Tanoski and Secretary, Department of Social Services (Social services second review)

[2016] AATA 353

Tanoski and Secretary, Department of Social Services (Social services second review) [2016] AATA 353 (30 May 2016)

Division	GENERAL DIVISION
File Number(s)	2015/3505
Re	Violeta Tanoski
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Professor R McCallum AO, Member
Date	30 May 2016
Place	Sydney

The decision under review is affirmed.

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Professor R McCallum AO, Member

CATCHWORDS

SOCIAL SECURITY – family tax benefit – application made out of time – whether special circumstances prevented applicant from making claim – applicant unaware of changes to application period – decision affirmed

LEGISLATION

A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) ss 5(1), 10(2), 10(2A), 13(1)

CASES

Boscolo v Secretary, Department of Social Security [1999] FCA 106
Dranichnikov v Centrelink [2003] FCAFC 133
Hooker and Secretary, Department of Social Services [2015] AATA 732

REASONS FOR DECISION

Professor R McCallum AO, Member

30 May 2016

INTRODUCTION

1. Mrs Violet Tanoski, the Applicant, has received Family Tax Benefit (FTB) for several years. Mrs Tanoski and her husband have a school age son, and Mrs Tanoski works part-time.

2. Mrs Tanoski lodged her application for lump sum FTB for the 2012-2013 tax year on 6 November 2014. However, on 22 November 2014, the Department of Human Services (Centrelink) refused her application as it was out of time.

3. The application was out of time because the May 2013 federal budget introduced a change in the length of time to lodge applications for lump sum FTB. Previously, claimants had up to two years after the end of the relevant financial year to lodge applications for lump sum FTB. In the May 2013 federal budget, it was announced that claimants for lump sum FTB would only have one further year, and not two further years to lodge lump sum FTB claims.

4. On 12 February 2014, Centrelink sent a letter to Mrs Tanoski which advised her of changes to family assistance payments, including the reduction from two years to one year after the end of the financial year to lodge lump sum FTB claims. The material portion of the letter is as follows.

   From the 2012-13 financial year onwards, you now have one year instead of two years to: submit a lump sum claim for Family Tax Benefit ...

5. Mrs Tanoski sought review of the 27 November 2014 decision to refuse her lump sum FTB from an Authorised Review Officer, and then from the former Social Security Appeals Tribunal (SSAT), but to no avail.

6. On 1 July 2015, the SSAT was merged with the Administrative Appeals Tribunal (AAT) and it is now the Social Services and Child Support Division of the AAT. Accordingly, Mrs Tanoski's application to this Tribunal is an AAT “Second Review”.

   THE LEGISLATION

7. The  relevant provisions are to be found in the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) which for simplicity sake I shall refer to as the FAA Act.

8. Subsection 5(1) makes it clear that the only way to make a valid claim for FTB is in accordance with the relevant provisions of the FAA Act.

9. Subsection 13(1) is as follows:

   If an effective claim is made, the Secretary must determine the claim in accordance with this Subdivision. If a claim is not effective, it is taken not to have been made.

10. Subsections 10(2) and 10(2A) of the FAA Act read 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.

11. These provisions are a little difficult to unpack. Simply put, subsection 10(2) requires applicants to lodge their claims for FTB no later than twelve months after the end of the financial year which is the subject of the claim. For example, an applicant wishing to obtain FTB for the 2014-2015 financial year which ended on 30 June 2015, has until 30 June 2016 to lodge the claim.

12. As I recounted above, previously, claimants had two years after the end of the relevant financial year to claim FTB. However, in the May 2013 federal budget, it was announced that the period for valid claims would be shortened to one year after the end of the relevant financial year. In essence, this is what subsection 10(2) of the FAA Act now requires.

13. Subsection 10(2) paragraph (b) subparagraph (ii) of the FAA Act does give the Secretary of the Department a discretion to accept claims for FTB beyond the one year period in:

    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.

14. However subsection 10(2A) of the FAA Act makes it clear that the Secretary may only exercise the special circumstances discretion for a twelve month period, that is from the beginning of the second year after the end of the relevant financial year to the end of that second year.

15. For example, where an applicant failed to apply for FTB for the 2012-2013 financial year by 30 June 2014, the Secretary may only exercise the special circumstances discretion for the one year period from 1 July 2014 to 30 June 2015.

    SPECIAL CIRCUMSTANCES

16. It will be recalled that subsection 10(2) paragraph (b) subparagraph (ii) of the FAA Act reposes in the Secretary a discretion to extend the period for a person to lodge a claim for FTB “...if the Secretary is satisfied that there are special circumstances that prevented the applicant from making the claim before the end of that first income year”.

17. Over the years, the courts have commented on the meaning of the words "special circumstances".

18. In Dranichnikov v Centrelink [2003] FCAFC 133, Hill J (with Kiefel and Heely JJ agreeing) said at [66]:

    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.

19. In Boscolo v Secretary, Department of Social Security [1999] FCA 106, French J (as he then was) stated at [18]:

    The word “special” conditioning “reasons” or “circumstances” guards the entrance to the exercise of many different statutory discretions. It is generally futile to search for its meaning in terms of other words. It is in essence instrumental, a direction to the decision-maker that the discretion it constrains is not lightly to be enlivened. A Full Court has spoken of it as having content which is “...sufficiently understood not to require judicial gloss” - Beadle v Director-General of Social Security [1984] AATA 176; (1985) 60 ALR 225 at 228. If helpful to speak in terms of its meaning almost all of it comes from context.

20. In Hooker and Secretary, Department of Social Services [2015] AATA 732, Senior Member Toohey commented upon the "special circumstances" discretion in subsection 10(2) paragraph (b) subparagraph (ii) of the FAA Act as follows.

    14In order for the time for making a claim to be extended, the Secretary (and so the Tribunal) must be satisfied, firstly, that circumstances existed that were special and, secondly, that those special circumstances prevented the claimant from making his or her claim within time.

    15The meaning of special circumstances for the purposes of social security law has been considered by the Tribunal and the courts on many occasions. It is an expression “by its very nature incapable of precise or exhaustive definition” and its meaning will depend on the context in which the circumstances occur. The circumstances need not be unique “but they must have a particular quality of unusualness that permits them to be described as special”: Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3; see also, for example, Groth v Secretary, Department of Social Security (1995) 40 ALD 541.

    ...

    18There are a number of provisions in social security law concerning “special circumstances”.  For example, a preclusion period following receipt of a lump sum compensation payment may be waived or waived if the Secretary thinks “it is appropriate to do so in the special circumstances of the case”: s 1184K of the Social Security Act 1999.  Recovery of a debt may be waived “if there are special circumstances” that make it desirable to do so: s 1237AAD of the Social Security Act 1999. 

    19In such cases, it is sufficient for the Tribunal to be satisfied that special circumstances exist.  In the case of a late claim for FTB, the special circumstances must prevent a person from making a claim on time.  That is a more stringent, two-part test.

21. I agree with the analysis of Senior Member Toohey. First, special circumstances must exist, and second, these special circumstances must have prevented the claimant from applying for FTB before the expiration of one year after the relevant financial year.

    THE ISSUE BEFORE THE TRIBUNAL

22. It is common ground between the parties that Mrs Tanoski’s application for lump sum FTB for the 2012-2013 financial year was out of time. It was made four months and six days beyond the end of the claim period.

23. Therefore, the issue which I am required to decide as I stand in the shoes of the Secretary, is whether special circumstances exist in Mrs Tanoski’s case to enable me to extend the claim period and to accept her claim for lump sum FTB.

    THE EVIDENCE OF MRS TANOSKI

24. Mrs Tanoski attended the hearing and she gave sworn evidence.

25. I found Mrs Tanoski to be a truthful witness who fully cooperated with the Tribunal.

26. Mrs Tanoski recounted that her Mother had died on 23 February 2013. Mrs Tanoski explained that for several years before her passing, her Mother had been suffering from degenerative multi-system-atrophy disease (MSA).

27. The former SSAT pithily described the debilitating effects of MSA as follows.

    10. ...The neurological disease affects all autonomic (involuntary) functions including blood pressure, heart rate, bladder function and digestion, and has many similarities to Parkinson's disease, and in her mother's case had required an early tracheotomy.

28. Mrs Tanoski and the rest of the family cared for Mrs Tanoski’s Mother, and she passed away in her own home.

29. Mrs Tanoski explained that she is a second generation Macedonian. In accordance with Macedonian culture, a celebration of life ceremony was held on the first anniversary of her Mother's death, that is on 23 February 2014. Mrs Tanoski explained that there were a great many things to do to prepare for this day-long ceremony such as writing invitations to between 60 and 80 guests and to hire caterers etc. Mrs Tanoski said that amongst other preparations, it was necessary to erect a marble monument for the ceremony.

30. Mrs Tanoski said that given all of the preparations for the 23 February 2014 ceremony, she did not recall receiving or opening the letter from Centrelink dated 12 February 2014.

31. It was said to Mrs Tanoski that in paragraph 26 of the Respondent's statement of facts and contentions, it was noted that Centrelink had publicised the changes to FTB on the internet. Paragraph 26 reads in part as follows.

    ... On 26 September 2013, the Department published on its website 'Changes to the time period for lodging lump sum claims and confirming income' that relevantly stated as follows:

    'From 1 July 2013, the amount of time you have to lodge a lump sum claim…changed. You have one year instead of two years to:  lodge a lump sum claim for Family Tax Benefit… Important dates for claiming You have until 30 June 2014 to do any of the above things for the 2012-2013 financial year…’

32. Mrs Tanoski said that she did not check the internet.

33. Mrs Tanoski said that she and her Husband forwarded their paperwork to their accountant in early 2014, certainly before her Mother's anniversary ceremony on 23 February 2014. Mrs Tanoski said that the accountant was often slow with their books, but as there was no hurry she was content with this arrangement. Mrs Tanoski said that the accountant does not lodge the claim for FTB, but that she always lodges the claim.

34. Mrs Tanoski said that although she could not be sure, she thought the accountant had lodged their tax returns in September or October 2014.

    CONSIDERATION

35. The issue which I am required to decide is as follows. To find for Mrs Tanoski, I must be satisfied that there are special circumstances that prevented Mrs Tanoski from claiming FTB before 30 June 2014.

36. In determining this issue, I shall apply the two part test propounded by Senior Member Toohey in Hooker and Secretary, Department of Social Services [2015] AATA 732 which I have quoted above. First, special circumstances must exist, and second, these special circumstances must have prevented Mrs Tanoski from applying for FTB before 30 June 2014.

37. The argument which Mrs Tanoski made before the Tribunal may be succinctly stated in the following sentences.

38. First, the preparations for her late Mother's celebration of life ceremony meant that she did not recall receiving or opening the 12 February 2014 letter from Centrelink.

39. Second, had she been aware of the information in the letter, she would have ensured that the accountant completed the necessary work well before 30 June 2014, so that she could claim FTB before the cut-off date of 30 June 2014.

40. I have some sympathy for Mrs Tanoski. The care which she and her family took of Mrs Tanoski’s Mother who passed away owing to MSA is highly commendable. This care concluded shortly after her death on 23 February 2013.

41. However, I do not regard the necessary preparations for the celebration of life ceremony on 23 February 2014 as coming within the phrase "special circumstances" in subsection 10(2) paragraph (b) subparagraph (ii) of the FAA Act. These preparations are but part and parcel of our lives, as are births, deaths, weddings and other significant milestone ceremonies.

42. Even if I had found that the preparations were special circumstances, I would have found that the failure of Mrs Tanoski to read the 12 February 2014 letter did not prevent her from lodging the claim for FTB before 30 June 2014. Ignorance of a change in the law, without more, cannot be regarded as preventing the lodgement of the claim on time. The changes to FTB were publicised to the community at large.

43. While it is strictly not a matter for this Tribunal, it does appear to me that the accountant should have been aware of the changes from two years to one year after the end of the relevant financial year to lodge FTB.

    DECISION

44. The decision under review is affirmed.

I certify that the preceding 44 (forty-four) paragraphs are a true copy of the reasons for the decision herein of Professor R McCallum AO, Member

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Associate

Dated 30 May 2016

Date(s) of hearing	17 May 2016
Applicant	In person
Solicitors for the Respondent	Department of Human Services