Stewart; Secretary, Department of Family, Community Services and Indigenous Affairs and

[2007] AATA 1004

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2007] AATA 1004

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2006/1001

GENERAL ADMINISTRATIVE DIVISION		)
Re		SECRETARY, DEPARTMENT OF FAMILY, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Applicant

And TONI-ANNE STEWART

Respondent

DECISION

Tribunal Ms N Bell, Senior Member

Date3 January 2007  

PlaceSydney

Decision The decision under review is set aside and instead the Tribunal decides that the debt should be recovered.

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

Ms N Bell
  Senior Member  

SOCIAL SECURITY – Overpayment – Debt Recovery – Family Tax Benefit – Debt of Overpayment Raised – Was There an Administrative Error – Was the Payment Received in Good Faith – Would the Person Suffer Severe Financial Hardship – No Financial Hardship Suffered if Debt is Recovered – No Special Circumstances – Decision Under Review is Set Aside – Debt Should be Recovered

A New Tax System (Administration) Act 1999

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

REASONS FOR DECISION

Ms N Bell, Senior Member

1.      In 2004 Ms Stewart decided she no longer wished to receive her Family Tax Benefit fortnightly and elected instead to receive it at the end of the financial year when her taxable income would be known and there would be no room for error or overpayment.  She advised Centrelink of this and of her decision to have her Parenting Payments cancelled.  In August 2005 Ms Stewart claimed Family Tax Benefit for the 2005/2006 year and, on the claim form, gave her marital status as “partnered” since 10 June 1995.  She had previously been separated from her husband but reconciled with him in September 2004.

2.      In September 2005, when Centrelink calculated the amount of Family Tax Benefit to be paid to Ms Stewart for the 2004/2005 year, it did not recognise her as partnered, in accordance with her advice, and calculated the amount on the basis that she was single.   Mr Stewart’s annual income of over $74,000 should have been taken into account as well as Ms Stewart’s income of $23,617.  An amount of $5,782.84 was paid by direct deposit to her bank account on 21 September 2005.

3.      Ms Stewart was puzzled by this deposit and, after finding out who had made it, telephoned Centrelink on 21 September 2005 to find out why such a large amount had been paid to her.  The Centrelink officer she spoke to told her she would look into it and get back to her.  On 26 October 2005 a Centrelink officer telephoned Ms Stewart and, after Ms Stewart confirmed that she had reconciled with her husband in September 2004, the officer advised her that a debt of overpayment would be raised.  Her Family Tax Benefit entitlement was calculated again and it was decided she had been overpaid by $5,490.49.

4.      When the Social Security Appeals Tribunal reviewed the decision to raise the debt it decided to waive recovery of half of the amount.  The Secretary has sought a review by this Tribunal of the Social Security Appeals Tribunal’s decision and submits there is no basis on which recovery of the debt should be waived.

issues

5.      The amount of the debt is not in dispute and Centrelink concedes that the debt arose solely from its administrative error.

6.      The only issue for me to consider, then, is whether the debt, or any part of it, should be recovered.  There are two legislative bases, in the circumstances of this case, on which I may consider the question of waiver.  Section 97 of the A New Tax System (Administration) Act 1999 provides for waiver where the debt is attributable solely to administrative error, the payment was received in good faith and the person would suffer severe financial hardship if the debt were not waived.   While administrative error is established here, issues remain as to Ms Stewart’s good faith and severe financial hardship.  Section 101 of the Act provides for waiver where there are special circumstances that make it desirable to waive and the debt did not result from the person failing to meet obligations under the law.  While there is no suggestion of a failure by Ms Stewart to meet her obligations under the law, the Secretary submitted that her circumstances are not special.

severe financial hardship

7.      Ms Stewart said she separated from her husband again in August 2006.  He pays her $270.00 per fortnight and she generally earns approximately $1,000.00 per week on a casual basis but, at the time of the hearing, she had been told she would only have one more week of work before the middle of January 2007.

8.      Ms Stewart’s son is 16 years old and it is open to him to claim Youth Allowance.  Ms Stewart is still not claiming fortnightly payments of Family Tax Benefit.

9.      Ms Stewart’s regular expenses are not unusual.  They include fortnightly mortgage payments of $600.00, rather high maintenance costs for her old car, credit card payments of approximately $90.00 per fortnight and the costs of food and utilities.  She is in need of some dental work and needs new spectacles.  Her financial circumstances are tight but I do not consider them to be severe – nor would they be severe if a small withholding was made in recovery of the debt.   Ms Stewart’s income, even if she had no further employment and had to claim a social security payment, would still be in excess of the maximum social security payment available to her, given the regular maintenance she receives from her former partner.

10.     Given that she would not suffer severe financial hardship if the debt is not waived, I cannot exercise the discretion to waive it under section 97 of the Act.

special circumstances

11.     After Ms Stewart spoke to a Centrelink officer on 21 September 2005, she waited until 6 October, a little over two weeks, before she spent any of the money she had been paid.  On that day she bought a television for $2,400.00.  After that she paid some bills.

12.     There was some delay on the part of Centrelink.  Having undertaken to “get back to her”, no Centrelink officer contacted her about the payment until 26 October 2005, about six weeks later.  By that time all the money had been spent.  But I am mindful that a large part of it had already been spent by 6 October 2005.  I am also mindful of the file note written by the officer who spoke to Ms Stewart on 21 September.  That note raises the question of whether Ms Stewart’s partner’s income had been taken into account in the calculation of the payment.  Ms Stewart confirmed that the note is probably an accurate record of the conversation.  If that is so, she must have had some level of awareness of the potential for the money to have been paid to her in error.

13.     Ms Stewart said she discussed it with her accountant and reached the view that Centrelink must have been aware of the maintenance paid to her by her partner and of her partner’s income.  She said she is familiar with Centrelink and, generally, when they say they will get back to you, they do so in one or two days.  She said that, given her discussion with her accountant and Centrelink’s silence, by 6 October she thought it would be alright to spend the money.  She said she did not contact Centrelink again before beginning to spend the money because she only has a mobile phone and it would cost a great deal to be kept on hold and in a queue while she waited to speak to an officer.

14.     Ms Stewart said her health is alright, apart from some arthritis in her hand and neck and her son is well.  Her mother, who is 80, had eye surgery recently.

15.     I do not consider these circumstances to be special.   The only unusual circumstances are Centrelink’s error and its delay in remedying it.  Ms Stewart’s reliance on Centrelink’s delay in getting back to her must be limited by her familiarity with Centrelink and her awareness that there may have been a question about the inclusion of her partner’s income in the assessment of her entitlement.  In any event, the time she waited before she began to spend the payment was short – a little more than two weeks.  Her first purchase was a television, using almost half of the payment made to her.  In Re Beadle and Director-General of Social Security (1984) 6 ALD 1, the Tribunal notes that “special circumstances” must be unusual, exceptional or uncommon. These circumstances do not have the quality of unusualness required to make them “special”. They are not unusual by virtue of unfairness, hardship or otherwise. Difficult perhaps, but not exceptional.

decision

16.     The decision under review is set aside and instead the Tribunal decides that the debt should be recovered.

I certify that the 16 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Bell, Senior Member

Signed: ......[Sanjiv Shah]......
  Associate

Date of Hearing  15 November 2006
Date of Decision  3 January 2007

Representative for the Applicant    Rachael Quinn