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

[2006] AATA 990

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 990

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2005/573

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

Applicant

And MICHELLE TAYLOR

Respondent

DECISION

Tribunal Ms N Bell, Senior Member

Date22 November 2006  

PlaceSydney

Decision The decision under review is set aside and instead the Tribunal decides that the debts of $2,256.82 and $2,448.64 for the periods 1 July 2002 to 30 June 2003 and 1 July 2003 to 20 July 2004 should be recovered.

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

Ms N Bell  Senior Member

Family Tax Benefit – Child Support Payment - Reassessment of Entitlement to Family Tax Benefits - Recovery of Debt Waived due to Special Circumstances – No Special Circumstance are found - The Decision Under Review is set Aside.

A New Taxation System (Family Assistance) (Administration) Act 1999

SDSS v Hulls (1991) 22 ALD 570

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

Kirkbright v Secretary, Department of Family and Community Services (2000) 106 FCR 281

REASONS FOR DECISION

Ms N Bell, Senior Member

1.      Ms Taylor lives with her four children and shares care of two of the children with their father.  This arrangement has been in place since May 2002 and was formalised at that time by Orders of the Federal Magistrates Court.  Ms Taylor had received Family Tax Benefit for 100% care of the two children for some time prior to the Court’s Orders.   She continued to receive Family Tax Benefit for 100% of their care until July 2004 when her former husband claimed the benefit for his share of the children’s care.  His claim resulted in the reassessment of Ms Taylor’s entitlement to Family Tax Benefit and debts for the 2002/2003 and 2003/2004 financial years were raised against her in the sums of $2256.82 and $2448.64 respectively.

2.      After the raising and recovery of these debts was affirmed by internal review Ms Taylor applied to the Social Security Appeals Tribunal for review.  The SSAT decided to waive recovery of the debts on the basis that Ms Taylor’s circumstances were special (section 101 of A New Taxation System (Family Assistance) (Administration) Act 1999).  The Secretary seeks to have the SSAT’s decision set aside.

3.      There is no dispute that Ms Taylor was overpaid Family Tax Benefit.  Nor is there any contention that the debts arose because of administrative error (section 95).  Similarly there is no basis on which the debts could be written off (section 97).  The only issue for me to consider, then, is whether, in Ms Taylor’s case, there are special circumstances that make it desirable to waive the debts.  If I find there are such circumstances then I must also consider whether the debts resulted from Ms Taylor knowingly making a false representation or failing to comply with a provision of the Act.

are ms taylor’s circumstances special?

4.      The term “special circumstances” is incapable of precise definition and each case must be considered on its own facts (SDSS v Hulls (1991) 22 ALD 570). However, to be “special” a person’s circumstances must have some quality of unusualness (Re Beadle and Director General of Social Security (1984) 6 ALD 3).

5.      Mrs Taylor’s evidence was that she thought the Child Support Agency would keep Centrelink informed of the rate of child support she was receiving and this was all that was required.  She went to the counter at Centrelink in June 2002 to show a form she had received from the Child Support Agency and to see whether her rate of Family Tax Benefit had been changed.  It is a letter dated 28 June 2002 from the Child Support Agency which notes that both parents are caring for the children but does not specify a percentage share.  It provides an assessment of the amount of child support payable to Ms Taylor by her former husband  in respect of their two children and advises that, if that assessment changes it may affect her entitlement to Family Tax Benefit.  Ms Taylor, however, said she did not tell Centrelink that the care arrangements for the two children had changed.  She said she had no inkling of the relevant percentages.

6.      I note the terms of the Federal Magistrates Court Order which clearly establishes shared care and I also note the numerous correspondence from Centrelink to Ms Taylor, over the period from 13 February 2002 to 24 June 2004, advising her that she must tell Centrelink if she starts to share the care of any of her children with another adult.

7.      Ms Taylor said the first time she was aware that her former husband had claimed Family Tax Benefit was when she received a letter from Centrelink advising her of her overpayment.  She said he had never discussed his claim with her and afterwards told her the debt was her problem.

8.      Ms Taylor has four children aged 19, 17, 12 and 9.  She said they are in good health and her twelve year old son who had been diagnosed with attention deficit disorder is doing well at school and is off medication.  She said, however, that for a range of reasons she has had to move with the children about four or five times in the last five years.

9.      Ms Taylor has Graves disease, a thyroid disorder which is controlled by medication.  That medication produces only some minor side effects.  She said her parents live close by and give her a lot of support.  They are both in good health.

10.     Ms Taylor has part time work that can range from 15 to 40 hours per week.  She has credit card debts and school fees for those of her children in Catholic schools are in arrears.  Her oldest child is working full time and paying some board.  Her 17 year old daughter’s Youth Allowance meets the cost of her school fees and textbooks.  Ms Taylor’s financial circumstances are difficult.

11.     Ms Schuster, for the Secretary, submitted that the fact that Ms Taylor had no warning that her former husband would claim the benefit did not amount to a special circumstance and nor did the fact that he could make that claim retrospectively.  In answer to the argument that the retrospective operation of the claim is an unusual thing in the general scheme of social security law and one which produces an unfair result, Ms Schuster submitted that it is irrelevant to the debts and the fact remains that Ms Taylor was paid in excess of her entitlement under the shared care arrangements.

12.     There is no doubt there is some hardship for Ms Taylor in having to repay money to Centrelink.  However, that she had the benefit of the full rate of Family Tax Benefit when, because she was sharing the care of the children, she was not entitled to it.  It is most unfortunate, however, that her former husband gave no warning of his claim for the benefit and she was caught by surprise. 

13.     The retrospectivity of Ms Taylor’s former husband’s claim is unusual in the scheme of social security.  Most claims, if successful, do not attract arrears of payment.  In Kirkbright v Secretary, Department of Family and Community Services (2000) 106 FCR 281, the Federal Court said that, in the circumstances of that case, unfairness in the application of the social security legislation could amount to special circumstances. Here, however, and in the absence of any other circumstances that could be considered “special”, I do not think the retrospectivity of her former husband’s claim is so unfair as to create special circumstances for Ms Taylor. In this regard, I have looked at her circumstances as a whole, including her, and her children’s, relative good health, the support she receives from her parents and her part time work. There is no doubt that her financial and other circumstances are difficult, but I do not think they have a quality of unusualness that renders them “special”.

14.     It follows that the debts should be recovered.  I recommend that the rate of that recovery, however, should take into account Ms Taylor’s difficult financial circumstances.

decision

15.     The decision under review is set aside and instead the Tribunal decides that the debts of $2,256.82 and $2,448.64 for the periods 1 July 2002 to 30 June 2003 and 1 July 2003 to 20 July 2004 should be recovered.

I certify that the 15 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  4 October 2006
Date of Decision  22 November 2006

Representative for the Applicant    Hannelore Schuster