Teddy and Secretary, Department of Social Services
[2013] AATA 828
•22 November 2013
[2013] AATA 828
Division General Administrative Division File Number
2013/1233
Re
Nita Teddy
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Deputy President S D Hotop Date 22 November 2013 Place Perth The decision under review is affirmed.
.........................[sgd]...............................................
S D Hotop
Deputy President
CATCHWORDS
SOCIAL SECURITY – family tax benefit (FTB) – applicant granted FTB from January 2010 – applicant’s FTB cancelled in May 2012 – applicant never eligible for FTB – amount of FTB paid to applicant a debt due to Commonwealth – debt not attributable solely to administrative error by Commonwealth – no special circumstances – debt cannot be waived – debt cannot be written off – decision under review affirmed
LEGISLATION
A New Tax System (Family Assistance) Act 1999 (Cth), s 21(1) and s 22
A New Tax System (Family Assistance)(Administration) Act 1999 (Cth), s 71, s 71A, s 95, s 97 and s 101
REASONS FOR DECISION
Deputy President S D Hotop
22 November 2013
Introduction
Nita Teddy (“the applicant”) has applied to the Tribunal for review of a decision of the Social Security Appeals Tribunal (“SSAT”), dated 7 February 2013, which affirmed a decision of Centrelink Authorised Review Officer (“ARO”) that the applicant had been overpaid family tax benefit (“FTB”) in the amount of $25,064.27 for the period from 1 January 2010 to 18 May 2012, and that the amount of that overpayment is a debt due to the Commonwealth by the applicant and should be recovered from her.
The Evidence
The evidence before the Tribunal comprised:
·the documents (“T Documents”, T1–T51, pp 1–183) lodged on behalf of the Secretary, Department of Social Services (“the respondent”) in accordance with s 37 of the Administrative Appeals Tribunal Act 1975 (Cth); and
·the oral evidence of the applicant.
Factual Background
The following relevant factual background appears from the T Documents.
On 5 October 2010 the applicant lodged with Centrelink a completed and signed claim form whereby she claimed FTB.
In that claim form the applicant provided the following relevant information:
·she was claiming FTB in respect of each of two male children, one born in 2006, the other born in 2009;
·her relationship to each of those children is “grandparent”;
·she expected each child to be in her care for at least the next 26 weeks;
·before entering her care, each child was cared for by his parents;
·each child entered her care on 1 January 2010;
·she does not have “legal or other documents to support the change of care”;
·each child also spends time with his parents;
·the current care arrangements in respect of each child started on 1 January 2010 and are “indefinite/ongoing”;
·she does not have “a parenting plan or court order that shows where [each] child stays”;
·the “percentage of care” for each child which she will have during the abovementioned care period is “90%”;
·the “percentage of care” for each child that “the other parent, carer or guardian of [each] child” will have during the abovementioned care period is “10%”;
·she is the grandmother of these children and she lives with her daughter and her [daughter’s] partner. (T3)
Following a request for further information regarding the care arrangements for the two children, the applicant lodged with Centrelink a completed “Details of your child’s care arrangements” form, dated 13 October 2010, in which she provided the following relevant information:
·the current care arrangements in respect of each child started on 1 January 2010 and are “indefinite/ongoing”;
·she does not have “a parenting plan or court order that shows where [each] child stays”;
·the “percentage of care” for each child which she will have for the abovementioned assessment period is “86%”;
·the “percentage of care” for each child that “the other parent, carer or guardian of [each] child” will have during the abovementioned assessment period is “14%”;
·the “total number of nights” for which each child will be with her for the assessment period will be “319”;
·the “total number of nights” for which each child will be with “the other parent, carer or guardian” for the assessment period will be “52”;
·“The children are in their parents care every Sundays. And a big kiss every night” [sic];
·“Te Ata (mother) has covered both expenses for both her children. Both parents have great joy with their children every Sunday. As the primary care giver I take the children to the doctors if need be, and to and from school. I have full responsibility for my grandchildren”. [sic]
The form was signed by the applicant and by Te Ata Brown (the children’s mother). (T5)
In each of the forms referred to in paragraphs 5 and 6 above, the stated address of the applicant and of the children’s parents was the same.
On 1 November 2010 the applicant was granted FTB in respect of each of the two abovementioned children, with effect from 1 January 2010.
On 29 May 2012 the applicant’s FTB was cancelled. By letter dated 29 May 2012 a Centrelink officer advised the applicant as follows:
“ I have tried to contact you several times today but it [sic] was unsuccessful. I am writing to inform you of the outcome of your family tax benefit review for both of your grand children … and … from 1/01/10.
I have made the wrong decision at the time of assessing your claim back in 2010 and granted you the family tax benefit for both grand children from 01/01/10 without taking into consideration that you and the parents of the children live together and that the parents still have legal responsibility.
I have corrected the record and taken the children out of your care from 01/01/10 because you are not entitle [sic] to the payment. I have created debts for you from 01/01/10 and our debt team will be in contact with you shortly.
….” (T24, p 97)
Following a request by the applicant, a Centrelink ARO reviewed the decision to cancel her FTB and, on 17 July 2012, affirmed that decision and decided that the full amount of the overpayment of FTB to the applicant for the period from 1 January 2010 to 18 May 2012 was to be recovered from her as a debt. The total amount of that debt was $25,064.27 made up as follows:
·$6,662.61 for the period from 1 January 2010 to 30 June 2010;
·$10,381.52 for the period from 1 July 2010 to 30 June 2011;
·$7,524.96 for the period from 1 July 2011 to 18 May 2012; and
·$495.18 being the balance outstanding of an FTB advance.
By letter dated 17 July 2012 the ARO notified the applicant of that decision (T31).
By letter dated 26 November 2012 the ARO wrote to the applicant as follows:
“ I am an Authorised Review Officer, an independent senior officer authorised to review decisions made by the Australian Government Department of Human Services. On 17 July 2012 I reviewed the decision to cancel your Family Tax Benefit (FTB) and to raise and recover FTB debts totalling $17,539.31 [sic].
In our conversation on 26 November 2012 I explained the reasons for my decision and the Family Assistance law which applies in your case.
I acknowledged that the Department did not properly investigate your explanation of the care arrangements and your statement that you were the primary care giver and had full responsibility for your grandchildren. I acknowledged that this had partly contributed to you receiving Family Assistance to which you were not entitled.
I explained that I had decided not to alter my decisions and that the decisions to cancel your FTB and recover the debts were correct.
We discussed your right to ask for an independent review by the Social Security Appeals Tribunal. Please see below for further information about how to do this.
…” (T32)
On 7 February 2013 the SSAT affirmed the ARO’s decision.
On 19 March 2013 the applicant applied to this Tribunal for review of the SSAT’s decision.
The Relevant Legislation
The relevant legislation comprises the A New Tax System (Family Assistance) Act 1999 (Cth) (“FA Act”) and the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (“FA (Administration) Act”).
FA Act
Section 21(1) of the FA Act provides that an individual is eligible for FTB if (inter alia) the individual “has at least one FTB child”.
Section 22 of the FA Act relevantly provides:
“22 When an individual is an FTB child of another individual
(1)An individual is an FTB child of another individual (the adult) in any of the cases set out in this section.
Individual aged under 16
(2)An individual is an FTB child of the adult if:
(a)the individual is aged under 16; and
(b)the individual is in the adult’s care; and
(c)the individual is an Australian resident, is a special category visa holder residing in Australia or is living with the adult; and
(d)the circumstances surrounding legal responsibility for the care of the individual are those mentioned in paragraph (5)(a), (b) or (c).
…
Legal responsibility for the individual
(5)The circumstances surrounding legal responsibility for the care of the individual are:
(a)the adult is legally responsible (whether alone or jointly with someone else) for the day‑to‑day care, welfare and development of the individual; or
(b)under a family law order, registered parenting plan or parenting plan in force in relation to the individual, the adult is someone with whom the individual is supposed to live or spend time; or
(c) the individual is not in the care of anyone with the legal responsibility for the day‑to‑day care, welfare and development of the individual.
Percentage of care at least 35%
(7)If an individual’s percentage of care for a child during a care period is at least 35%, the child is taken to be an FTB child of that individual for the purposes of this section on each day in that period, whether or not the child was in that individual’s care on that day.
Note:If an individual’s percentage of care for a child during a care period is less than 35%, the child is taken not to be an FTB child (see section 25).”
FA (Administration) Act
The FA ( Administration) Act relevantly provides:
“71 Debts arising in respect of family assistance other than child care benefit, child care rebate and family tax benefit advance
No entitlement to amount
(1) If:
(a) an amount has been paid to a person by way of family tax benefit, baby bonus, single income family supplement or schoolkids bonus (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.
...”
“ 71A Debts arising in respect of family tax benefit advances
No entitlement to advance
(1) If:
(a) a family tax benefit advance has been paid to an individual; and
(b) the individual was not entitled to the advance;
the amount so paid is a debt due to the Commonwealth by the individual.
...”
“ 95 Secretary may write off debt
(1)The Secretary may, on behalf of the Commonwealth, decide to write off a debt for a stated period or otherwise, but only if subsection (2), (4A) or (4B) applies.
Secretary may write off debt if debt irrecoverable or debt will not be repaid etc.
(2) The Secretary may decide to write off a debt under subsection (1) if:
(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.
…”
“ 97 Waiver of debt arising from error
(1)The Secretary must waive the right to recover the proportion (the administrative error proportion) of a debt that is attributable solely to an administrative error made by the Commonwealth if subsection (2) or (3) applies to that proportion of the debt.
(2)The Secretary must waive the administrative error proportion of a debt if:
(a) the debtor received in good faith the payment or payments that gave rise to the administrative error proportion of the debt; and
(b) the person would suffer severe financial hardship if it were not waived.
(3)The Secretary must waive the administrative error proportion of a debt if:
(a) the payment or payments were made in respect of the debtor’s eligibility for family assistance for a period or event (the eligibility period or event) that occurs in an income year; and
(b) the debt is raised after the end of:
(i)the debtor’s next income year after the one in which the eligibility period or event occurs; or
(ii)the period of 13 weeks starting on the day on which the payment that gave rise to the debt was made;
whichever ends last; and
(c) the debtor received in good faith the payment or payments that gave rise to the administrative error proportion of the debt.
(4)For the purposes of this section, the administrative error proportion of the debt may be 100% of the debt.”
“101 Waiver in special circumstances
The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a)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
(b)there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c)it is more appropriate to waive than to write off the debt or part of the debt.”
The Applicant’s Evidence
The applicant acknowledged that she was not eligible for FTB in the period from 1 January 2010 to 18 May 2012 (“the relevant period”). She explained that, after her FTB was cancelled and the overpayment debt was raised, she queried this with Centrelink and it was explained to her that she was not eligible because she, her daughter and her two grandchildren were all living at the same address throughout that period – an explanation which she “absolutely” accepted.
The applicant confirmed, furthermore, that she did not dispute that the total amount which she was paid by way of FTB during the relevant period was $25,064.27.
The applicant said that her reason for appealing Centrelink’s decision to raise a debt in the amount of $25,064.27 and recover that debt from her is that she regards Centrelink as entirely responsible for wrongly deciding that she was eligible for FTB and paying FTB to her during the relevant period, resulting in that debt.
As regards the claim for FTB which she made in October 2010, the applicant said that:
·a Centrelink officer helped her to fill out the forms and to calculate the percentage of care of the two children which she and their parents would have, and the number of nights for which the children would be with her and with their parents;
·she wrote down those figures in the form in accordance with the Centrelink officer’s calculations;
·she provided that information in the forms in good faith.
The applicant said that she now understands and accepts that those figures were incorrect or misleading but she reiterated that she provided that information in good faith.
The applicant asked why Centrelink did not query the correctness of those figures, given that she had also indicated in the forms that she, her daughter and the two children were living at the same address, but instead simply granted FTB to her in response to her claim.
The applicant referred to the Centrelink officer’s letter of 29 May 2012 to her in which the officer acknowledged that they made “the wrong decision” in granting FTB to her in 2010 (see paragraph 9 above). She also referred to the ARO’s letter of 26 November 2012 to her in which the ARO acknowledged that “the Department did not properly investigate [her] explanation of the care arrangements and [her] statement that [she] was the primary care giver and had full responsibility for [her] grandchildren” (see paragraph 11 above). The applicant said that Centrelink should be held accountable for their mistake.
The applicant also expressed concern that, having wrongly granted FTB to her on 1 November 2010, it was not until May 2012 that Centrelink realised that they had made a mistake and then raised the debt against her.
The applicant said that she does not now live with her daughter and the children. She confirmed that she is currently working full time and added that she is supporting her partner and his son.
Analysis
As previously mentioned, the applicant does not dispute that:
·she was not eligible for FTB in respect of the relevant period;
·the total amount of $25,064.27 was paid to her by way of FTB in respect of the relevant period; and
·she was not entitled to any part of that amount.
Having regard to the evidence before it, the Tribunal is satisfied, and finds, that:
·each of the relevant children remained in the care of his parents throughout the relevant period;
·the applicant was not “legally responsible (whether alone or jointly with someone else) for the day-to-day care, welfare and development of” either of the relevant children in the relevant period, within the meaning of s 22(5)(a) of the FA Act; and
·neither of the circumstances referred to in paras (b) and (c) of s 22(5) of the FA Act existed in the relevant period.
Accordingly, the Tribunal, pursuant to subss 22(2) and 22(5) of the FA Act, finds that neither of the relevant children was an “FTB child” of the applicant in respect of the relevant period. Pursuant to s 21(1) of the FA Act, therefore, the applicant was not eligible for FTB in respect of the relevant period.
The Tribunal also finds that the total amount of $25,064.27 was paid to the applicant by way of FTB (including an FTB advance) in respect of the relevant period and that she was not entitled to any part of that amount.
It follows, pursuant to ss 71(1) and 71A(1) of the FA (Administration) Act, that that amount of $25,064.27 is a debt due to the Commonwealth by the applicant.
The question arises – and the ultimate issue for determination by the Tribunal is – whether that debt should be waived or written off.
Waiver – administrative error
Pursuant to s 97(1) of the FA (Administration) Act, the Tribunal is obliged to waive the right to recover “the proportion … of a debt that is attributable solely to an administrative error made by the Commonwealth” if the circumstances set out in either subs (2) or subs (3) of s 97 exist.
The fundamental requirement which must, therefore, be satisfied before waiver is authorised under s 97(1) is that the relevant proportion of the debt must be “attributable solely to an administrative error made by the Commonwealth”.
In the opinion of the Tribunal, the information which the applicant provided to Centrelink in the FTB forms referred to in paragraphs 5 and 6 above, relating to (in particular) the “percentage of care” for each child which she, and the child’s parent, would have in the relevant period, and the “total number of nights” for which each child would be with her, and with the child’s parent, together with her statement that she had “full responsibility” for the children, contributed to Centrelink’s granting FTB to her in respect of the relevant period. It is common ground that that information was incorrect or at least misleading, and that the decision of Centrelink to grant FTB to the applicant in respect of the relevant period on the basis of that information was erroneous.
The Tribunal accepts that other information provided by the applicant in the abovementioned FTB forms – in particular, information that her address and the address of the children’s parents were the same and that she lived with the children’s parents at that address – was apparently inconsistent with the information referred to in paragraph 35 above and should have led Centrelink to make further enquiries with a view to clarifying the care arrangements for the children and the matter of responsibility for the children, and resolving the apparent inconsistencies. In the Tribunal’s opinion, the omission by Centrelink to make such enquiries also contributed to its erroneously granting FTB to the applicant in respect of the relevant period.
The Tribunal can understand the applicant’s being critical of Centrelink for not querying the apparent inconsistencies in the information which she provided in the abovementioned FTB forms and for failing to make further enquiries in order to resolve such inconsistencies. Indeed, Centrelink officers have, in correspondence sent to the applicant, acknowledged that Centrelink had erred in those respects (see paragraphs 9 and 11 above). However, in the Tribunal’s opinion it is not reasonable of the applicant to seek to lay full responsibility for the erroneous grant of FTB to her with Centrelink and not to accept any responsibility herself for contributing to the making of that erroneous decision. It seems to the Tribunal that the applicant’s criticism of Centrelink for simply granting FTB to her without querying the correctness of the information provided by her implicitly acknowledges that the provision by her of that information to Centrelink did not merely contribute to the making of that erroneous decision but rather caused that decision to be made.
The Tribunal is satisfied, and finds, that the whole of the amount of the debt of $25,064.27 in this case was attributable partly to the abovementioned incorrect or misleading information provided to Centrelink by the applicant, and partly by Centrelink’s erroneous omission to make further enquiries in order to resolve the abovementioned apparent inconsistences in the information provided to it by the applicant.
The Tribunal notes the applicant’s evidence to the effect that the information regarding the percentages of care which she, and the children’s parents, would have was provided by her in accordance with the advice of a Centrelink officer who assisted her to fill out the relevant forms. In the Tribunal’s opinion, however, that Centrelink officer cannot be held responsible for the incorrectness or misleading nature of the information (including the applicant’s statement that she had “full responsibility” for the children) which the applicant ultimately provided in the forms which she herself completed and signed. As regards the advice that may have been given to the applicant by the Centrelink officer, the Tribunal has no reason to doubt that such advice was given in good faith and on the basis of information which the applicant provided to that officer. Likewise, the Tribunal has no reason to doubt that the information which the applicant provided to the Centrelink officer and in the forms which she subsequently lodged with Centrelink was provided by her in good faith.
Accordingly, the Tribunal concludes that no part of the debt in the amount of $25,064.27 due to the Commonwealth by the applicant is “attributable solely to an administrative error made by the Commonwealth”, within the meaning of s 97(1) of the FA (Administration) Act. It follows that no part of that debt can be waived under s 97 of that Act.
Waiver – special circumstances
The applicant’s contention that the relevant debt should be waived was based entirely on her contention that that debt was attributable solely to administrative error by Centrelink. The applicant did not expressly contend that there were any “special circumstances (other than financial hardship alone)” in her case by reason of which that debt should be waived.
Having regard to the evidence before it, the Tribunal is not satisfied that there are any special circumstances in the applicant’s case by reason of which the recovery of the whole of the debt due to the Commonwealth by her would be unjust, unreasonable or otherwise inappropriate. The Tribunal concludes, therefore, that that debt cannot be waived, either wholly or partly, under s 101 of the FA (Administration) Act.
Write off
The applicant did not contend that any of the circumstances referred to in s 95(2) of the FA (Administration) Act applied in her case so as to make it appropriate to write off the debt due to the Commonwealth by her.
Having regard to the evidence before it, the Tribunal is not satisfied that any of the circumstances referred to in s 95(2) of the FA (Administration) Act applies in this case. Accordingly, the debt due to the Commonwealth by the applicant cannot be written off under that subsection.
Conclusion
The Tribunal concludes that the debt in the amount of $25,064.27 due to the Commonwealth by the applicant cannot be waived or written off under any of the relevant provisions of the FA (Administration) Act. That debt is, therefore, recoverable by the Commonwealth from the applicant in accordance with Part 4 of the FA (Administration) Act.
Decision
For the above reasons, the decision under review is affirmed.
I certify that the preceding 46 (forty -six) paragraphs are a true copy of
the reasons for the decision herein of
Deputy President S D Hotop......................[sgd D Brodie]........................................
Administrative Assistant
Dated 22 November 2013
Date of hearing 1 November 2013 Representative of the Applicant In person (unrepresented) Representative of the Respondent Ms S Vahala Solicitor for the Respondent Australian Government Solicitor
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