission to be made following the hearing, once she had had a better opportunity to comprehend what the hearing required of her, provided, of course, the respondent was allowed to reply. On examination, however, it became clear that the late submission includes not only argument but also factual material going beyond that advanced at the hearing, material that had not been subject to cross-examination. That material should have been advanced at the hearing. For these reasons I have not taken the late submission into account in these reasons.

    ISSUES

  4. Ms Sertich does not dispute that she lodged her claim for FTB after the deadline set in legislation. The only issue before the tribunal is whether the provision that allows an extension of the period for lodgement of a claim should apply.

    LEGISLATION

  5. The statutory provisions relevant to this review are set out in the A New Tax System (Family Assistance) (Administration) Act 1999 (the Act).

  6. Family assistance legislation allows FTB to be sought either on an instalment basis or for a past period (sections 7, 23 and 24 of the Act). In each case a claim must be lodged (section 5) and the legislation requires that it be lodged by a particular deadline. Subsection 10(2) of the Act provides that a past period claim is not effective if it is made after the end of the first income year after the income year for which the FTB is being claimed; or under subparagraph 10(2)(b)(ii), after “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”.

  7. Section 13 states that the Secretary must determine an effective claim; and that if a claim is not effective, it is taken never to have been made.

    MS SERTICH’S CLAIM AND SUBMISSION

  8. The facts of the matter are not in dispute. It is not at issue that Ms Sertich lodged her claim for FTB for 2014/15 on 16 September 2016, more than a year after the period (the 2014/15 financial year) for which she was claiming.

  9. Ms Sertich set out in her submission and at the hearing the circumstances that had led to the late claim. She noted that:

    ·She is a single mother, working full time in a responsible and demanding position, with two teenage children.

    ·She claims FTB on a past period basis in order to avoid the possibility of acquiring a debt through overpayment of FTB instalments.

    ·She was accustomed to long delays in payment, because her former partner is often late in lodging a tax return.

    ·In the period in question Ms Sertich was in the later stages of a bitter and difficult end to a relationship of 25 years with her partner (and father to the children); this was the final stage in a long and increasingly stressful period; her former partner’s mental health is fragile and uncertain.

    ·She also ended her relations with his family and there are no members of her own family to whom she could turn for support.

    ·The period in which she would have lodged her claim (approximately January to September 2016) was especially difficult, involving sale of the family home she had shared over a long period with her partner and the children, finding and buying a new home and making it liveable, an especially demanding period in her work requiring international travel and responding to unforeseen work demands, additional emotional support to the children in the context of their parents’ separation, and a deteriorating personal relationship with her former partner as the division of property and access to the children came to be negotiated.

    oThe sale of the house was protracted and difficult as it was a coordinated private sale of her house and that of her neighbour.

    ·Contact with the Department by telephone or online was difficult and frustrating, with long delays and frequent failures. When she eventually went in to the departmental office in person, no advice was given and she was provided with a paper form to complete.

    ·The Department did not at any stage inform Ms Sertich of the deadline for lodgement, contrary to the practice of the Department in earlier years.

    ·Ms Sertich had built the FTB payment into her family budget, now more constrained because of the separation, with resultant financial hardship when it was not paid.

  10. Ms Sertich made a particular point that her experience had led her to expect that any change in the rules applying to FTB would be drawn to the attention of those receiving that benefit. In this case, however, when the legislation was amended in 2013 to reduce the period for making a claim from two years after the relevant income year to one year after, the only advice sent out was a single letter sent in February 2014 (T5, folio 15). Ms Sertich said she had no recollection of receiving that letter, and she noted that on previous occasions when the rules had changed, considerable effort had been made to publicise the changes to those affected by them (exhibit A2). This had not happened in the same way on this occasion and she had not been aware of the change as a result.

  11. In Ms Sertich’s contention, the above constituted special circumstances that enlivened the discretion in subparagraph 10(2)(b)(ii) and warranted the extension of the time allowed for making her FTB claim.

    THE SECRETARY’S POSITION

  12. The Secretary argued that:

    ·Ms Sertich’s circumstances were not so remarkable that they met the “special circumstances” test; the test is an objective one, in the sense that the circumstances must be objectively special and out of the run of usual experience, rather than subjectively special to the person to whom they occur; that test is simply not met in this case, as what occurred to Ms Sertich was representative of the vicissitudes of life as they affect many people;

    ·the Department was under no obligation to go to greater lengths to inform Ms Sertich than it did, and her lack of awareness is not a special circumstance, nor has the Department failed in any duty or denied Ms Sertich any entitlement; the information was in any case publicly available, as illustrated by the material available in that period on the Department’s website (exhibits R1, R2); the letter of February 2014, having been posted to Ms Sertich, is deemed by the law to have been received by her;

    ·any financial hardship from denial of FTB payment is a result of the decision; it cannot be a circumstance contributing to preventing the making of the claim;

    ·even if the circumstances were special (which was not conceded), they did not prevent Ms Sertich from making her claim; she had a full year to do so, and managed a large number of other matters over that time, including lodging a tax return in May 2016. Rather, she failed to make a claim because she was unaware that she was obliged to do so by 30 June.

    CONSIDERATION

    Were Ms Sertich’s circumstances special?

  13. As it is common ground that the claim was made after the deadline of 30 June 2016, the matter turns entirely on the application of the “special circumstances” provision. The phrase “special circumstances” is not defined in the legislation, but the Federal Court and this tribunal have over a long period provided extensive guidance on how it is to be understood. In Beadle and Director-General of Social Security [1984] AATA 176 (Beadle) the tribunal (with a Presidential Member, Toohey J, presiding) stated that the circumstances, to be regarded as special, needed to be “unusual, uncommon or exceptional” (at [12]). The tribunal also noted that:

    … it is not helpful to focus too closely on each particular circumstance of the applicant and ask whether it is special. Of itself it is unlikely to be special for there would be many in a similar situation. The question is whether, when the relevant circumstances of the applicant are looked at in their entirety, they may fairly be described as unusual, uncommon or exceptional …

  14. In Boscolo v Secretary, Department of Social Security [1999] FCA 106 French J noted (at [18]) that (in the context of a provision requiring a “special reason”):

    The word "special" conditioning "reasons" or "circumstances" guards the entrance to the exercise of many different statutory discretions. It is generally futile to search for its meaning in terms of other words. It is in essence instrumental, a direction to the decision-maker that the discretion it constrains is not lightly to be enlivened.

  15. In Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25 the Federal Court (Besanko J) emphasised that it is not the intention of Parliament that the exercise of this discretion be confined to the “exceptional” case, but rather that there must be something that distinguishes the case from the ordinary or usual.

  16. In the FTB context the tribunal (SM Toohey) noted in Hooker and Secretary, Department of Social Services [2015] AATA 732 that the phrasing of the provision regarding late lodgement of a claim requires a dual test: that the “special circumstances” test is met; and that the special circumstances prevented the making of the claim within time. That conclusion is echoed in Secretary, Department of Social Services and Hollis [2015] AATA 941 (DP Humphries) (at [31]-[32]). Put another way, not any special circumstances will do; the circumstances of the particular applicant must not only be special, but must be special in a way so as to prevent the making of the claim by the deadline.

  17. Ms Sertich has put together a case that, taking all that was occurring in her life into account, she was in uncommon and unusual circumstances in the first half of 2016. The breakdown of her long-term relationship, the stresses and strains of buying and selling property, the renovation requirements of her new home, the demands of teenage children, a demanding and testing job – all these were things she needed to cope with simultaneously, and together they took her situation out of the usual and into the realm of the uncommon and unusual. She also argued that the absence of proper notification should be regarded as a special circumstance; that the denial of her claim caused her financial hardship; and that the difficulties of accessing the Department’s services contributed to the circumstances preventing lodgement of the claim.

  18. Mr Tsianikas for the Secretary has pointed out, correctly, that the financial hardship caused Ms Sertich might have been a consequence of the decision not to pay FTB for the relevant year, but hardly a cause of her not making a claim in time. Further, he is right that the Department was not obliged to ensure that Ms Sertich was informed of the change in the deadline for making a claim, and he identified a number of authorities that come to the conclusion that a lack of awareness of the provisions governing the benefit does not constitute a special circumstance (see for example Scott v Secretary, Department of Social Services [2000] FCA 1241; Robson and Secretary, Department of Social Services (Social services second review) [2016] AATA 1012). He has further pointed out that the receipt of the letter is in any case deemed to have occurred, applying subsection 160(1) of the Evidence Act 1995. If the absence of notice and the financial hardship are put to one side, the basis of Ms Sertich’s claim to special circumstances is the sequence of personal challenges attending the end of her relationship with her partner of 25 years, and the obstacles placed in her way by the Department.

  19. I am not sure that Ms Sertich’s case is made out. Modern life comprises a collection of demanding and testing circumstances for many people, and it is unfortunate but unavoidable that relationship breakdown is sufficiently common that it is a normal part of life for many rather than anything remarkable. And when a long term relationship ends, there are inevitable consequences such as emotional upheaval for the partners and children, property settlement, sale of the family home, securing new accommodation, deciding child custody and access, and so on. None of this is unusual or out of the ordinary – rather it is to be expected when a relationship comes to an end. Mr Tsianikas took me to a number of cases where similar circumstances prevailed, including Bisceglie and Secretary, Department of Social Services (Social services second review) [2016] AATA 294 and Burgess and Secretary, Department of Social Services (Social services second review) [2017] AATA 525; but each of these cases turns very much on its own facts and there is a risk in relying on the conclusions of a decision-maker in one case when the facts at hand in the present matter are inevitably different (see the remarks of the tribunal in Beadle on that point).

  20. There is ample information regarding the difficulties many people have in interacting with the Department, by telephone, online or in person. What that information demonstrates, however, is that such difficulties are (unfortunately) usual and ordinary. They cannot contribute to a special circumstances claim.

  21. Taking all of the above into account, my conclusion is that from an objective standpoint Ms Sertich’s circumstances do not appear to stand out from the normal and usual run of cases with the distinction needed to meet the “special circumstances” test.

    Did Ms Sertich’s circumstances prevent her making a claim?

  22. But that is not where Ms Sertich’s case ultimately falls down. The problem with her argument is that it is not at all clear that these circumstances prevented her from making a claim. It is plain that over a sustained period she managed a wide range of demands on her time, as she has elaborated in her submission – selling her house, buying another, managing the outcomes from the separation, the demands of her work – as well as the usual minutiae of a normal life such as paying bills and attending to the bureaucratic requirements of a family, including, as the Secretary notes, lodgement of her tax return in May 2016 (T11, folio 88).

  23. Can it really be said, then, that Ms Sertich’s circumstances prevented lodgement of her tax return? Ms Sertich argued that it could, although in her evidence at hearing she acknowledged that completing the claim form took only a short time, and had she been aware that the deadline was 30 June she would have been able to find the time to complete it. Mr Tsianikas took me to Afghani and Secretary, Department of Social Services (Social services second review) [2017] AATA 410, in which the tribunal drew on the dictionary meaning of “prevent”; but I think the meaning of that word is sufficiently clear that no use of the dictionary is needed in the present matter. Mr Tsianikas also referred to some other cases where in some respects the facts were similar to the present instance, including Secretary, Department of Social Services and Willersdorf (Social services second review) [2016] AATA 535 and Secretary, Department of Social Services and Dunford (Social services second review) [2016] AATA 567, but as noted earlier, each of these cases turns on its own facts. I do not find that the cases quoted establish a point of principle in a way that is helpful to me in deciding the present matter.

  24. Ms Sertich pointed out that some of the earlier decision-makers in her matter had asked themselves what had prevented lodgement of the claim, and had decided her matter on the basis that it was lack of awareness of the deadline that had been the essential factor. Ms Sertich argued that there was a logical flaw in that approach. She has a point: the question to be asked under the statutory test is not what it is that prevented lodgement of the claim, but rather whether the special circumstances in the particular matter were such as to prevent lodgement. And it is indeed the case that some of the earlier decision-makers fell into error by asking the wrong question. But asking the question posed by the statutory test does not assist Ms Sertich: she acknowledged at hearing that she could have completed and lodged the claim in the time available. It is thus inescapable that she was not prevented from lodging the claim by her circumstances, and that would be the conclusion even without her concession, as it is plain that she was able to do so much else over the year in which she could have lodged the claim. It is simply not credible that over that extended period she was unable to find the time that was needed to complete and lodge the form. The discretion to extend the time for the claim to be made is therefore not enlivened.

  1. I am sympathetic to the challenges Ms Sertich faced during the period in question, but that does not alter the outcome of the matter. I doubt that her circumstances met the special circumstances test; and I am certain that her circumstances did not prevent her making a claim by the deadline of 30 June 2016. The decision under review is affirmed.

26.     I certify that the preceding 25 (twenty-five) paragraphs are a true copy of the reasons for the decision herein of  Member Mark Hyman

27.      

...........................[sgd]........................................

Associate

Dated: 6 September 2018

Date(s) of hearing: 13 July 2018
Solicitor for the Applicant: Self-represented
Solicitors for the Respondent: Department of Human Services
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