Tough; Secretary, Department of Family and Community Services
[2002] AATA 1212
•22 November 2002
CATCHWORDS – SOCIAL SECURITY – family tax benefit – child's adjusted taxable income exceeded cut out amount during the year – whether debt due to the Commonwealth – whether entitled to family tax benefit – distinction between entitled and eligible – whether Secretary can review determination initially made entitling applicant to benefit – whether can do so on the basis of an event occurring subsequently to the date of the initial determination – distinction between determinations under s. 31 and decision under s. 105 A New Tax System (Family Assistance) (Administration) Act 1999 – decision set aside.
Social Security Act 1991
A New Tax System (Family Assistance) Act 1999 ss. 3, 21, 22, 22A, 58, 60 to 63 and 85; Schedules 1, 3 and 4
A New Tax System (Family Assistance) (Administration) Act 1999 ss. 5, 7, 7A, 9 to 10, 13, 16, 17, 19, 21, 23, 24, 25, 27, 27A, 28, 28A, 28B, 29, 30, 31, 31A, 31B, 51B, 54B, 70, 71, 104, 105, 107, 225 and 226
Data-matching Program (Assistance and Tax) Act 1990
Offner and Secretary, Department of Family and Community Services [2002] AATA 911
Re Tiknaz and Director-General of Social Services (1981) 4 ALN N44
DECISION AND REASONS FOR DECISION [2002] AATA 1212
ADMINISTRATIVE APPEALS TRIBUNAL )
) V2001/1649
GENERAL ADMINISTRATIVE DIVISION )
ReSECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Applicant
AndMICHELE TOUGH
Respondent
DECISION
Tribunal: Miss S A Forgie (Deputy President)
Date: 22 November, 2002
Place: Melbourne
Decision:The Tribunal
1.set aside the decision of the Social Security Appeals Tribunal dated 20 November, 2001;
2.substitute a decision that the amount of Family Tax Benefit paid to the applicant by the respondent during the period 1 July, 2000 to 11 April, 2001, being an amount of $732.72 is a debt due to the Commonwealth by the applicant; and
3.adjourn consideration of whether the debt should be recovered to a date to be fixed.
S A FORGIE
Deputy President
REASONS FOR DECISION
On 18 December, 2001, the applicant, the Secretary of the Department of Family and Community Services ("Secretary") applied for review of a decision of the Social Security Appeals Tribunal ("SSAT") dated 20 November, 2001. In that decision, the SSAT set aside an earlier decision of a delegate of the Secretary deciding to raise and recover from the respondent, Mrs Michele Tough, a debt of $1,732.72 being family tax benefit ("FTB") paid to her for the period from 1 July, 2000 to 11 April, 2001. In its place, the SSAT substituted a decision that Mrs Tough did not owe a debt to the Secretary. Since then, $1,000 of that debt has been waived leaving a debt of $732.72.
The matter was heard on the papers after both parties had made written submissions and been given the opportunity for an oral hearing. I have had regard not only to their written submissions but also to the documents lodged pursuant to s. 37 of the Administrative Appeals Tribunal Act 1975 ("T documents").
THE ISSUE
The issue in this case is whether Mrs Tough owes a debt to the Commonwealth and whether the amount of that debt is the amount of $1,732.72 paid to her for the period 1 July, 2000 to 11 April, 2001 less the amount already waived. Resolution of that issue requires a consideration of whether Mrs Tough was not entitled to FTB in that period. It also requires a consideration of whether the Secretary may review the determination initially made entitling Mrs Tough to FTB and whether he may do so on the basis of an event occurring subsequent to the date of the initial determination. If Mrs Tough owes a debt, she and the Secretary have agreed that issues relating to waiver should be adjourned for consideration at another time.
BACKGROUND
There was no disagreement between the parties regarding the facts in this case. In light of that and on the basis of the material to which I have referred, I have made the findings of fact that I have set out in the following paragraphs together with an outline of the structure of the relevant legislation and its provisions.
Eligibility for FTB
From 1 July, 2000, Parenting Payment and Family Payment previously paid pursuant to the Social Security Act 1991 ("the SS Act") were replaced by the Family Tax Benefit ("FTB") payable pursuant to the A New Tax System (Family Assistance) Act 1999 ("FA Act"). FTB is one of the payments that together are described in the legislation as "family assistance" (FA Act, s. 3(1)).
Eligibility for FTB
Eligibility for FTB is the subject of s. 21 of the FA Act and it provides:
"(1) An individual is eligible for family tax benefit if:
(a)the individual has at least 1 FTB child (see section 22 and later provisions); and
(b)the individual is an Australian resident; and
(c)the individual's rate of family tax benefit, worked out under Division 1 of Part 4, is greater than nil.
(2)However, the individual is not eligible for family tax benefit if another provision of this Subdivision so provides."
Generally, the question whether an individual is an FTB child is determined according to whether the individual is under the age of 18 years, between the age of 18 and 20 or aged between 21 and 24 years. Different criteria must be met according to the age group into which an individual falls and those criteria are set out in s. 22 of the FA Act. Mrs Tough has two sons: Steven (born on 18 November, 1979) and Brent (born on 24 June, 1982). There is no question in this case that Mrs Tough's sons met the criteria for their relevant age group at the relevant time.
Section 22A of the FA Act qualifies s. 22 for it provides that, despite s. 22, an individual cannot be an FTB child of another in the cases that it proceeds to set out in a table. Only one of those cases is relevant in this case and that is that:
"… an individual cannot be an FTB child of another individual (an adult) …If the individual is aged … 16 or more … [and] … the individual has adjusted taxable income, for the income year in which the particular time occurs, that equals or exceeds the cut-out amount …" (FA Act, s. 22A(1))
The expression "adjusted taxable income" has the meaning given by Schedule 3 of the FA Act (s. 3(1)). In general terms and subject to qualifications that are not relevant in this case, it means the sum of the individual's taxable income for the year, adjusted fringe benefits, target foreign income, net rental property loss and tax free pension or benefit for the relevant year less the amount of the individual's deductible child maintenance expenditure for that year (FA Act, Schedule 3, clause 2).
The amount described as the "cut-out amount" means:
"… the sum of:
(a)the amount specified in column 2 of item 2 of the table in clause 30 of Schedule 1 divided by 0.3; and
(b)the amount specified in clause 33 of that Schedule." (FA Act, s. 22A(2))
Clause 30 of Schedule 1 sets out how, subject to clause 31, an individual's standard rate is worked out. In Mrs Tough's circumstances, the standard rate for each of her son's is $1,781.20. Clause 33 provides that an individual's income free area is $1,616.
Applying these figures to the formula in s. 22A(2), the cut-out amount for each of Mrs Tough's sons is $7,553.33. I note, however, that the Secretary and the SSAT both calculated the cut-out amount to be $7,662.83. They did so on the basis that the appropriate standard rate according to clause 30 of Schedule 1 of the FA Act (as adjusted in accordance with the Consumer Price Index according to s. 85 and Schedule 4) was $1,814.05 and I accept that is the appropriate figure.
Calculation of rate of FTB
Section 58(1) of the FA Act provides that:
"Subject to sections 60 to 63, an individual's annual rate of family tax benefit is to be calculated in accordance with the Rate Calculator in Schedule 1."
Sections 60 to 63 modify the provisions of s. 58(1) in circumstances that are not relevant in this case.
Making a claim for FTB
Section 5 of the A New Tax System (Family Assistance) (Administration) Act 1999 ("FAA Act") provides that "the only way that a person can become entitled to be paid family tax benefit is to make a claim in accordance with … Subdivision [A of Part 3]". An individual or an approved care organisation (described in the legislation as a "claimant") may make claim:
"(a) for payment of family tax benefit by instalment; or
(b)for payment of family tax benefit for a past period; or
(c)in the case only of a claimant who is an individual – for payment of family tax benefit by single payment/in substitution because of the death of another individual." (FAA Act, s. 7)
The manner in which a claim is made is the subject of s. 7(2) of the FAA Act. A claim for FTB by instalment must give details of a bank account in accordance with s. 7A (FAA Act, s. 7(2)(aa)) and a claim for FTB by instalment and a claim for payment of FTB by instalment or for a past period must give a tax file number ("TFN") in accordance with s. 8 (FAA Act, s. 7(2)(b)). Sections 9 and 10 impose certain restrictions on claims for payment of FTB by instalment and for a past period respectively. Those limitations are not relevant in this case.
Determination of claim for FTB
The claimant's claim for payment of FTB must be determined according to Subdivision B of Part 3 of the FAA Act (FAA Act, s. 13). The manner of determination depends upon whether the claim is for a payment of FTB by instalment or for a past period or in substitution because of the death of another. Section 16 applies to the determination of an instalment entitlement claim and provides:
"If the Secretary is satisfied that the claimant is, at the time the Secretary makes the determination on the claim, eligible for family tax benefit in accordance with Subdivision A or C of Division 1 of Part 3 of the Family Assistance Act, the Secretary must determine that he or she is entitled to be paid FTB for each day on which the determination is in force at the daily rate at which the Secretary considers the claimant to be eligible" (FAA Act, s. 16(2)).
Section 17 applies to the determination of a past period claim and s. 17(b) provides that if:
"the Secretary is satisfied that the claimant was eligible for family tax benefit:
(i)for the whole of the period in accordance with Subdivision A or C of Division 1 of Part 3 of the Family Assistance Act; or
(ii)for part of the period in accordance with Subdivision A of that Division and for the remainder of the period in accordance with section 31 of that Act;
the Secretary must determine that the claimant is entitled to be paid family tax benefit for the past period."
If the Secretary is not satisfied of the matters addressed in ss. 16 and 17, he must, if the claim is for payment of FTB by instalment, determine that claimant is not entitled to be paid FTB for each day on which the determination is in force or, if the claim is for payment for a past period, determine that the claimant is not entitled to be paid FTB for that period (ss. 19(a) and (b)).
When is a determination in force?
Section 21(1) provides that, subject to qualifications appearing elsewhere in s. 21, a determination comes into force when it is made and remains in force at all times afterwards. In very broad terms, ss. 21(2) provides that a determination under ss. 16 or 19(a) that a person is not entitled to be paid FTB ceases to be in force if another determination is made on a claim for payment of FTB by instalment or on a claim for payment of FTB for a past period. Section 21(3) provides that a determination ceases to be in force if a claimant advises the Secretary that he or she wishes the determination to cease to be in force.
Payment of FTB
Section 23(1) of the FAA Act, provides that:
"Subject to this section, if the claimant is entitled to be paid family tax benefit by instalment, the Secretary must, after each instalment period ending after the determination is made, pay the instalment amount to the claimant, at such time as the Secretary considers appropriate and to the credit of a bank account nominated and maintained by the claimant."
An "instalment amount" is the "amount accruing for the days in the instalment period for which an entitlement to be paid family tax benefit arose under the determination" (s. 23(2)). An "instalment period" means:
"(a) the period of 14 days beginning on such day as the Secretary considers appropriate in relation to the claimant, or class of claimants in which the claimant is included; and
(b)each successive period of 14 days." (s. 23(2))
Section 23(6) provides that s. 23 is subject to Part 4 and ss. 225 and 226 of the FAA Act. Sections 225 and 226 permit the Commissioner of Taxation to make certain deductions in order to collect amounts that may be or become payable under the FAA Act and to set off family assistance amounts against tax liability. Part 4 is concerned with overpayments and debt recovery.
With respect to a claim for FTB for a past period, the Secretary may pay the amount to the claimant at such time and in such manner as the Secretary considers appropriate (FAA Act, s. 24(1)). Section 24(4) provides that the provisions of s. 24 are subject to those in Part 4 and ss. 225 and s. 226 of the FAA Act.
The claimant's obligations to notify the Secretary
Section 25 of the FAA Act sets out the obligations of a claimant who has become entitled to be paid FTB by instalment. 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 written notice given to the claimant under section 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. …"
Variation of determination
Subdivision C of Part 3 provides for the variation of the Secretary's determination. The Secretary may vary a determination of instalment and past period determinations if the claimant fails to provide a TFN in the circumstances set out in s. 27 of the FAA Act. He may vary a determination where the claimant fails to provide bank account details in the circumstances set out in s. 27A. There may also be a variation of a instalment and past period determinations where the claimant or the claimant's partner have not lodged income tax returns when required to do so (FAA Act, s. 28). Section 28A provides for variation where the estimate of the claimant's amount of adjusted taxable income is not regarded by the Secretary as reasonable. Section 28B provides for variation of a determination that a claimant is entitled to be paid FTB by instalment in respect of an individual, who is an FTB child, if the individual makes a claim for certain payments including a social security pension or a social security benefit (FAA Act, s. 28B). Sections 29 and 30 provide for variation where there is a failure to provide certain information.
Section 31(1) is relevant in this case and it provides that:
"If:
(a)a determination is made under section 16 that a claimant is entitled to be paid family tax benefit by instalment; and
(b)after the determination is made an event occurs; and
(c)when the Secretary becomes aware of the occurrence, the Secretary considers that, if he or she were making the determination immediately after the occurrence, he or she would conclude:
(i)that the claimant was no longer eligible for family tax benefit; or
(ii)that the claimant was still so eligible but that the rate of family tax benefit should be a different rate to the rate previously determined;
the Secretary must, subject to subsection (2):
(d)if subparagraph (c)(i) applies – vary the determination so that the claimant is not entitled to be paid family tax benefit with effect from the date of occurrence; and
(e)if subparagraph (c)(ii) applies – vary the determination so as to establish the different rate with effect from the date of occurrence."
The reference to an "occurrence" does not include the occurrence of any event:
"(a) that causes the claimant to provide a revised estimate of the claimant's adjusted taxable income to the Secretary; or
(b)that causes the Secretary to revise an estimate of the claimant's maintenance income;
unless:
(c)the event also affects the claimant's eligibility for family tax benefit or the rate of family tax benefit payable to the claimant for a reason other than the amount of the claimant's adjusted taxable income or maintenance income;" or
(d)the event is the claimant's becoming, or ceasing to be, a member of a couple." (FAA Act, s. 31(1B)).
Section 31A provides for a determination to be varied to reflect revised estimates of adjusted taxable income where a claimant is paid FTB by instalment and his or her rate of FTB has been worked out on the basis of an estimate of adjusted taxable income. If a new rate of FTB would be payable using the revised estimate, the Secretary must vary the determination to determine the claimant's rate on the basis of the revised estimate. The date of effect of the revised determination is the subject of s. 31A(2):
"A variation of a determination under subsection (1) has effect:
(a)if it results in an increase in the claimant's rate of family tax benefit:
(i)unless subparagraph (ii) applies – from the day on which the revised estimate was provided to the Secretary; or
(ii)if the first day of the income year to which the revised estimate relates occurs after the day identified in subparagraph (i) – from that first day; and
(b)if it results in a decrease (including a decrease to nil) in the claimant's rate of family tax benefit:
(i)unless subparagraph (ii) or (iii) applies – from the day on which the revised estimate was provided to the Secretary; or
(ii)if the first day of the income year to which the revised estimate relates occurs after the day identified in subparagraph (i) and subparagraph (iii) does not apply – from that first day; or
(iii)if the day after the end of the last instalment period before the variation takes place occurs after the days identified in subparagraphs (i) and (ii) – from the day first-mentioned in this subparagraph."
A variation for a period under s. 31A does not take precedence over variations made pursuant to ss. 27 to 30 (s. 31A(3)).
Section 31B of the FAA Act provides for a variation of a determination where a claimant's rate of FTB has been worked out on the basis of an estimate of the claimant's maintenance income in a particular income year and the claimant is entitled to be paid by instalment. If the Secretary makes a revised estimate of the claimant's maintenance income and that revision is attributable to the occurrence of an event other than an event to which ss. 31(1B)(c) or (d) applies (see paragraph 22 above), the Secretary must vary the determination if a new rate of FTB would be required. The date on which the variation of determination has effect must not be earlier than either:
"(a) the day after the end of the last instalment period before the variation takes place;
(b)the first day of the income year to which the revised estimate relates." (FAA Act, s. 31B(2))
The provisions of s. 31B(3) reflect those of s. 31A(3).
The Secretary's review of decisions
Section 104 of the FAA Act sets out the decisions that the Secretary may review on his own initiative. Those decisions are all the decisions of any officer under the family assistance law except for certain determinations under ss. 51B and 54B. Determinations in relation to FTB are not excluded. Section 105 provides that a decision coming within s. 104 may be reviewed by the Secretary if "the Secretary is satisfied that there is sufficient reason to review the decision" (FAA Act, s. 105(1)(b)). There are qualifications to the circumstances in which the Secretary may conduct that review but those qualifications are not applicable in this case (FAA Act, ss. 105(3)). After reviewing the decision, the Secretary may decide to affirm the original decision, vary it or set it aside and substitute a new decision. He may also deem certain events to have occurred in certain circumstances but they are not relevant in this case (FAA Act, s. 105(5)). The date of effect of a decision made under s. 105 is the subject of s. 107 but none of its provisions is relevant in the context of this case.
Overpayments and debt recovery
If an amount has been paid by way of family assistance, which includes FTB, the amount is a debt due to the Commonwealth only to the extent that a provision of the FAA Act or the Data-matching Program (Assistance and Tax) Act 1990 expressly provides that it is (FAA Act, s. 70). Section 71 applies to family assistance other than child care benefit and family tax benefit advance and so applies to FTB. It provides:
"No entitlement to amount – debt generally owed by person
(1)Subject to subsection (2), if:
(a)an amount has been paid to a person by way of family tax benefit, maternity allowance 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."
In the circumstances of this case, I find that Steven's income exceeded $7,663 on or about 16 January, 2001. Mrs Tough advised Centrelink of that occurrence on or about that date. Brent's income exceeded $7,663 on or about 18 April, 2001 and Mrs Tough advised Centrelink of that on or about that date.
The delegate's decision
The only record of the delegate's decision appears in a screen dump made on 31 August, 2001. It records that a notice was issued to Mrs Tough on 22 May, 2001 and included a statement that:
"As Brent's income for 2000/2001 financial year has exceeded the dependant child income limit of $7663, you were not entitled to payment of Family Tax Benefit from 01/07/2000." (T documents, page 19)
The "debt start date" was shown as 1 July, 2000 and the "debt end date" was shown as 11 April, 2001.
THE SUBMISSIONS
In its decision, the SSAT took the view that Mrs Tough was not entitled to any FTB once each child exceeded the limit. As Mrs Tough notified Centrelink as soon as each of her son's income exceeded the limit and as the benefit was cancelled immediately, she did not incur a debt. This is a position supported by the submissions made on behalf of Mrs Tough. The essence of the submissions initially made on behalf of the Secretary is that FTB is a benefit paid annually and that the whole payment must be reviewed once the child's income exceeds $7,663. As each child's income exceeded that amount, Mrs Tough was not entitled to any FTB for the whole of the financial year in respect of that child. In its subsequent submission, the Secretary pointed to his powers under s. 105 of the FAA Act and said that the decision was made under that section rather than under s. 31.
CONSIDERATION
As Mr Kenny said in Offner and Secretary, Department of Family and Community Services [2002] AATA 911 (11 October, 2002):
"Family tax benefit payments may only be made to the applicant in the event that she has an FBT (sic) child. That is provided for in section 21 of the Act and, although the circumstances of the applicant and Andrew met the requirements of sub-section 22(2) of that Act, that provision must be read with the circumstances of exception listed in sub-section 22A(1) of the Act. …" (paragraph 20)
Section 21 determines eligibility for FTB and regard must be had to the provisions of s. 22A as well as to other provisions to which I have made brief reference (see paragraphs 6-10 above) in determining that eligibility. I also agree with Mr Kenny that s. 22A(1) precludes an individual:
"… from being an FTB child if his adjusted taxable income for the 2000/2001 income year equalled or exceeded the cut-out amount as calculated in accordance with sub-section 22A(2) of the Act. …" (paragraph 20)
Mr Kenny was considering a case very similar to Mrs Tough's case. Just as happened with Mrs Tough, Ms Offner's son's adjusted taxable income for the 2000/2001 income year exceeded the cut-out amount that had been calculated to be $7,663. It did so during the course of the year. Mr Kenny concluded that Ms Offner's:
"… circumstances are embraced by the terms of sub-section 71(1) of the Administration Act in that the amount of the family tax benefit paid to her during that year were amounts to which she was not entitled. Pursuant to that provision, the amount is a debt due by her to the Commonwealth." (paragraph 20)
Although I agree with Mr Kenny's ultimate conclusion that there is a debt, I express the manner in which I reach that conclusion a little differently.
Having regard to the provisions of the FA Act and the FAA Act that I have set out, there seem to be two categories of decision that may be made to alter a determination. One is to vary the determination under Subdivision C of Part 3 of the FAA Act. The other is to review the decision in the circumstances set out in Division 1 of Part 5 into which s. 105 of the FAA Act falls. I will have regard to both avenues but will begin first with a brief consideration of s. 70 of the FAA Act. It provides, in the context of this case, that an amount is a debt due to the Commonwealth "…only to the extent which … this Act … expressly provides that it is" (emphasis added). Reading that section with s. 71 of the same Act, a claimant does not owe a debt to the Commonwealth in respect of a period unless there is a provision of the FAA Act expressly providing that the person was not entitled to FTB in respect of that period.
It seems to me that it does not follow from a conclusion that a person is ineligible for FTB that he or she is not entitled to FTB for the whole of the year. The FAA Act uses both the words "entitle" and "eligible", or derivatives of them, and appears to do so in distinct circumstances. So, for example, s. 71(1) of the FAA Act speaks in terms of lack of entitlement. It provides that an amount paid to a claimant in respect of a period is a debt due to the Commonwealth if the claimant was not entitled to the FTB in respect of that period. Section 21 of the FA Act is couched in terms of eligibility. It sets out the criteria that an individual must fulfil in order to be eligible for FTB. A section such as s. 16 of the FAA Act is couched in terms of both eligibility and entitlement. If the claimant is eligible on the day that the Secretary makes a determination on the claim, the Secretary must determine that the claimant is entitled to be paid FTB. Section 25 is also couched in terms of eligibility and entitlement. If, after a claimant has become entitled to be paid FTB, anything happens, or is likely to happen, causing him or her to cease to be eligible for FTB on the days for which he or she will become entitled or to become eligible for a lower amount, the claimant must notify the Secretary of that. These are but a few examples of the occasions in which the words "entitle" and "eligible", or derivatives of them, are used in the FA Act or the FAA Act.
The choice of two words rather than one suggests that each was intended to convey a different meaning. Indeed, given their ordinary meanings, the two words are not synonymous. Taking first "eligible", it means, in so far as its ordinary meanings are relevant in this context:
"… 1 Fit or entitled to be chosen for a position, award, etc …" (The New Shorter Oxford English Dictionary, 3rd edition, 1993)
"… 1. fit or proper to be chosen; worthy of choice; desirable …" (The Macquarie Dictionary, 2nd edition, 1991)
Those for "entitle" are:
"… Now (chiefly of circumstances, qualities, etc.), confer on (a person or thing) a rightful claim to something or a right to do. …" (The New Shorter Oxford English Dictionary, 3rd edition, 1993)
"… 1. to give (a person or thing) a title, right, or claim to something; furnish with grounds for laying claim. …" (The Macquarie Dictionary, 2nd edition, 1991)
Having regard to the structure of the FA Act or the FAA Act, the ordinary meanings of the words "entitle" and "eligible" would seem appropriate. The summary of the legislation in the previous section of these reasons shows that the FA Act and the FAA Act deal separately and distinctly with each step that must be taken in determining whether an individual is entitled to be paid FTB. First, the criteria that determine whether or not a person is an appropriate person to receive FTB (i.e. eligible for FTB) are set out. That does not mean that FTB will be conferred upon him or her i.e. that he or she will be entitled to FTB. An entitlement will only arise if he or she makes a claim and complies with the requirements as to the manner in which claims must be made and provides the information that is required. If the claimant is eligible, the Secretary must determine that he or she is entitled. That determination remains in force until another determination is made on a claim for an instalment or for a past period or until the individual advises the Secretary that he or she wishes it to cease to be in force. If the claimant is entitled to be paid by instalment, the Secretary must pay the instalment amount after the end of each instalment period.
That brings me back to the two ways in which a determination can be altered and first to s. 31. I have set s. 31 out in full above (see paragraph 22 above). It applies where a person is entitled to be paid FTB by instalment under a determination made under s. 16 and there then occurs an event which, if the Secretary were then making a determination, would cause him to conclude that the claimant was no longer eligible for FTB. The date of effect of the determination is the date of the occurrence.
In Mrs Tough's case, a determination had been made under s. 16 that she was entitled to be paid by instalment. If s. 31 applies, the event must have occurred after the date of that determination. The only event that could be said to have occurred after that date and that would lead the Secretary to conclude that Mrs Tough was no longer eligible for FTB has been that her sons' adjusted taxable income exceeded the cut-out amount. Each ceased to be an FTB child as a consequence although at different times of the financial year. If that is the case, the Secretary must vary the determination so that Mrs Tough was not entitled to be paid FTB. As the date of effect of the varied determination is the date of the event and as the event must have occurred after the varied determination was made, the date of effect must have been the date on which their adjusted taxable income exceeded $7,633. It is not the date of the beginning of the financial year for at that time, Mrs Tough's sons adjustable taxable income had not exceeded the cut-out amount.
This interpretation of s. 31 is consistent with s. 25 of the FAA Act. Section 25 requires a claimant to notify the Secretary of anything that causes him or her to cease to be eligible for FTB on the days on which the claimant "… will become entitled to be paid the benefit under the determination concerned …". It does not refer to past eligibility but to future eligibility after the "anything happens". That is consistent with the "event that occurs" in s. 31 after the determination is made.
If the Secretary's decision has been made under s. 31 and if no other provision of the FAA Act were relevant in this case, it would follow that Mrs Tough's entitlement to FTB could not cease until her sons' adjusted taxable income reached the cut-out amount of $7,633. Only amounts paid after those dates would be amounts to which Mrs Tough would not be entitled and which would be a debt due to the Commonwealth.
There is, however, the second avenue by which the Secretary may alter the decision and that is through a review of the earlier decision. The Secretary may do so pursuant to s. 105. The delegate's decision of 22 May, 2001 (see paragraph 28 above) does not refer to s. 105 and nor does it refer to s. 31. Despite that, I consider that it is a decision made under s. 105. It has three features: first, it states that Brent's income level exceeded the "child income limit"; second, it purports to deal with Mrs Tough's entitlement for the whole of the year; and third, it raises a debt for the whole of that period. A decision with those features is not consistent with a decision under s. 31 for a decision under s. 31 could only have affected the payment of FTB from the date of Brent's income exceeding the cut-out amount. It could not have affected the amount of FTB paid to Mrs Tough prior to that date. A decision under s. 105, however, could have that effect for it may be substituted for the original decision and so affect FTB paid after the date of effect of the original decision i.e. 1 July, 2001.
In using his power under s. 105 to review a determination that Mrs Tough was entitled to FTB, it is proper for the Secretary to consider her eligibility and to do so in light of facts that had happened up to the date of his decision if those facts affected her eligibility on or after 1 July, 2001. This approach is consistent with the general principles adopted in relation to review by the Tribunal as set out in, for example, Re Tiknaz and Director-General of Social Services (1981) 4 ALN N44 (Davies J, President, Mr Ballard and Dr Garlick, Members) and there is nothing in the FA Act or the FAA Act that suggests that the review is limited to facts that have occurred by a certain time. It is also consistent with the provisions of the FA Act and the FAA Act in so far as they permit a person to apply for FTB for a past period. The eligibility, and so entitlement, of such a person would also be determined by reference to the known income of the person applying for FTB and of his or her child.
In the context of eligibility for FTB, one of the facts that may affect her eligibility is the income of Mrs Tough's children and, in particular, of Brent. That is so because the effect of s. 22A of the FA Act is that Brent cannot be Mrs Tough's FTB child at "a particular time" if his adjusted taxable income for "the income year in which the particular time occurs" exceeds the cut-out amount. When regard is had to the income that Brent earned in the year ending 30 June, 2001, his income exceeded that amount. That means that, at no particular time in that year, could he be an FTB child of Mrs Tough. As Brent could not be an FTB child at any time during the financial year, Mrs Tough was not entitled to FTB for any period during the financial year for a determination that she is entitled to FTB could only be made under s. 16 of the FAA Act if she was entitled to it. Consequently, she was not entitled to be paid FTB from 1 July, 2000 to 11 April, 2001 and the amount she was paid is a debt due to the Commonwealth.
For the reasons I have given, I:
1.set aside the decision of the Social Security Appeals Tribunal dated 20 November, 2001;
2.substitute a decision that the amount of Family Tax Benefit paid to the applicant by the respondent during the period 1 July, 2000 to 11 April, 2001, being an amount of $732.72 is a debt due to the Commonwealth by the applicant; and
3.adjourn consideration of whether the debt should be recovered to a date to be fixed.
I certify that the forty-three preceding paragraphs are a true copy of the reasons for the decision herein of
Miss S A Forgie (Deputy President)Signed: ...............................................................
P. Paczkowski AssociateDate of Hearing On the papers
Date of Decision 22 November, 2002
For the Applicant Ms R. Bradley, departmental advocate
Solicitor for the Respondent Mr L. Jaffit, Victoria Legal Aid
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