Shonoodh and Secretary, Department of Social Services (Social services second review) - [2019] AATA 768

Shonoodh and Secretary, Department of Social Services (Social services second review) [2019] AATA 768 (25 March 2019)
Division:GENERAL DIVISION
File Number:2018/1941
Re:Adil SHONOODH
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Member G Hallwood
Date of hearing: 8 February 2019
Date of decision: 25 March 2019
Place:Adelaide

The decision under review is affirmed
..............................[Sgnd]....................................
Member G Hallwood
CATCHWORDS
SOCIAL SECURITY – Family Tax Benefits and School Kids Bonus – Adjusted taxable income – Including total net investment loss - Overpayment – Whether overpayment is a debt – Should debt be written off or waived – Decision under review is affirmed
LEGISLATION
A New Tax System (Family Assistance) Act 1999
A New Tax System (Family Assistance Administration) Act 1999
CASES
Beadle and Director-General Social Security (1984) 6 ALD
Boswell and Secretary, Department of Families, Housing and Community Services and Indigenous Affairs (2011) AATA 171
Brumley and Secretary, Department of Social Services (2015) AATA 767
Grounds and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs (2009) AATA 223
Holmes and Secretary, Department of Family and Community Services (2003) AATA 888
Perera v Department of Families, Housing, Community Services and Indigenous Affairs (2011) FCA 896
Secretary, Department of Social Security v Coralie Hales (1998) FCA 219
REASONS FOR DECISION
Member G Hallwood
25 March 2019

This application appeals a decision of the Social Services & Child Support Division of the Administrative Appeals Tribunal (AAT1). On 23 February 2018, the AAT1 affirmed a decision of the Secretary to raise and recover against the applicant, Mr Shonoodh, a Family Tax Benefit (FTB) debt of $10,417.86 and a School Kids Bonus (SKB) debt of $1,286.00 for the 2015-2016 financial year.

THE ISSUES

The issues to be determined are:
(a)Has Mr Shonoodh received a payment in excess of his entitlement?
(b)If so, is the overpayment a debt due to the Commonwealth?
(c)If so, is there any basis not to recover the debt or any part of it?
In summary, the Secretary contends first that an overpayment occurred because Mr Shonoodh did not adequately report losses made by rental properties owned by himself and his wife. The Secretary contends that those losses, under the statutory rules, are added back to taxable income, and other incomes, to create a notional income pool called ‘adjusted taxable income’ against which Mr Shonoodh’s entitlement for FTB and SKB should have been assessed. And further that because those losses were not taken into account in respect of the FTB and SKB payments for the 2015 – 2016 financial year, an overpayment occurred. Second, the Secretary contends that there are no grounds to write off or waive Mr Shonoodh’s overpayment debt. Mr Shonoodh. Mr Shonoodh argued that he did not believe that the government would provide financial support for people with children, only to later make them pay that money back. And further that the net rental property losses should not be ‘added back’, or treated like income in any respect,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Shonoodh and Secretary, Department of Social Services (Social services second review) [2019] AATA 768
Case: [2019] AATA 768
Decision Date: 25 March 2019

CaseChat Overview and Summary

This matter concerned an appeal by Shonoodh against a decision of the Administrative Appeals Tribunal (AAT) affirming the Secretary of the Department of Social Services' determination that an overpayment of Family Tax Benefit and School Kids Bonus constituted a debt. The core of the dispute revolved around the calculation of Shonoodh's adjusted taxable income, specifically whether a total net investment loss should have been included in that calculation.

The Administrative Appeals Tribunal was required to determine whether the Secretary correctly calculated Shonoodh's adjusted taxable income by including the total net investment loss, and consequently, whether the resulting overpayment of Family Tax Benefit and School Kids Bonus was a recoverable debt. The Tribunal also considered whether, if a debt was found to exist, it should be written off or waived.

The Tribunal affirmed the Secretary's decision, finding that the relevant legislation required the inclusion of total net investment losses when calculating adjusted taxable income for the purposes of Family Tax Benefit and School Kids Bonus. Consequently, the overpayment was correctly identified as a debt. The Tribunal further determined that there were no grounds to write off or waive the debt under the applicable provisions.

Orders