STOELEN and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
[2011] AATA 475
•7 July 2011
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2011] AATA 475
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2009/3102
GENERAL ADMINISTRATIVE DIVISION ) Re KATRIN STOELEN Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Dr P McDermott RFD, Senior Member
Mr P Wulf, MemberDate7 July 2011
PlaceBrisbane
Decision The Tribunal affirms the decision under review. .................[Signed]......................
Senior Member
CATCHWORDS
SOCIAL SECURITY – Family tax benefit – Applicant failed to notify Centrelink of overseas travel prior to departure – Applicant ineligible for family tax benefit during periods spent overseas and during returns for less than 13 weeks – Overpayment of family tax benefit – Debt due to the Commonwealth – No scope for write off – No administrative error or special circumstances justifying waiver – Decision under review affirmed
A New Tax System (Family Assistance) Act 1999 (Cth) ss 21, 24, 62, 95, 97, 101
A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) ss 7, 25
Administrative Appeals Tribunal Act 1975 (Cth) ss 37, 42D
REASONS FOR DECISION
7 July 2011 Dr P McDermott RFD, Senior Member
Mr P Wulf, Member1. The applicant[1], Mrs Katrin Stoelen, has appealed against a decision of the Social Security Appeals Tribunal (“SSAT”)[2] and a subsequent reassessment by Centrelink[3] on the direction of this Tribunal that she should be required to repay a debt to the respondent, this being Family Tax Benefit (“FTB”) paid to her while she was outside of Australia and/or was in Australia but left Australia within a 13 week period after her return.
[1] Exhibit A, T-Document 1/1 – 4.
[2] Exhibit A, T-Document 2/5 – 12.
[3] Annexure A.
2. In November 2008, Centrelink, on receipt of immigration information from the Department of Immigration and Citizenship (“DIAC”)[4] of the applicant’s travels outside Australia, reviewed the applicant’s entitlement to FTB. The review determined that as a result of extensive travel outside of Australia, the applicant no longer qualified for FTB and had been overpaid FTB for four periods between 2003 and 2008, specifically:
[4] Exhibit B.
(a)19 December 2002 to 30 June 2003;
(b)1 July 2003 to 30 June 2004;
(c)1 July 2005 to 30 June 2006; and
(d)11 October 2007 to 1 December 2008.[5]
[5] Exhibit H.
3. Centrelink advised the applicant that it had made a decision that she no longer qualified for FTB payments and must repay a debt for the periods when she was overseas.[6]
[6] Exhibit A, T-Document 40-43/131 – 136.
4. On 30 January 2009, the applicant’s husband requested that the decision be reconsidered.[7] On 17 February 2009, the Original Decision Maker (“ODM”) affirmed the original decision.[8] An Authorised Review Officer (“ARO”) reviewed and affirmed the decision on 20 March 2009 that the applicant did not qualify for FTB, had a debt for the periods between 2003 and 2008 and was required to repay the debt.[9]
[7] Exhibit A, T-Document 46/139 – 140.
[8] Exhibit A, T-Document 50/144.
[9] Exhibit A T-Document 53/150 – 156.
5. The applicant sought review by the SSAT on 16 April 2009. On 13 May 2009, the SSAT affirmed the decision, finding that the applicant was required to repay a debt for overpayment of FTB.[10] On 3 July 2009, the applicant applied to this Tribunal for a review of the SSAT decision.
[10] Exhibit A, T-Document 2/5 – 12.
6. This Tribunal originally heard the matter on 21 May 2010. At that time, pursuant to s 42D of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act), the Tribunal set aside the SSAT decision. It remitted the matter back to Centrelink for the respondent to reconsider the decision based on the evidence provided at the hearing, including whether the applicant’s husband could jointly claim FTB for the given periods. The Tribunal did not set a specified date for that review.
7. The decision was reviewed by an ARO on 14 December 2010, who affirmed the original decision.[11] Under s 42D(8) of the AAT Act, the proceeding resumed before the Tribunal on 9 May 2011 with additional evidence and submissions.
[11] Annexure A.
8. This Tribunal now affirms the original and subsequent decision for the reasons contained below.
ISSUES
9.The relevant issues for the Tribunal to consider in this matter are:
(a)Whether FTB can be paid to both parents for a single period jointly;
(b)If not, whether the applicant has been overpaid FTB through her extended and multiple trips overseas between 2003 and 2008;
(c)If the applicant has been overpaid FTB, does that overpayment constitute a debt to the Commonwealth; and
(d)If so, should the discretion to waive or write off all or part of the debt be exercised?
LEGISLATIVE SCHEME
10. Section 21 of the A New Tax System (Family Assistance) Act 1999 (Cth) (“the FA Act”) describes who is eligible to receive FTB. It provides as follows:
(1) An individual is eligible for family tax benefit if:
a) the individual:
i.has at least one FTB child; or
ii.is not an absent overseas recipient and has at least one regular care child who is also a rent assistance child; and
b) the individual:
i.is an Australian resident; or
(ia) is a special category visa holder residing in Australia; or
ii.satisfies subsection (1A); and
c) the individual’s rate of family tax benefit, worked out under Division 1 of Part 4, is greater than nil.
(1A)An individual satisfies this subsection if the individual is the holder of a visa determined by the Minister for the purposes of subparagraph 729(2)(f)(v) of the Social Security Act 1991, and either of the following applies:
a) the individual is in Australia; or
b) the individual:
i.is temporarily absent from Australia for a period not exceeding 13 weeks; and
ii.the absence is an allowable absence in relation to special benefit within the meaning of Part 4.2 of that Act.
(2)However, the individual is not eligible for family tax benefit if another provision of this Subdivision so provides.
11. Under s 26 of the FA Act, only one member of a couple is eligible for FTB. It states that:
(1)For any period when 2 individuals who are members of a couple would otherwise be eligible at the same time for family tax benefit in respect of one or more FTB children or regular care children, only one member is eligible.
(2)The member who is eligible is the one determined by the Secretary to be eligible, having regard to:
a)whether one member of the couple is the primary carer for the child or children; and
b)whether the members have made a written agreement nominating one of them as the member who can make a claim under Part 3 of the A New Tax System (Family Assistance) (Administration) Act 1999 for payment of family tax benefit in respect of the child or children.
12. The A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (“the Administration Act”) also discusses who may claim for FTB. Section 7 states that an ‘individual’ or ‘approved care organisation’ may make a claim for payment of current and past FTB.
13. The importance of these sections is that both the FA Act and the Administration Act only provide for an “individual” to be paid FTB and, moreover, that FTB can only be paid to one member of a couple and not to joint parties.
14. With respect to any absences overseas for both the FTB children and the FTB recipient, ss 24 and 62 of the FA Act are relevant. Section 24 provides for the absence of FTB children overseas and the maximum period of eligibility for FTB while an individual is overseas, while s 62 relates to the effect on an individual’s rate of FTB while the individual is absent from Australia.
15.The relevant subsections of s 24 of the FA Act are:
(4)If an individual leaves Australia, the maximum period for which the individual can be eligible for family tax benefit during that absence from Australia is the period of 3 years beginning on the first day of that absence.
(5) If:
a)an individual who has been absent from Australia for more than 13 weeks, but less than 3 years, returns to Australia; and
b)the individual leaves Australia again less than 13 weeks later;
c)the individual is taken not to have returned to Australia for the purposes of subsection (4).
(6) If:
a)an individual is eligible for family tax benefit while the individual is absent from Australia; and
b)the individual then ceases to be eligible for family tax benefit because of the application of subsection (4) or a previous application of this subsection; and
c)the individual returns to Australia; and
d)the individual leaves Australia again less than 13 weeks after returning to Australia;
the individual is not eligible for family tax benefit at any time during the absence from Australia referred to in paragraph (d).
16. Section 62 relates to the effect on an individual’s rate of FTB while the individual is absent from Australia:
(1)Subsection (4) modifies the operation of Schedule 1 in working out an individual’s rate of family tax benefit for a period during which the individual is an absent overseas recipient;
(2)If an individual leaves Australia, the individual is an absent overseas recipient for any period that occurs:
a) during that absence from Australia; and
b)after the end of the period of 13 weeks beginning on the first day of that absence
If:
a)an individual is eligible for family tax benefit while the individual is absent from Australia; and
b)the individual then becomes an absent overseas recipient because of the application of subsection (2) or a previous application of this subsection; and
c)the individual returns to Australia; and
d)the individual leaves Australia again less than 13 weeks after returning to Australia;
the individual is an absent overseas recipient for any period that occurs during the absence from Australia referred to in paragraph (d).
…
17. As to the requirements to notify Centrelink of an FTB recipient’s trips overseas, s 25 of the Administration Act relates to the obligations of an FTB recipient to notify of any changes that occur in their circumstances. Section 25(1) states that:
(1) If, after a claimant becomes entitled to be paid family tax benefit by instalment:
a)anything happens that causes the claimant to cease to be eligible for family tax benefit on the days for which the claimant will become entitled to be paid the benefit under the determination concerned, or to become eligible for a daily rate of family tax benefit that is less than that specified in the determination; or
b)the claimant becomes aware that anything is likely to happen that will have that effect;
the claimant must, in the manner set out in a written notice given to the claimant under s 25A, as soon as practicable after the claimant becomes aware that the thing has happened or is likely to happen, notify the Secretary that it has happened or is likely to happen.
18. The relevant section as to debts arising in respect of family assistance other than child care benefit, child care rebate and family tax benefit advance is s 71 of the Administration Act. It provides:
No entitlement to amount
1) If:
a)an amount has been paid to a person by way of family tax benefit, baby bonus or maternity immunisation allowance (the assistance) in respect of a period or event; and
b)the person was not entitled to the assistance in respect of that period or event;
the amount so paid is a debt due to the Commonwealth by the person.
Overpayment
2) If:
a)an amount (the received amount) has been paid to a person by way of assistance; and
b)the received amount is greater than the amount (the correct amount) of assistance that should have been paid to the person under the family assistance law;
the difference between the received amount and the correct amount is a debt due to the Commonwealth by the person.
19. If it is found that the applicant has a debt, there are a number of provisions that allow the Tribunal to either waive or write off the debt under the Administration Act. Section 95 allows for a debt to be written off. Section 97 allows debts to be waived if the debt is attributable solely to an administrative error made by the Commonwealth. Section 101 of the Act allows the right to recover all or part of a debt to be waived in special circumstances. Under s 101, the Tribunal must be satisfied that:
1.the debt did not result wholly or partly from the debtor or another person knowingly:
(i) making a false statement or a false representation; or
(ii)failing or omitting to comply with a provision of the family assistance law; and
2.there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
3. it is more appropriate to waive than to write off the debt or part of the debt.
THE EVIDENCE
20. The evidence before the Tribunal was comprised of:
a)The “T-Documents” lodged by the respondent in accordance with s 37 of the AAT Act;[12]
b)A document tendered by the respondent, being Travel Logs of the applicant from DIAC;[13]
c)The respondent’s Statement of Facts and Contentions dated 29 January 2010;[14]
d)The applicant’s Statement of Facts and Contentions dated 21 May 2010[15]
e)The respondent’s Statement of Facts and Contentions dated 29 January 2010;[16]
f)The respondent’s Submissions dated 27 April 2011;[17]
g)Transcript of the hearing of 21 May 2010;[18] and
h)Calculations of Ms Sue Howells for the respondent dated 5 May 2011.[19]
[12] Exhibit A, T-Document 1 – 59/1 – 191.
[13] Exhibit B.
[14] Exhibit C.
[15] Exhibit D.
[16] Exhibit E.
[17] Exhibit F.
[18] Exhibit G.
[19] Exhibit H.
ANALYSIS
21. The applicant’s evidence was that she and her husband operated a wine import and export business which required them to travel to Europe (Belgium originally) constantly. The applicant is the mother of three children that live on the Sunshine Coast with her husband. When she is away it would appear that her husband looks after the children and, alternatively, when he is away the applicant cares for the children. The evidence indicated that there were a few occasions when both parents were away at the same time and during those periods the grandparents of the children or some other person/s would care for them. There was also at least one occasion when the children accompanied the parents to Europe for an extended period.
22. The applicant originally applied for FTB on 21 February 2003.[20] Between 2003 and 2008, the applicant received FTB payments from Centrelink; however it would appear that her husband was the recipient of payments from 11 February 2006 to 10 August 2007. In a letter dated 12 March 2003, the applicant was advised that she would be paid FTB and that she had obligations when receiving that payment, with the letter clearly spelling out those obligations, including advising Centrelink of any extended trips outside Australia.[21]
[20] Exhibit A, T-Document 10/50 – 73.
[21] Exhibit A, T-Document 11/74 – 76.
23. There was some discussion both at the original hearing and the subsequent hearing of this matter as to whether FTB could be paid to both parents considering that one would be away while the other looked after the children. This appeared to also be something that was raised in the letter from the applicant’s husband on 29 January 2009. Unfortunately, consistent with s 21 of the FA Act and s 7 of the Administration Act, FTB can only be provided to an individual and one parent. Therefore the applicant’s husband could not claim FTB for those periods now, although it would have been totally possible for him to claim the relevant monies when the applicant was away; but both the applicant and her husband failed to do this. Therefore the Tribunal must, consistent with the law, find that the answer to the first issue is in the negative and FTB cannot be paid to both parents at once.
24. The next question is whether the applicant has been overpaid FTB through her extended and multiple trips overseas. Between 2003 and 2008, the respondent submits that the applicant spent extended periods away from Australia and/or when she returned to Australia, she again left within a period of 13 weeks. This is based on the information provided by DIAC. Under s 24 of the FA Act, this would make the applicant ineligible for FTB.
25. When making an assessment of the time spent overseas, Exhibit B is of assistance to the Tribunal. The applicant conceded that except for one period listed in Exhibit B, this being the final dates listed when the applicant disputed that she was away for a period of 40 weeks and three days, the rest of the dates listed were accurate. The applicant did not contest any of the other times she was away.
26. The applicant contended that she was unaware of her obligations to advise Centrelink when she would be away and when she re-entered Australia, and therefore she should not be forced to repay any debt owing. The oral evidence was that the applicant appeared to suggest that she was not aware that she was required to advise Centrelink prior to her travels but she did so when she returned and, on her evidence, she always did this.
27. There are strict obligations on the applicant, being an FTB recipient, as to what she is required to do. For example, the applicant has an obligation under s 25 of the Administration Act to advise of any change in her circumstances for the receipt of FTB. These circumstances include leaving and re-entering Australia and advising both prior to leaving Australia and on re-entry to Australia. The applicant failed to comply with those obligations on the vast majority of occasions on her own evidence.
28. Further, in the letter sent to the applicant on 12 March 2003[22] by Centrelink when she first received FTB during this period (it is noted she was paid FTB as far back as 1998), the letter provided specific instructions of the applicant’s obligations if travelling outside of Australia. However, it appears from her own evidence that the applicant did not read the letters fully and as this information was at the back of the letter, on her own admission she did not ever read this part of any letter. This is clearly a failing by the applicant.
[22] Exhibit A, T-Document 11/74 – 76.
29. As a result of being paid FTB without advising of the changes in her circumstances, the applicant has been overpaid FTB. The calculation prepared by Centrelink determined that the applicant owed the following debts to Centrelink:
(a)19 December 2002 to 30 June 2003 - $2,607.94
(b)1 July 2003 to 30 June 2004 - $6,688.71;
(c)1 July 2005 to 30 June 2006 - $3,924.71; and
(d)11 October 2007 to 1 December 2008 - $7,931.44.[23]
[23] Exhibit H.
30.This equals a total amount owing of $21,152.80.
31. There appears to be no doubt that these calculations are correct in that they specifically show that when the applicant returned to Australia but then left again within 13 weeks, she had continued to receive FTB when she had no rights to be paid FTB due to the non-compliance with the FA Act. She was therefore overpaid.
32. In the decision of the ARO sent to the applicant concerning her overpayment, there is a specific section of the letter relating to the 2007 – 2008 financial year. On the bottom of page 8[24] of that letter, there is a specific recommendation made by the ARO that the applicant’s husband should complete and lodge a claim for FTB and test his eligibility for the period when the applicant was deemed to be ineligible. The requirements were that he complete and lodge the claim by 30 June 2010 for it to be valid.
[24] Exhibit A, T-Document 53/155.
33. However, it would appear that no action was taken by the applicant’s husband. The Tribunal considers that the respondent can do no more than provide the applicant and her husband with advice and recommendations. If the applicant does not take any action with respect to that advice, it can only be deemed that this is a failing on the applicant’s part.
34. More importantly, the respondent also adduced evidence that the applicant’s husband claimed and received FTB payment from the Australian Taxation Office for the period 11 October 2007 until 26 May 2008 in the amount of $3,297.17. This is during the period when Centrelink contends that the applicant was overpaid. This, in the Tribunal’s opinion, demonstrates that the error was caused solely by the applicant.
35. There was also concern as to some of the evidence that was provided to the Tribunal. At the first hearing, the applicant appeared to be truthful; however, there were a number of issues that arose casting concern over her evidence. For example, the applicant denied receiving material sent to her from the respondent via e-mail. However, it is clear that she received the material as she sent a reply e-mail to the respondent thanking them for the documents. This requires the Tribunal to place some reservations on the evidence the applicant provided during the hearing.
36. It is therefore clear that the applicant has been overpaid FTB, that there is a debt owed to the Commonwealth and the debt can be claimed under s 71 of the Administration Act.
37. The only issue remaining is as to whether the Tribunal should exercise if discretion to waive or write off all or part of the debt.
38. The relevant sections of the Administration Act regarding waiver are ss 97 and 101. It would appear on the face of the legislation that s 97 is irrelevant as the overpayment is not as a result of some administrative error by the Commonwealth. The Tribunal finds that the only reason for overpayment is due to the failure of the applicant to properly notify Centrelink of her changes in circumstances, even though she was advised of her obligations on numerous occasions.
39. The Tribunal has discretion under s 101 of the Administration Act to waive a debt on the grounds of special circumstances. The Tribunal will not normally waive a debt if it resulted from a recipient knowingly failing or omitting to comply with a provision of the family assistance law. Further, the Tribunal would have to find that there are special circumstances (other than financial hardship alone) that make it desirable to waive; and it is more appropriate to waive than to write off the debt or part of the debt.
40. The evidence is that the applicant failed in her obligations to comply with the FA Act and the Tribunal finds no reason why the applicant should have the debt waived. It is also noted that the applicant made no submission as to any special circumstances that may exist, other that she would have difficulties paying the amount back in full immediately. As noted in s 101 of the Administration Act, this is not a special circumstance in its own right.
41. We have also considered whether to write off the debt under s 95 of the Act. Under subsection (2) of that provision, the debt can be written off if one of the following conditions is satisfied;
(a) the debt is irrecoverable at law; or
(b) the debtor has no capacity to repay the debt; or
(c) the debtor's whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d) it is not cost effective for the Commonwealth to take action to recover the debt.
After reviewing the material before us, we are not satisfied that any of these conditions are met in this case. Accordingly, the debt cannot be written off.
DETERMINATION
42. The Tribunal finds that the applicant was overpaid for FTB due her time spent outside Australia and/or her subsequent departure from Australia within 13 weeks for all periods from
a)19 December 2002 to 30 June 2003;
b)1 July 2003 to 30 June 2004;
c)1 July 2005 to 30 June 2006; and
d)11 October 2007 to 1 December 2008.
43. All of the evidence indicates that the applicant was properly advised of her obligations under the FA Act and Administration Act but clearly failed to comply with those obligations. Further, based on those failures and omissions, the Tribunal does not find a reason to exercise its discretion to waive all or part of the debt under s 101 of the FA Act. The applicant is required to repay the debt owed. The Tribunal recommends the parties formulate a repayment plan for the recovery of the debt.
44.The Tribunal affirms the decision under review.
I certify that the 44 preceding paragraphs are a true copy of the reasons for the decision herein of Dr P McDermott, RFD, Senior Member and Mr P Wulf, Member
Signed: ..........................[Signed].....................................
Research AssociateDate of Hearing 9 May 2011
Date of Decision 7 July 2011
Counsel for the Applicant Applicant was self-represented
Solicitor for the Respondent Mr Matthew Hawker, Sparke Helmore Lawyers
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