Smith and Secretary, Department of Families, Community Services and Indigenous Affairs

[2007] AATA 1941

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1941

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q 200700036

GENERAL ADMINISTRATIVE  DIVISION		)
Re		Ellouise Smith

Applicant

And Secretary, Department of Famillies, Community Services and Indigenous Affairs

Respondent

DECISION

Tribunal Senior Member P McDermott, RFD

Date12 November 2007

PlaceBrisbane

Decision The Tribunal sets aside the decision under review and remits it to the respondent for recalculation in accordance with the Decision in [2007] AATA1938 (No. Q200700035) and these reasons.  The Decision is otherwise affirmed

.................[Sgd].............................

Senior Member

Administrative Appeals Tribunal

ADMINISTRATIVE APPEALS TRIBUNAL                 )

)No: Q 200700036

General Administrative Division           )

Re: Ellouise Smith
Applicant

And: Secretary, Dept of Families, Community Services
And Indigenous Affairs
Respondent

CORRIGENDUM

TRIBUNAL:             Senior Member P McDermott RFD

DATE:                      20 November 2007

PLACE:                   Brisbane

The Decision and Reasons for Decision dated 12 November 2007 is amended so that the decision should read:

The Tribunal affirms the decision not to waive the debt.

...............................................................
  SENIOR MEMBER  

CATCHWORDS

SOCIAL SECURITY – Payments & Allowances – family tax benefit – overpayment – waiver of debt – no error, write-off or special circumstances

A New Tax System (Family Assistance) (Administration) Act 1999 ss 71, 95, 97, 101

Secretary, Department of Social Security v Hales (1998) 51 ALD 695

Dranichnikov and Another v Centrelink and Another (2003) 75 ALD 134

Groth v Secretary, Department of Social Security (1995) 40 ALD 541

REASONS FOR DECISION

12 November 2007 Senior Member P McDermott, RFD         

Introduction

1.      Ms Ellouise Smith has sought a review of a decision that she be paid 70% of family tax benefit for her children for the period of 1 July 2003 until 30 June 2005 (“the relevant period”). Ms Smith contended that she had her children in her care for a greater percentage of time which would amount to about 90% of that period.

Decisions

2.      The respondent decided on 9 July 2007 that Ms Smith was entitled to be paid 70% of family tax benefit for her three children for the period 1 July 2003 to 30 June 2005. That decision also determined the family tax benefit which was payable to Ms Smith for the period of 1 July 2005 to 14 March 2006. However, the parties have agreed to the appropriate percentages, which were determined by the Social Security Appeals Tribunal for the latter period.

3.      On 26 April 2006 an authorised review officer affirmed the decision that Ms Smith was entitled to be paid 70% of family tax benefit for her three children for the period of 1 July 2003 until 30 June 2005.

4.      On 22 December 2006 the Social Security Appeals Tribunal affirmed the decision of the authorised review officer.

5.      The applicant has sought a review of the decision of the Social Security Appeals Tribunal. 

Entitlement of the applicant to family tax benefit

6.      I have in a separate decision set aside the decision under review and remitted the matter to the Secretary with the direction to adjust the family tax benefit payments so that for the period 1 July 2003 to 30 June 2005, family tax benefit be adjusted in accordance with my reasons.

Overpayment of family tax benefit

7.      At present Ms Smith has received an overpayment of family tax benefits for the relevant period. She had received payment for 100% of the family tax benefit for the relevant period.   The actual amount of the overpayment (if any) is to be calculated.

8. The amount of the overpayment is a debt due to the Commonwealth pursuant to s 71(2) of the A New Tax System (Family Assistance) (Administration) Act 1999 (“the Act”).

9.      It is understandable in this case for the Secretary to recover the overpayment. As French J explained in Secretary, Department of Social Security v Hales (1998) 51 ALD 695 at 696: “The taxpayer is entitled to expect that in the ordinary course money paid to people which they are not entitled to receive will be recovered”.

Recovery of overpayment

10. I must now consider whether there are any reasons why the overpayment should not be recovered. Under the the Act it is possible for an overpayment of family tax benefit to not be recovered: where the Secretary writes off the debt (see s 95); where the Secretary is required to waive the debt due to administrative error (s 97); or where the Secretary has a discretion to waive the debt due to special circumstances (s 101).

Debt write-off

11. I do not consider that the debt should be written off. Under the the Act, the Secretary can write off the debt where the debtor does not have any capacity to repay the debt: see s 95(2)(b). That Act also provides that if the debt can be recovered by deductions from payments of family tax benefit then a debtor is taken to have capacity to repay the amount unless the deductions would result in severe financial hardship: see s 95(4).

12.     While I accept that the applicant has a tight budget, I do not consider that her case is one of severe financial hardship.

Waiver of debt arising from error

13. I have also considered whether the Secretary should be required to waive the debt due to error pursuant to s 97 of the Act. This provision is applicable where the debt arose solely as a result of administrative error, and where the payments were received in good faith and where payment of the debt would cause severe financial hardship.

14. As I have previously ruled that payment of the debt would not cause severe financial hardship, I do not consider that the debt should be waived. Having made that ruling it is unnecessary for me to express an opinion on whether the debt arose solely as a result of administrative error or whether the payments were received in good faith. However, even if the debt arose from administrative error (as contended by the applicant), that of itself would be insufficient to enable the debt to be waived under s 97.

Waiver of debt due to special circumstances

15. I have already mentioned that under s 101 of the A New Tax System (Family Assistance) (Administration) Act 1999, the Secretary may waive the debt due to special circumstances. In considering this issue I mention that I am bound by the Federal Court of Australia which has held that “special circumstances” are circumstances which take a case “out of the ordinary”: see Dranichnikov and Another v Centrelink and Another (2003) 75 ALD 134 at 148.

16.     As Kiefel J explained in Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545 “there must be some feature out of the ordinary” for there to be special circumstances in a case.

17. Having examined the material before me I find that there are no special circumstances present which would justify me in exercising the discretion vested in the Secretary under s 101 of the Act.

Decision

18.     The Tribunal sets aside the decision under review and remits it to the respondent for recalculation in accordance with the Decision in [2007] AATA1938 (No. Q200700035) and these reasons.  The Decision is otherwise affirmed.

I certify that the 18 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member P McDermott, RFD.

Signed:         .....................................................................................
  Stephen O’Grady, Associate

Date of Hearing  16 July 2007
Date of further submissions     9 August 2007
Date of Decision  12 November 2007
For the applicant  Self-represented
For the respondent                   Ms Hamilton, a departmental advocate