Singleton and Secretary, Department of Social Services (Social services second review)
[2019] AATA 766
•26 April 2019
Singleton and Secretary, Department of Social Services (Social services second review) [2019] AATA 766 (26 April 2019)
Division:GENERAL DIVISION
File Number: 2017/2378
Re:Fiona Singleton
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
DECISION
Tribunal:Member K Parker
Date:26 April 2019
Place:Melbourne
The Tribunal affirms the decision under review.
.....[sgd]................................................................
Member K Parker
Catchwords
SOCIAL SECURITY – family tax benefit – claim for lump sum payment for past period – late lodgement of claim – late lodgement of taxation returns – whether an extension of time should be granted – whether special circumstances prevented lodgement by due date – meaning of “special circumstances” – meaning of “prevented” – where applicant relied on erroneous advice from accountant – where applicant deferred lodgement while awaiting private ruling from Australian Taxation Office and further determination of subsequent objection application – where lack of awareness that obligation existed to lodge taxation returns despite seeking a private ruling – where delay also said to be caused by post-natal depression, minor surgery to child, and short periods of international travel by applicant’s husband – Tribunal satisfied that special circumstances did not exist that prevented lodgement by the due date – family tax benefit claim not “effective” - decision affirmed
Legislation
A New Tax System (Family Assistance)(Administration) Act 1999 (Cth) ss 3, 5, 7, 10, 13, 14A, 17
Administrative Appeals Tribunal Act 1975 (Cth) s 37
Public Service Act 1999 (Cth), s 15Taxation Administration Act 1953 (Cth), s 357-125
Cases
Andrews and Director-General of Social Security [1983] AATA 248
Re Rosemarie Beadle and Director-General of Social Security [1984] AATA 176
Dranichnikov v Centrelink [2003] FCAFC 133
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Jess v Scott (1986) 12 FCR 187
Re Barrett and Secretary, Department of Social Services [2017] AATA 1588
Re Robson and Secretary, Department of Social Services [2016] AATA 1012
Re Synnes and Secretary, Department of Social Services [2019] AATA 338
Riddell v Secretary, Department of Social Security (1993) 42 FCR 443
Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267Wilson and Director-General of Social Services [1981] AATA 88
Secondary Materials
“Operational Blueprint 007-07030050 Processing Family Tax Benefit lump sum claims”, issued by the Department of Human Services
“Operational Blueprint 007-07030010 Assessing Special Circumstances Extensions for customers unable to meet lodgement and other specific requirements for family assistance”, issued by the Department of Human Services
“RISK: departmental programme fraud by staff members” publication issued by Department of Human Services
REASONS FOR DECISION
Member K Parker
26 April 2019
This application is about a claim made by Ms Fiona Singleton on 8 September 2016 to receive a lump sum family tax benefit (FTB) payment for the 2014/2015 financial year (Claim).
The Secretary, Department of Social Services (Secretary) contended that Ms Singleton is not entitled to receive such payment (in the order of $9,774.70)[1] because her Claim was not “effective” under s 13 of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (Administration Act) because she had not lodged the Claim or the taxation returns for her and her husband on or before 30 June 2016 as required under the legislation. Ms Singleton contended that there were “special circumstances” that prevented her from doing so. The Secretary disagreed and contended that the time for lodgement should not be extended.
[1] Refer Exhibit “R2”.
Centrelink, the service agency for the Commonwealth Government responsible for the administration of FTB and other social security payments, made a decision on 14 September 2016 to reject Ms Singleton’s Claim (Original Decision). An authorised review officer (ARO) of the Department of Human Services (Department) reviewed the Original Decision and on 3 November 2016, affirmed it. Ms Singleton sought review by the Child Support and Social Services Division of the Administration Appeals Tribunal (AAT1). The AAT1 affirmed the decision of the ARO on 15 March 2017.
Ms Singleton sought review of the AAT1 decision to the General Division of the Administrative Appeals Tribunal (this Tribunal). The Secretary lodged a set of documents with the Tribunal pursuant to s 37 of the Administrative Appeals Tribunal Act 1975(Cth) (AAT Act) comprising 149 pages (T-Documents) and a further set of documents comprising 102 pages (Supplementary T-Documents). The Secretary lodged a Statement of Facts, Issues and Contentions dated 13 October 2017 (Secretary’s Submissions).
A hearing took place before this Tribunal at which both parties made further oral submissions and the Tribunal was referred to relevant case authorities.
At the hearing, Ms Singleton tendered a document entitled “Folio of Documents: Neuss – Singleton” showing a Centrelink date stamp of 30 July 2017, attaching documentary evidence (Ms Singleton’s Folio).[2] Ms Singleton lodged a further document at the hearing entitled “Application to the Administrative Appeals Tribunal [General Division] (‘Tribunal’) 2017/2378”, setting out her submissions in support of her application (Ms Singleton’s Submissions).[3]
[2] Refer Exhibit “A2”.
[3] Refer Exhibit “A4”.
For the reasons set out below, this Tribunal is satisfied that Ms Singleton’s Claim was not “effective” under the provisions of the Administration Act and is taken not to have been made. In practical terms, this means Ms Singleton is not entitled to receive a FTB lump sum payment for the 2014/2015 financial year. Accordingly, the decision under review is affirmed by this Tribunal.
ISSUES
The issue for determination by this Tribunal is whether Ms Singleton made an “effective” claim for a FTB lump sum payment in respect of the 2014/2015 financial year. The answer to this question will depend on whether there were “special circumstances” that prevented Ms Singleton from lodging the Claim and her and her partner’s respective taxation returns for the 2014/2015 financial year on or before the due date, being 30 June 2016.
LEGISLATIVE FRAMEWORK
Part 3 of the Administration Act deals with the payment of family assistance and Division 1 relates specifically to the payment of FTB. Subdivision A sets out provisions in relation to making claims to receive FTB.
Section 5 of the Administration Act provides that the only way a person can become entitled to be paid FTB is to make a claim in accordance with Subdivision A.
Section 7 allows for a claim to be made for payment by a single payment, instalment or for a past period and also deals with the form and information requirements of a FTB claim, in order for it to be “effective”.
Section 10 of the Administration Act places restrictions on claims for payment of FTB for a past period. Specifically, s 10(2) provides as follows:
(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.
Section 13 of the Administration Act provides that if an “effective” claim is made, the Secretary must determine the claim. However, if an “effective” claim is not made, it is taken not to have been made.
Section 14A of the Administration Act provides as follows:
Restriction on determining claim where income tax return not lodged
(1)If, in relation to a claim for payment of family tax benefit made by an individual:
(a) the claim is for payment of that benefit for a past period; and
(b)the past period falls in an income year (the past period income year) that is one of the 2 income years before the one in which the claim is made; and
(c) one or more of subsections (2) to (3A) apply;
then the claim is taken never to have been made.
(2) This subsection applies if:
(a)the claimant is required to lodge an income tax return for the past period income year; and
(b) the claimant has not lodged the return before the end of:
(i) the first income year after the past period 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 lodging the return before the end of that first income year.
(3) This subsection applies if:
(a)at the time the claim is made, a person is the claimant’s partner, and that person was the claimant’s partner at any time during the past period; and
(b)that person is required to lodge an income tax return for the past period income year; and
(c) that person has not lodged the return before the end of:
(i) the first income year after the past period 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 person from lodging the income tax return before the end of that first income year.
(3A) This subsection applies if:
(a)the claimant, or any other individual whose adjusted taxable income is relevant in working out the claimant’s entitlement to, or rate of, family tax benefit for the past period, is not required to lodge an income tax return for the past period income year; and
(b)the claimant does not notify the Secretary of the amount of the claimant’s adjusted taxable income for the past period income year before the end of:
(i) the first income year after the past period 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 that notification before the end of that first income year.
(4)The further period referred to in subparagraph (2)(b)(ii), (3)(c)(ii) or (3A)(b)(ii) must end no later than the end of the second income year after the past period income year.
Section 17 of the Administration Act provides as follows:
Determination of past period entitlement claim
If:
(a)the claim is one for payment of family tax benefit for a past period; and
(b)the Secretary is satisfied that the claimant was eligible for family tax benefit:
(i)for the whole of the period in accordance with Subdivision A or C of Division 1 of Part 3 of the Family Assistance Act; or
(ii)for part of the period in accordance with Subdivision A of that Division and for the remainder of the period in accordance with section 31 of that Act;
the Secretary must determine that the claimant is entitled to be paid family tax benefit for the past period.
FACTUAL BACKGROUND
At all relevant times, Ms Singleton was partnered to her husband, Mr Alan Neuss and they have one dependent child who was born in 2012. Ms Singleton lodged her Claim for FTB for the 2014/2015 financial year on 8 September 2016.[4] The claim form was signed by Ms Singleton on 2 September 2016.[5] These matters are not in dispute.
[4] Refer T-Documents T4.
[5] Refer T-Documents T4/65.
On 11 February 2014, Centrelink sent a letter to Ms Singleton to notify her of changes to the family assistance payments.[6] Specifically, this letter advised Ms Singleton that from the 2012/2013 financial year onwards, she had one year, instead of two years, to submit a lump sum claim for FTB and to confirm her income for FTB (requiring her and her husband to lodge their taxation returns with the Australian Taxation Office (ATO) or to notify Centrelink that they do not need to lodge a taxation return). This letter advised Ms Singleton as follows:
…It is important that you are aware of the reduced period of time so that you do not miss out on your full entitlements, including Family Tax Benefit supplements and the Child Care Rebate…
[6] Refer T-Documents T3.
Ms Singleton and Mr Neuss previously owned a property in Tasmania which they sold in November 2014.
In a written submission prepared by Ms Singleton (and attached to her application for review by the AAT1), she provided the following explanation as to why she had been late in lodging her Claim and the taxation returns for her and her husband:[7]
[7] Refer T-Documents T9/127.
(a)she and Mr Neuss were required to seek a private ruling from the ATO in relation to the sale of the “property/business” located in Tasmania (Mr Neuss described that this private ruling related to “the capital loss on a profit making venture, some renovation”);[8]
[8] Refer page 1 of 3 of transcript of audio recording of telephone call between Mr Neuss and a representative of the ATO – CR0377.3.
(b)they initially engaged the services of an accountant, Mr John Nagle, on 22 July 2015 to prepare the required documentation;
(c)“after lengthy research and consumption of the information” they provided to Mr Nagle, he eventually advised her and Mr Neuss that he was not confident of a successful outcome (should they apply for a private ruling) and he “showed little interest in proceeding with the matter any further”;
(d)on 31 August 2015 she engaged the services of a “new” Chartered Practising Accountant, Mr Harry Karakinos;
(e)by 6 November 2015, she and Mr Neuss had provided to Mr Karakinos all of the relevant information “after lengthy verbal and electronic communications” and that this was “delayed somewhat” by the international travel Mr Neuss had to undertake as part of his employment;
(f)her and Mr Neuss’s application for the private ruling was lodged by Mr Karakinos on 23 December 2015;
(g)Mr Neuss subsequently telephoned the ATO at least five times seeking to establish a timeline for the decision (see more detail in paragraph [20] and [21] below);
(h)on 23 February 2016, the ATO requested further information which was collated and provided to the ATO on 8 March 2016;
(i)on 31 March 2016, Mr Karakinos advised that “our Private Ruling had been rejected by the ATO”;[9]
(j)on 20 May 2016, Ms Singleton and Mr Neuss lodged an objection to the private ruling (Mr Karakinos did not represent Ms Singleton and Mr Neuss with respect to the objection process);[10]
(k)on 14 July 2016, an ATO objection officer, Mr David Sacco, notified Ms Singleton and Mr Neuss that their objection had been successful and a written decision would be sent to them in the mail;[11]
(l)on 11 August 2016, (which Ms Singleton described as the “first available appointment”), she and her husband met with their accountant and they were able to lodge their tax returns for the 2014/2015 and 2015/2016 financial years.
[9] Refer T-Documents T6/99 for ATO notice of private ruling dated 30 March 2016.
[10] Refer Exhibit “A2”, letter prepared by Mr Karakinos dated 29 June 2017.
[11] This communication is evidenced in a case note report prepared by a representative of the ATO, Mr David Suttor, dated 14 July 2016 – see Exhibit “A2”.
Ms Singleton tendered a set of transcripts prepared by “waywithwords.net” said to be transcripts of conversations that Mr Neuss had with the ATO to follow up the application for a private ruling and subsequent objection application. All of these transcripts were undated.
(a)The Tribunal was provided with a transcript numbered CR0377.2 which referred to a conversation that took place between Mr Karakinos and a representative from the ATO by the name of “Rody”. Mr Karakinos said he was calling about the progress of the application for a private ruling he had made on behalf of Mr Neuss and enquired as to how long it would be before they would obtain a response. Rody told Mr Karakinos the timeframe was 28 days for an application for a private ruling. Mr Karakinos told Rody the application had been submitted on the “23rd December”. Rody told Mr Karakinos that the application was being worked on; it had not been left and that there was nothing further to be done. Rody told Mr Karakinos he would “increase the priority of the escalation”. Mr Karakinos informed Rody that he did not want Rody to increase the priority because he had found that this may potentially lengthen the process. Mr Karakinos asked when he should call back about it and Rody told him “the 1st of this month” (although it is not indicated which month the telephone conversation took place in).
(b)The Tribunal was provided with a transcript numbered 01 Track 1 which referred to a conversation that took place between Mr Neuss and a representative from the ATO (no name was indicated on the transcript). The transcript seems to indicate that the ATO representative checked to see if the final ruling had been put on Mr Neuss’s account (it is not clear to the Tribunal what was meant by this). The ATO representative informed Mr Neuss that he could not see any private ruling in his documents. He provided Mr Neuss with a receipt number for the transaction. After that the transcript appears to be incomplete as Mr Neuss was put on hold but there was no further record made of any conversation that took place after Mr Neuss was placed on hold.
(c)The Tribunal was provided with a transcript numbered CR0377.3 which referred to a conversation that took place between Mr Neuss and a representative from the ATO by the name of “Jaime”. Mr Neuss told Jaime they were expecting to receive the private ruling “on Wednesday” but had not received any correspondence through his tax agent or heard from the ATO. Jaime checked the system and told Mr Neuss he was unable to see that any private ruling had been issued. Mr Neuss asked Jaime to check in the case notes and referred to a conversation he had had with the ATO “earlier in the week”. He provided Jaime with the receipt for the transaction which is the same as the receipt number provided to Mr Neuss by the ATO representative referred to in the above subparagraph. Jaime searched again and informed Mr Neuss that he had found a private ruling. He also told him he would “pump up the priority” to make sure it got to Mr Neuss as soon as possible. Mr Neuss asked why this had not been done when he last called. Jaime said it was because it had been linked to his tax agent and that the ATO could not remove the tax agent. Jaime escalated the enquiry to high priority and told Mr Neuss that if it was not done within one to two weeks, he should call the ATO and the priority of his enquiry would be increased (again).
(d)The Tribunal was provided with a transcript numbered CR0377.1 which referred to a conversation that took place between “Tim” from the ATO and Mr Neuss. Mr Neuss is recorded as saying that he was making an enquiry about the progress of his objection to a private ruling. Tim told Mr Neuss that the ATO had received the objection application on “May 26th” and that the planned due date for the application had been set for “July 21st”. Tim told Mr Neuss that if there had been no activity or correspondence provided to him by this date, he should call back and quote the receipt numbers that Tim had provided to him. Mr Neuss asked to be provided with the name of the objection officer to whom his application had been assigned to. Tim indicated that he was not sure who the application had been assigned. Mr Neuss insisted to be provided with the name of the objection officer during the course of that telephone conversation. Tim advised Mr Neuss that the ATO had protocols in place which prevented the ATO from doing so. Tim invited Mr Neuss to lodge a complaint if he was unhappy with “the service standard”. Mr Neuss asked how he could get in touch with the objection officer and Tim told Mr Neuss that he could not do so. Mr Neuss requested a call-back. Tim said he could only do so if the application had gone outside the service standard. Mr Neuss expressed his dissatisfaction to Tim in no uncertain terms and the call ended.
Ms Singleton produced a set of Telstra telephone records. The Secretary accepts that those records show that Ms Singleton or Mr Neuss called the ATO twice in the period between 23 December 2015 and 23 February 2016 and that they called Mr Karakinos three times in that same period. The Secretary states that the ATO had produced a recording of a telephone discussion on 15 June 2016 between Mr Neuss checking progress of response to objection.[12] The Secretary also states that the Telstra records disclose that Mr Neuss called the ATO on 11 July 2016.[13]
[12] Ibid.
[13] Refer 6th bullet point on page 8 of the Secretary’s Submissions.
Ms Singleton tendered a letter prepared by Mr Karakinos dated 29 June 2017 which stated that he had not prepared the tax returns for Ms Singleton or Mr Neuss until the ATO had made its private ruling, for the following reason:
…It would have been negligent to do so, due to the significant penalties to myself and my clients for providing incorrect information. The difference in taxable income depending on a successful vs. unsuccessful Private Ruling result was in excess of $100,000.
Once the Private Ruling [application] was lodged, it was with the ATO for a significant amount of time. My clients contacted me on numerous occasions attempting to establish if I had received any further information. I was unable to elicit any information on the status of my clients ruling during my contact with the ATO…
…On 14 July my client called to advise they were successful in their Decision Objection. They booked the first available appointment and their ITR was lodged as soon as practicable, given it was the peak tax season for our firm and the ATO…
The Tribunal notes that there is evidence which supports Mr Neuss’s attempts to ascertain a time frame for when the ATO was to make a decision in relation to the private ruling objection application. This evidence included:
(a)the transcribed audio recordings of conversations between Mr Neuss and ATO representatives as outlined in paragraph [20] – see Exhibit “A3”;
(b)the Telstra call records as outlined in paragraph [21]; and
(c)a notation created on 15 June 2016 in an ATO “Work Management Activity Notes Report” forming part of Exhibit “A2” (FOI Folio No.10), stating as follows:
Client requested progress of objection, was dissatisfied when I told him that I couldn’t provide him with any information regarding this unless it was outside the service standard. Client then disconnected from conversation.
…
The ATO decided to allow Ms Singleton’s and Mr Neuss’s objection to the private ruling. This decision is recorded in a letter from a Deputy Commissioner of Taxation dated 13 July 2016, and stated as follows:[14]
…We have considered your objection and allowed it. Any loss generated from the sale of the property at Westbury, Tasmania will be on revenue account. This means that your share of any loss can be offset against your other assessable income…
[14] Refer FOI Folio No.23 of Exhibit “A2” or T-Documents T6.
A statement of reasons for decision was attached to this letter. The reasons for decision record that Ms Singleton and Mr Neuss made an estimated loss of $116,000 on the sale of their Tasmanian property.[15]
[15] Refer FOI Folio No.29 of Exhibit “A2”.
Ms Singleton contended that the delay in lodgement of the Claim was “largely due to the administrative delays on behalf of the Australian Taxation Office (ATO).”[16]
[16] Refer T-Documents T9/127.
The Secretary contended that Ms Singleton was not prevented from making the Claim by the due date because she could have lodged the taxation returns by 30 June 2016 in accordance with the original private ruling by the ATO made on 30 March 2016.[17] In a letter sent by the Secretary’s representative, Mr Tim Noonan, to Ms Singleton (and copied to the Tribunal) dated 27 April 2018, Mr Noonan stated as follows:
…The ATO would then have assessed your taxable income to enable making the FTB claim.
If the claim was accepted and FTB was paid before the ATO decision allowing the objection to the Private Ruling, assuming you requested an amendment to the taxation assessment, upon receipt of the amended assessment, the Department of Human Services (‘the Department’) would have recalculated (‘re-reconciled’) the FTB entitlement. If the amended adjusted taxable income was less than the original income amount, the re-reconciliation is likely to have resulted in a top-up payment…
[17] Refer letter from the Secretary’s representative (copied to this Tribunal) to Ms Singleton dated 27 April 2018 – Exhibit “R2”.
In this letter, Mr Noonan also referred to a Departmental procedural guide entitled “Operational Blueprint” and quoted excerpts from “instruction 007-11010180” as follows in relation to FTB re-reconciliation:
FTB re-reconciliation
Re-reconciliation compares the customer’s entitlement based on the new information with the result of the previous reconciliation. It may result in a top-up, overpayment or nil adjustment. A previous FTB reconciliation top-up or overpayment will be included in the calculation.
The following changes will trigger re-reconciliation of FTB:
·A customer’s and/or their partner’s actual adjusted taxable income details are transferred by the Australian Taxation Office (ATO). For example, the ATO transfers actual income details for a person whose estimated income was used to reconcile FTB, or the ATO advises amended actual income details for a customer or their partner.
FTB automatic re-reconciliation
Table 1: This table contains information about the automatic process of FTB re-reconciliation when family circumstances are updated.
Step Action
1 Initial reconciliation completed
After initial reconciliation of FTB is completed, re-reconciliation will be automatically triggered if the details used to calculate FTB entitlement for the relevant financial year are updated.
Re-reconciliation automatically compares the customer’s entitlement based on the new information with the earlier reconciliation result.
Re-reconciliation will occur if, for example:
·Centrelink receives new actual adjusted taxable income details from the Australian Taxation Office (ATO).
Requirements of legislation
Under s 14A(2)(b)(i) of the Administration Act Ms Singleton was required to have lodged her tax return on or before 30 June 2016. Further, under s 14A(3)(c)(i) of the Administration Act Ms Singleton’s husband was required to have lodged his tax return on or before 30 June 2016. Ms Singleton does not dispute that the tax returns were lodged after this statutory deadline. Accordingly, this Tribunal must consider whether there were “special circumstances” that prevented Ms Singleton and her husband from lodging their returns before this date that provided a basis or bases to extend the time for lodgement of those tax returns for the purposes of s 14A(2)(b)(ii) and s 14A(3)(c)(ii) of the Administration Act respectively.
The term “special circumstances”, as referred to in s 14A(2)(b)(ii) and s 14A(3)(c)(ii) of the Administration Act, is not defined. It is a term that appears elsewhere in the Administration Act and the AAT Act in the context of other types of social security benefits and provisions conferring a decision-maker with discretion to extend statutory time frames.
Case authorities
The Tribunal has taken into account the following case authorities addressing how the term “special circumstances” should be interpreted. The Tribunal notes that many of these cases arose in different legislative contexts to the context of the present application. Nevertheless, the Tribunal considers that these authorities provide helpful judicial guidance as to the meaning of “special circumstances”, particularly those that have arisen in the context of the provision of other types of social security benefits or that relate to the extension of statutory time frames.
In Re Rosemarie Beadle and Director-General of Social Security [1984] AATA 176, the General Division of this Tribunal, constituted by three members, made the following observations about the meaning of “special circumstances” in the context of an applicant seeking payment of a “handicapped child's allowance” as from a date which preceded the date the applicant lodged a claim for such allowance:
[11]It is necessary to dispel a misconception in the minds of some, as appears from the material furnished to this Tribunal. Whatever "special circumstances" may mean and whatever the relevance of the applicant's state of mind as to the existence of such an allowance and its possible operation in the particular case, there is nothing to justify the notion that ignorance of even the existence of such a thing as a handicapped child's allowance will preclude the operation of sub-s.102(1) para. (a). There seems to be an idea, even in the minds of some concerned with the administration of the Act, that a person who is aware of the existence of the allowance, but has not thought it applicable in the particular case, is in a better position than a person who is not even aware that the allowance existed. How this misunderstanding came about we are not sure but it should be removed. It seems to have stemmed from a misunderstanding of decisions of the Tribunal that ignorance of the relevant provisions of the Social Security Act does not constitute special circumstances. This is a matter referred to later in these reasons.
[12]An expression such as "special circumstances" is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.
[13]The question must be asked - in relation to sub-s.102(1), what is the context in which circumstances are to be adjudged special or not special? In any event they must be sufficiently special to warrant an exercise of the Director-General's discretion to allow payment of the handicapped child's allowance from a date earlier than the period of 6 months identified by the sub-section. Does that mean that there must be something special in the circumstances of the family at the time for which the allowance is sought? Does it mean that there must be something special in the circumstances in which and in the time at which the application was made? In our view, while some explanation for the delay in making the application is called for, the existence of "special circumstances" is to be determined from all the circumstances surrounding the application and the time at which it was made. Several recent decisions of the Tribunal have found "special circumstances" in the entirety of the situation presented rather than in any one circumstance…
…
[21] But 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 so as to warrant payment of the allowance earlier than the date from which it would ordinarily be paid.
The Full Federal Court in Riddell v Secretary, Department of Social Security (1993) 42 FCR 443 considered the meaning of “special circumstances” in the context of provisions relating to the waiver of recovery of an overpayment of a supporting parent's benefit. The Full Court held as follows:
…Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other.
In Groth v Secretary, Department of Social Security (1995) 40 ALD 541, Justice Kiefel (as her Honour was at that time) observed, in the context of a case involving a review of a decision about whether compensation payments should be treated as direct deductions in calculating the amount of disability support pension payable, as follows:
[12] The phrase "special circumstances", it has been said, although imprecise is sufficiently understood not to require judicial gloss: Beadle's case (at ALR 229; ALD 674), and for present purposes it is sufficient to observe that it would require something to distinguish Mr Groth's case from others, to take it out of the usual or ordinary case. That was, I consider, the only enquiry to be undertaken in this case. It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary. The enquiry I have referred to would involve considering what would be the effect, if the provision in question or the principle of liability it creates, is applied. That question arose in Smith and in Ivovic's case. That may not be the only question which will arise in determining, in a particular case, whether special circumstances exist. In the context of some discretionary provisions, for example one which provides for a longer period of time to be fixed in "special circumstances" as in Beadle's case, it may be relevant to look to how a person comes to require the exercise of the discretion and therefore to the events preceding the arbitrary provision coming into effect. This is not such a case, for all that the background facts tell us is that the Act applies to Mr Groth…
[13]The Tribunal held that Mr Groth's circumstances "are not out of the ordinary when regard is had to those subject to the provisions of Part 3.14" which, as I have said, means simply that the section can be seen to have the same effect on him as it does to other persons qualified to receive such a pension. It went on to find that his circumstances and those of his family although difficult, did not constitute hardship and they could not be said to be different from other pension recipients. There is, I consider, no error disclosed in the reasoning to this conclusion. In reality, as the Deputy President noted, the difficulty in which Mr Groth is placed results from the level of pension set by the legislation and not because it has special consequences for him.
In the Full Federal Court decision in Dranichnikov v Centrelink [2003] FCAFC 133 Justice Hill observed:
[66]To some extent the question whether there were special circumstances must depend on how it came about that the error occurred. Again that is not a matter to which the decision maker apparently averted. Other cases which have considered analogous words such as "special reasons" has tended to conclude, albeit in different contexts, that what is required will be circumstances which distinguish the case in consideration from the usual case. There will be a requirement that the circumstances are such that takes the case out of the ordinary: Jess v Scott (1986) 12 FCR 187 and the cases in various contexts in the decision which Lockhart, Shepherd and Burchett JJ discuss.
In Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25, Justice Besanko held, in the context of deciding whether a Commonwealth debt should be waived, that “special circumstances” required something unusual or uncommon that distinguished the case from the ordinary or usual case. At [33], Justice Besanko observed:
…I also note that the authorities have emphasised time and again the importance of maintaining flexibility in determining what constitutes special circumstances. The danger is that the test will be overstated if the word ‘exceptional’ is emphasised. It was not the intention of Parliament to confine the exercise of the discretion to an exceptional case. There is less risk of overstatement if the words ‘unusual’ or ‘uncommon’ are emphasised. Those words indicate, correctly in my view, the fact that there must be something that distinguishes the case from the ordinary or usual case. It may not be easy to postulate the ordinary or usual case other than in quite general terms and, in doing so, close attention must be given to the particular statutory context.
In Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267 Justice Jacobson observed as follows in the context of exercising the waiver power contained in s 101 of the Administration Act:
[51] The effect of the authorities is that the phrase “special circumstances,” although lacking in precision, is sufficiently understood as including events or things that render the operation of the statue in a particular case as unfair, unintended or unjust. What is required is something that takes the case out of the ordinary, and unfairness or unintended consequences may show that this exists. Moreover, the circumstances of the case are not confined to matters that are external to the operation of the statutory scheme…
The Secretary referred to the Tribunal to a decision of the General Division of this Tribunal in Re Barrett and Secretary, Department of Social Services [2017] AATA 1588 (Re Barrett). Member Grigg in this case was not satisfied that special circumstances existed to warrant the late lodgement of the applicant’s tax returns and for this reason her claim for a FTB lump sum payment for a past period was not “effective”. In that case, the reasons for the late lodgement of the tax returns were a lack of awareness of the legislative requirements; purported incorrect advice provided by the applicant’s accountant; and financial and emotional difficulties experienced by the applicant.
At [46] to [48] of the reasons for decision in Re Barrett, Member Grigg found that the applicant was aware of the due date for lodgement of the tax returns and that even if she were unaware, ignorance of the legal requirements was not a special circumstance. The Member did not consider that the advice provided to the applicant constituted a special circumstance because the applicant could have called Centrelink to discuss her predicament, but she did not. The Member noted a lack of corroborating evidence in relation to the impact of the applicant’s financial and emotional difficulties and also that they did not hinder her from completing her tax returns once she had spoken to the ATO. Member Grigg concluded that the applicant’s financial and emotional difficulties combined with her reliance on her accountant’s advice did not constitute special circumstances.
The Tribunal has also considered the general principles referred to in a recent decision of Senior Member Cotter of the General Division of the Tribunal in Re Robson and Secretary, Department of Social Services [2016] AATA 1012 (Re Robson). The applicant in this case asserted that she was unaware of a change in the legislation which had halved the time for lodgement of a FTB lump sum past period claim. The applicant claimed not to have received a letter from Centrelink advising her of the change in the legislation. Senior Member Cotter in this case observed that:
[26]In any event, it has long been held that lack of knowledge of the law is not an unusual or uncommon experience that would constitute special circumstances for the purposes of provisions like s 10(2) of the Administration Act [citing Wilson and Director-General of Social Services [1981] AATA 88 and Andrews and Director-General of Social Security [1983] AATA 248]…
…
[34]…Central to this question is once again the incorrect professional advice given by [the accountant]. That raises the same considerations as I discussed earlier. Neither ignorance of the law nor accountant error constitutes “special circumstances” under s 14A of the Administration Act.
There are some similarities in the factual circumstances in Re Barrett (and to a lesser extent in Re Robson) and the present application. However, there are also some differences. Moreover, the Tribunal considers that it would be inappropriate to place any weight on the outcomes of these decisions because each case claiming the existence or not of “special circumstances” must be considered on the merits and is dependent on its individual circumstances. However, the Tribunal notes the general principles in relation to applying the concept of “special circumstances” to the particular circumstances in those cases.
As indicated by this Tribunal in Re Synnes and Secretary, Department of Social Services [2019] AATA 338, the wording of s 14A(2)(b)(ii) and s 14A(3)(c)(ii) of the Administration Act also requires that the “special circumstances”, once identified, have “prevented” the lodgement of the tax returns within the required time frame. The Tribunal considers this to be an onerous requirement, as it is not enough for a claimant 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 served as an insurmountable block, hindrance or impediment to the lodgement taking place within the required time frame.
Communications with Centrelink and ARO
A Centrelink record indicates that on 21 September 2016, Ms Singleton was contacted by a Centrelink representative. Ms Singleton was recorded as stating that she wanted an individual private ruling by the ATO and had to wait for the official channels before they lodged their taxation returns and the lump sum claim.[18] The Centrelink representative indicated that Ms Singleton was aware that she was required to lodge the Claim by 30 June 2016.[19] This notes records as follows:[20]
…Cus says their hands were bound while awaiting the decision of the ATO, and the accountant’s advice was not to lodge the [income taxation return] prior to having the ruling made…
…
I have considered whether the customer may qualify for a special circumstances extension to lodge the 2014/2015 year FTB LSC. Customer may meet however the customer has not lodged evidence of this as at 24/10/2016. Have referred to the ARO for consideration.
…
[18] Refer T-Documents T13/140.
[19] Refer T-Documents T13/141.
[20] Refer T-Documents T13/140.
The ARO, who reviewed the decision of Centrelink not to extend the time for lodgement of Ms Singleton’s Claim, created a file note which stated as follows:[21]
Record of discussion with customer
…
Customer contact details:
03.11.16 Phoned Fiona and we discussed her appeal. Fiona was surprised the matter has been referred for review by ARO – she was of the opinion after discussing the matter with another officer that she would be granted an extension to lodge her claim because of the special circumstances in her case.
Fiona told me that she could have lodged their income tax earlier however this could have led to being fined. They acted on advice from accountants not to lodge without getting a private ruling first and this turned out to be quite a lengthy process.
I acknowledged the circumstances surrounding the late lodgement of her and her partner’s income tax returns, however questioned why she had not lodged FTB LSC earlier. Fiona told me that she wasn’t aware she could lodge a claim before lodging income tax returns. As well as this she felt that lodging a claim before knowing the outcome of the ATO matter could be construed as lodging a fraudulent claim. I explained that I was of the opinion the claim form addressed whether or not an ITR had been lodged and asked for an estimate of income in cases where ITRs hadn’t been lodged. I explained that any decision in relation to FTB entitlement would not be made until actual income was made available by ATO. Fiona provided details of the conversation that she had had with previous CSO and again stated she was of the opinion she would be granted the extension to lodge her claim. Advised Fiona that I would investigate her case further before making my decision.
[21] Refer T-Documents T7.
The ARO in her written decision dated 3 November 2016 also stated as follows:[22]
…You were advised that the private ruling would be required before you lodged your tax returns. You had no idea what you taxable income would be in 2014/2015 and your accountant wasn’t prepared to give you any figures. The claim form stated that you might incur an overpayment if the department worked out your Family Tax Benefit on your estimated income and your actual income was different and this wasn’t a risk you were prepared to take as an employee of the department…
[22] Refer T-Documents T8/121.
Ms Singleton’s submissions and further evidence provided by her
In Ms Singleton’s application for review to the AAT1, she stated as her reason for not lodging the Claim before 30 June 2016 as follows:[23]
The reason I was unable to lodge the form was due to
1. no income estimate would be verbally provided by my accountant pending the outcome of the Private Ruling therefore unable to provide that information of the form
2. I am an employee of Centrelink who also holds a security clearance (I work in the Serious Non Compliance Branch).
On the last page of the form it states its an offence to supply false and misleading information. I was told by the ARO that I should have lodged the form using any figures and had the claim rejected. This is still supplying false and misleading information. Centrelink states in their publications that a staff member who is also a customer, who commits welfare fraud may also be in breach of the APS Code of Conduct and sanctioned according to Section 15 on the Public Service Act 1999. The FTB lump sum claim form states that the Australian Gov Dept of Human Services may work out my lump sum payment based on my estimated income and that if the actual income is different an overpayment will need to be paid back. As a Centrelink employee, staff member and holder of a Highly Protected Security clearance I was unable to do this.
[23] Refer T-Documents T9.
Ms Singleton attached a Departmental publication entitled, “RISK: departmental programme fraud by staff members”.[24] This publication included the following statements (as relevant):
[24] Refer T-Documents T9.
Welfare, health and child support fraud by staff members is a risk for the department. If any staff member claims, or helps someone claim a payment/service they’re not entitled to, it can have a serious impact on the department.
…
If any staff member deliberately claims a welfare, health or child support payment and/or service they’re not entitled to, they may be committing fraud. It can result in criminal prosecution and conviction, including imprisonment.
If an ongoing or non-ongoing staff member commits welfare, health or child support fraud, they may also be in breach of the APS Code of Conduct. As a result, they may be subject to the following sanctions listed in Section 15 of the Public Service Act 1999:
· reprimand
· reassignment of duties
· salary reduction
· classification reduction, or
· termination of employment.
…
As a staff member, and a customer, you have the responsibility to:
Always
√ Declare your income details.
√ Declare your change in personal circumstances.
√ Provide truthful information.
…
Never
…
Χ Provide false or misleading information.
Ms Singleton sent an email to the AAT1 on 3 March 2017 to indicate a further reason for the delay in selling the Tasmanian property and engaging her accountant to seek a Private Ruling from the ATO.[25] Ms Singleton stated as follows:
…An additional factor that added to the length of time between selling the house in Tasmanian(sic) and approaching tax agent Mr Nagle was due to my daughters surgery on 23 September 2014. She had just turned 2 and had her tonsils and adenoids removed. The recovery period was approx 4 weeks.
Id(sic) just like this information added please.
[25] Refer T-Documents T11.
Departmental guidance and tax administration provisions
The Secretary tendered a downloaded copy of web pages from the ATO’s website that contains information in relation to private rulings.[26] On page 6 of this document, the ATO provides the following guidance to persons who have applied for a private ruling:
You must lodge your tax returns and activity statements by the due date, even if you are waiting for us to give you a private ruling.
[26] Refer Supplementary T-Documents ST1.
The Tribunal also notes s 357-125 of the Taxation Administration Act 1953 (Cth) (Tax Administration Act) which provides as follows:
357-125Applications and objections not to affect obligations and powers
The fact that you have applied for a private ruling or an oral ruling, or have made an objection against a private ruling, does not affect:
(a) your obligation to lodge a return or do anything else; or
(b) the Commissioner’s power to make or amend an assessment to do anything else.
The Secretary provided this Tribunal with a publication issued by Centrelink entitled “Notes Booklet for Claim for an annual lump sum payment of Family Tax Benefit – A payment to help families with the cost of raising children for the 2014-2015 financial year.”[27] This publication provides the following guidance (underlining added):[28]
[27] Refer Supplementary T-Documents ST6.
[28] Refer Supplementary T-Documents ST6, page 5.
How to claim a lump sum payment
You can claim through us by completing a claim for a lump sum payment of Family Tax Benefit for the relevant financial year.
You have up to 12 months after the end of the financial year for which you are seeking payment to lodge a lump sum claim for Family Tax Benefit.
Claiming a lump sum claim through Human Services
The claim can be paid after you (and/or your partner) have lodged a tax return and had your income details confirmed with the Australian Taxation Office. To be paid Family Tax Benefit you must complete and lodge you Family Tax Benefit claim and lodge your tax return(s) (if you are required to lodge a tax return).
You need to tell us if there are special circumstances that prevent you from lodging a claim, please call us on 136 150.
...
What happens if I do not lodge my tax returns or notify Human Services that I am not required to lodge my tax return within the allowed timeframe?
You (and/or your partner) must lodge a tax return and have your income details confirmed by the Australian Taxation Office, or tell us that you are not required to do so. The Australian Taxation Office can tell you whether you are required to lodge a tax return. If you do not do either of these things, any Family Tax Benefit you have received will become a debt and will have to be paid back.
You need to tell us if there are special circumstances that prevent you from lodging tax return(s) or telling us you (and/or your partner) are not required to lodge for the 2014-2015 financial year, please call us on 136 150 to discuss.
FTB claim form
The Secretary provided this Tribunal with a blank claim form used for making an annual lump sum payment of a FTB claim.[29] The Tribunal notes that a person making a claim is able to indicate whether or not they have lodged their and their partner’s taxation returns for the 2014/2015 year. Information is provided at this section of the form that an assessment of the FTB payable will not be assessed until income details are confirmed by the ATO, but nowhere on this form does it inform the claimant that he or she is not permitted to make a claim until such tax returns have been lodged with the ATO.
[29] Refer Supplementary T-Documents ST6.
Specifically, at question 135 on the claim form, a claimant is asked to indicate by ticking a “No” or “Yes” box whether they have lodged a tax return for the 2014/2015 financial year. At question 136, a claimant is asked to indicate whether he or she has received their Taxation Notice of Assessment by ticking a “No” or “Yes” box. At question 137, the claimant is asked to indicate whether they will be lodging a tax return for the 2014/2015 and if they provide a “No” answer, the claimant is prompted to enter text to explain why they will not be lodging a return. Identical questions are also asked of the claimant in reference to his or her partner (see questions 135 to 137 for “your partner on 30 June 2015”).
Questions 138 of the claim form prompts a claimant (and their partner) to provide an “income estimate” from various sources including from real estate. In part E of question 138, the claimant is prompted to indicate a profit or loss figure for “estimated taxable income from real estate”. Question 139, part C (headed “Total net investment losses”) allows for a claimant to enter an “estimated amount” if they have entered a net loss for their taxable income from investments and/or real estate at question 138 (D or E) by copying the loss over to this section.
At the bottom of the claim form, the claimant (and their partner) are required to provide the following declaration:[30]
[30] Ibid.
175 Statement
I declare that:
· The information I have provided in this form is complete and correct.
I understand that:
· giving false or misleading information is a serious offence.
·the Australian Government Department of Human Services may work out my lump sum payment based on my and my partner’s estimated income and that if the actual annual family income is different any overpayments will need to be paid back.
·some or all of the any overpayment may be recovered from my tax refund and/or future Family Tax Benefit payments, including supplement payments
·Family Tax Benefits including supplement payments can be used to offset a tax debt or used to repay Family Tax Benefit or Child Care Benefit or Child Care Rebate overpayments from other years.
·the Australian Government Department of Human Service scan make relevant enquiries to make sure I receive my correct entitlement.
Further submissions made at the hearing before this Tribunal
Ms Singleton was represented by Mr Neuss at the hearing before this Tribunal, although at times she represented herself. The effect of Ms Singleton’s and Mr Neuss’s oral submissions was that “through their agent” and “to exercise caution”, they delayed the lodgement so that they could provide accurate information. Mr Neuss submitted “This is a practising agent, we can push and push but it is out of our hands”. Mr Neuss also indicated that they did not know they had the deadline. This was at odds with an earlier indication provided by Ms Singleton to Centrelink that she was aware that the claim was required to be lodged by 30 June 2016 – see paragraph [43]. The Tribunal finds that Ms Singleton was aware of her obligation to lodge the Claim by 30 June 2016.
Ms Singleton submitted that if they did not “get the private ruling” their combined income would be $165,000 but if they got it, their combined income would be $0. Ms Singleton submitted that it would be “reckless” to make any ruling on this. She said the ATO was happy with this and had not penalised them for late lodgement of the taxation returns.
Ms Singleton was asked by the Tribunal at the hearing whether there was a reason why she had not lodged a FTB claim which made a note on it about Ms Singleton’s situation. Ms Singleton replied:
This portion is a deductible expense, that portion is not. It is not black and white. We still do not know the finer details of that Private Ruling.
Ms Singleton was also asked by the Tribunal whether she had a discussion with her accountant about the FTB claim. Ms Singleton responded, in effect, as follows:
No, we were still applying pressure on our accountant to sort things out. No accountability whatsoever with the ATO. We looked back and think what more could we have done. We exercised caution. I don’t understand why we are sitting here.
The Tribunal requested further details of the international travel by Mr Neuss said to have contributed in part to the delay. At the hearing it was confirmed that Mr Neuss had travelled twice between November and December 2015 (to PNG for one week and Nauru for one week). Mr Neuss indicated that he was not absent from Australia between November 2014 and July 2015.
In relation to the surgery performed on Ms Singleton’s child, also said to have contributed in part to the delay, at the hearing Ms Singleton explained that her daughter had experienced a reaction to the anaesthetic which had resulted in her experiencing night tremors for a period of three months following the surgery. There was no medical evidence before the Tribunal in relation to these medical issues.
At the hearing, Mr Neuss told the Tribunal that Ms Singleton was suffering from post-natal depression. There was no medical evidence before the Tribunal in relation to this alleged condition.
Ms Singleton said that there were a lot of factors that played a part, both personal and professional. She said they thought they were “doing the right thing”. She said they took the advice of their accountant and that, “We don’t rely 100 per cent on that letter. It is not black and white. Everything that we have done”.
Ms Singleton did not contact Centrelink before 30 June 2016 to indicate that special circumstances had prevented her from lodging the Claim and the taxation returns for herself and Mr Neuss for the 2014/2015 financial year. In Ms Singleton’s application form seeking review by this Tribunal, she stated as follows:[31]
At no stage did I believe I would automatically be successful in my application for Special Circumstances. HOWEVER, as I am a Centrelink employee I have access to the SAME legislation and guideline material as a Centrelink staff member in a call centre and therefore did not believe a phone call would warrant a decision or outcome different to the one that was determined after reading all our reference suites on this topic. In addition to this I was at no stage was I going to lodge my claim from until I had received notification from the ATO that the electronic lodgement of my tax returns has been processed. I had not come this far in the process to be reckless in nature and lodge my FTB lump sum claim before all the boxes had been ticked and due diligence given.
[31] Refer T-Documents T1/2.
CONSIDERATION
The Tribunal has given careful consideration to the evidence and submissions of both parties as outlined in detail above.
Firstly, the Tribunal is satisfied that Ms Singleton’s stated intention to ensure that she was doing the right thing by exercising caution where she considered it needed to be exercised, was an intention genuinely held by her. Ms Singleton is employed by Centrelink in the serious non-compliances section and appeared to the Tribunal to be vigilant in respect of not engaging in any conduct that might be characterised as non-compliant with the legislative framework that she was employed by Centrelink to regulate. Unfortunately, however, Ms Singleton has exercised a degree of caution that the Tribunal considers was not warranted in the circumstances, and on this occasion, had become hypervigilant to her detriment. The Tribunal has reached this view for the following reasons.
Guidance issued by the ATO was available to Ms Singleton (and her accountant for that matter) expressly stating that she was required to lodge her tax returns even though an application for a private ruling was pending. The fact that Ms Singleton was not aware (or not made aware by her accountant) of that obligation does not of itself constitute “special circumstances”, which could be said to have prevented her from lodging the Claim and the taxation returns on or before 30 June 2016. This view is supported by the case authorities referred to above supporting the general proposition that ignorance of the law is insufficient to constitute “special circumstances”.
In light of the evidence referred to in paragraph [22], the Tribunal finds that Mr Karakinos had advised Ms Singleton erroneously that, as her tax agent, he would not lodge her and Mr Neuss’s tax returns until they had received the private tax ruling and subsequently, a decision in relation to the objection application. This advice is contrary to s 357-125 of the Taxation Administration Act and also the publically available ATO guidance, as referred in paragraph [49]. The Tribunal considers that while Ms Singleton’s decision to rely on Mr Karakinos’s advice is unfortunate; it is insufficient, of itself, to constitute “special circumstances”. This approach is consistent with the general principles espoused in the case authorities referred to above to the effect that reliance upon incorrect professional advice is not sufficient to constitute “special circumstances”.
The Tribunal notes that the FTB claim form, being a document that was publicly-available (including to Ms Singleton, Mr Neuss and their accountant), did not expressly state that a claimant was not permitted to lodge a claim if their taxation returns had not been lodged with the ATO at the time of lodging the claim. In fact, the claim form expressly provided for a claimant to indicate that the returns had not been lodged – see paragraph [53]. The form also allowed for a claimant, such as Ms Singleton (and Mr Neuss), to provide an estimate of the taxable income and of any estimated losses for the 2014/2015 financial year.
The Tribunal notes that Ms Singleton ultimately populated the FTB claim form by hand. In light of this, the Tribunal considers that there was ample opportunity provided for Ms Singleton (and Mr Neuss) to make a notation on the claim form at question 135 and/or 137, to explain the predicament they were facing leading up to 30 June 2016. Ms Singleton was at liberty to either:
(a)insert the estimated income and losses calculated on the basis of the private ruling that was issued by the ATO in March 2016; or
(b)to omit the provision of an estimate for income and losses at questions 138 and 139 altogether, with an explanation as to why she had done so being that they were awaiting a decision from the ATO on the issue.
If Ms Singleton had taken the first option, this would have resulted in the estimate of taxable income being above the income threshold and as a consequence, a determination would have been made that Ms Singleton was not entitled to receive a lump sum FBT payment. Upon the ATO subsequently allowing Ms Singleton’s and Mr Neuss’s objection to the ATO’s refusal to grant the tax ruling (and subject to them applying for and obtaining a taxation assessment amendment) and Mr Karakinos subsequently calculating their estimated income and loss in respect of real estate (which he did on 11 August 2016), Ms Singleton would have been at liberty to advise Centrelink (and/or when this information was subsequently provided by the ATO to Centrelink), it would have automatically triggered an “FTB re-reconciliation” by Centrelink, and consequently resulted in the payment to Ms Singleton of the FTB lump sum payment, in the way described in paragraph [28].
Ms Singleton stated that her accountant would not provide her with the figures that she needed to provide an estimate before they successfully obtained the private tax ruling. The Tribunal accepts that this was so; however, there was nothing to prevent Ms Singleton from calculating those estimates herself, or engaging a new accountant (as she and Mr Neuss had done in the past) to assist her to undertake that calculation on the basis of the private ruling that was made by the ATO in March 2016.
The Tribunal does not accept that by Ms Singleton (or Mr Neuss) submitting the Claim in the way suggested by the Tribunal in the above paragraphs, could be characterised as Ms Singleton providing false and/or misleading information to Centrelink. Information is neither false nor misleading if it is complete and truthful, as it would have been had Ms Singleton provided it to Centrelink in the way described. The Tribunal considers that Ms Singleton’s fear that she would have exposed herself to a potential breach of the APS Code of Conduct by submitting a claim form with estimated income figures is, with respect, wholly misconceived having considered the matters set out in paragraph [47].
At the very least, Ms Singleton should have contacted Centrelink, but did not do so, as any other customer of Centrelink was advised to do in the publically available guidance issued by it as referred to in paragraph [51], in the event that there were special circumstances that had arisen that prevented her from lodging her claim or taxation returns. If she had done so, this would have provided an opportunity for a Centrelink representative with specific knowledge about the processes for claiming FTB to explain to Ms Singleton that her view about the processes relating to claiming FTB was misconceived and to reinforce the obligation on all claimants, including Ms Singleton, to lodge a claim within the required time frame, regardless of whether there was a pending private tax ruling application or the fact that she and her husband had not lodged their individual taxation returns. Ms Singleton’s explanation that she did not do so because she was a Centrelink employee and had the same access to departmental guidance as any Centrelink representative that she might have spoken to had she made that call, is not accepted by this Tribunal. History in this case has demonstrated that Ms Singleton’s confidence in this regard was misplaced. Ms Singleton had not formed a correct understanding about the requirements of claiming the FTB lump sum payment at a time when it mattered, nor had she made any attempt to register with Centrelink the difficulties she was encountering at the relevant time, with respect to lodging the taxation returns and completing the claim form.
The Tribunal considers that the difficulties Ms Singleton encountered leading up to 30 June 2016 did not present an insurmountable obstacle, hindrance or impediment such that it prevented her from completing the FTB lump sum payment claim form or the taxation returns on or before the due date.
The Tribunal has also taken into account the further matters raised by Ms Singleton and Ms Neuss as having contributed to the delay in lodging the claim form. The Tribunal considers that there is insufficient evidence to make a finding that Ms Singleton suffered from a condition of pre-natal depression in the year leading up on 30 June 2016 to an extent that impaired her capacity to take steps to lodge her taxation form and to complete and lodge the claim form. The Tribunal also notes that Ms Singleton’s child was born in 2012.
The Tribunal finds that surgery was performed on Ms Singleton’s child on 23 September 2014 – see paragraph [48]. While it was a simple and straight forward procedure, i.e. the removal of tonsils and adenoids, the Tribunal accepts Ms Singleton’s evidence that they experienced some further issues during her child’s recovery. However, there is insufficient evidence for the Tribunal to accept that these recovery issues contributed to Ms Singleton’s capacity to undertake the steps required of her to lodge the taxation returns and complete and submit the FTB claim form to any significant extent. The Tribunal is also unable to reconcile the suggestion that this was a reason that impacted on Ms Singleton’s capacity to lodge the taxation returns and FBT claim form, with Ms Singleton’s evidence that she was not prepared to lodge the claim form and tax returns until she had received the outcome of the private tax ruling application and subsequent, objection. In other words, it would not appear to have mattered what was going on in Ms Singleton’s life at the time she was awaiting the private ruling and subsequently, the outcome of the objection application, as she had made up her mind not to lodge them until those matters had been determined by the ATO.
The same applies with respect to Ms Singleton’s further suggestion that Mr Neuss’s international travel during November and December 2015 had contributed to the delay. Given the length of the delay in this case and the short duration of these trips (two trips, each of one week’s duration), the Tribunal considers that Mr Neuss’s international travel did not contribute to the delay to any significant extent. Further, the Tribunal is unable to reconcile this contention with Ms Singleton’s evidence that she was not prepared to lodge the claim and taxation returns under the determination of the tax ruling and subsequently, the objection application.
CONCLUSION
The Tribunal has considered all of the above matters raised by Ms Singleton and Mr Neuss in their entirety (i.e. their reliance upon the erroneous advice provided by Mr Karakinos; Ms Singleton’s lack of awareness that she was able to lodge the claim despite the taxation returns not having been lodged; Ms Singleton’s lack of awareness that she was able to lodge the taxation returns pending the determination of the tax ruling application and subsequent, objection application; Ms Singleton’s fear about breaching the APS Code of Conduct; the medical issues experienced in relation to Ms Singleton’s child’s surgery and recovery; Mr Neuss’s international travel in late-2015 and/or Ms Singleton’s post-natal depression), to assess whether there were “special circumstances” that prevented Ms Singleton from lodging the claim and taxation returns before the due date.
Ms Singleton’s circumstances were not such that they could be distinguished from the circumstances of others claiming FTB lump sum payments for past periods.
(a)The Tribunal considers that FTB claimants will frequently encounter uncertainties in relation to estimating their income and loss figures both when making a FTB claim and for the purpose of lodging their taxation returns. This explains why adjustment systems are incorporated into the FTB claims processes and also with the taxation assessment processes allowing for estimates to be provided at first and subsequently adjusted if required. This may take place by a process of reconciliation in the case of administering FTB payments or amendment to taxation assessments in the case of administering taxation.
(b)The Tribunal also considers that it is also not uncommon for FTB claimants to experience periods during which their children experience medical issues, including surgical procedures, from time to time or for claimants to be temporarily absent from Australia due to international travel. They are not unusual events in a typical family environment.
Considering all of the matters referred to in paragraph [79] taken together, the Tribunal is not satisfied that “special circumstances” existed that prevented Ms Singleton from making the Claim and lodging the taxation returns within the required time frame (i.e. on or before 30 June 2016).
The Tribunal does not consider that there is a basis upon which those time frames should be extended to 8 September 2016 under s 10(2)(b)(ii), s 14(2)(ii) and s 14(3)(c)(ii) of the Administration Act. The Tribunal concludes that the Claim lodged by Ms Singleton is not “effective” under the provisions of Administration Act and consequently, is taken not to have been made.
Accordingly the Tribunal affirms the decision of the AAT1.
84.
85.
86. I certify that the preceding eighty three (83) paragraphs are a true copy of the reasons for the decision herein of Member K Parker.
....[sgd]................................................................
Associate
Dated: 26 April 2019
Date of hearing: 7 May 2018
Representative for Applicant: Mr Alan Neuss in part, and otherwise self- represented
Advocate for Respondent: Mr Tim Noonan, FOI and Litigation Branch, Department of Human Services
13