Tozer and Secretary, Department of Families, Community Services and Indigenous Affairs

[2006] AATA 1110

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 1110

ADMINISTRATIVE APPEALS TRIBUNAL          № V2006/785

GENERAL ADMINISTRATIVE  DIVISION

Re:            JANET GEEN TOZER

Applicant

And:         SECRETARY,

DEPARTMENT OF FAMILIES, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal:       Mr B.H. Pascoe, Senior Member

Date:21 December 2006

Place:Melbourne

Decision:The Tribunal affirms the decision under review.

(sgd) B.H. Pascoe

Senior Member

SOCIAL SECURITY – family tax benefit – shared care arrangement – overpayment – debt due to Commonwealth – waiver – special circumstances – Act of Grace Payment

A New Tax System (Family Assistance) Act 1999

A New Tax System (Family Assistance) (Administration) Act 1999 s 71(2), 101

Financial Management and Accountability Act 1997 s 33

Re Nowicz and Secretary, Department of Family and Community Services and Another [2001] AATA 628

Groth v Secretary, Department of Social Security (1995) 40 ALD 541

Dranichnikov and Another v Centrelink (2003) 75 ALD 134

Ryde v Secretary, Department of Family and Community Services [2005] FCA 8

REASONS FOR DECISION

21 December 2006  Mr B.H. Pascoe, Senior Member

1.      This is an application by Mrs Janet Geen Tozer (the applicant) to review a decision of the Social Security Appeals Tribunal (SSAT) dated 21 July 2006.  The SSAT affirmed a decision of a Centrelink officer made on 5 April 2006 to raise and recover a debt for an overpayment of family tax benefit (FTB) paid to the applicant between 1 July 2003 and 25 January 2006.  Centrelink is the service delivery agent for the Secretary to the Department of Families, Community Services and Indigenous Affairs (the respondent). 

2. At the hearing of this application Mrs Tozer was unrepresented. She was accompanied by her husband, Mr Donald Tozer. The respondent was represented by Ms A. Bramley, a Centrelink advocate. The Tribunal had before it documents filed pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (T1‑T43) as well as various character references filed by the applicant. 

3.      On 1 November 2001 Mr and Mrs Tozer were given full‑time care and responsibility of their two granddaughters, Caitlyn and Lena.  Mrs Tozer lodged a claim for FTB.  Centrelink made payments at the 100 per cent rate from 1 November 2001 on the basis that the children were in the sole care of Mr and Mrs Tozer.  At that time Ms Maree Luke, the children’s mother, was incapable of caring for them.

4.      On 27 October 2005 Ms Luke advised Centrelink that the children were currently in her care for 26 per cent of the time.  On 22 November 2005 Ms Luke lodged a claim for FTB for the then current financial year, 2005/2006.  On the same day Ms Luke also lodged claims for the two previous financial years, 2003/2004 and 2004/2005 on the basis of shared care arrangements.  Mrs Tozer did not dispute that in 2005 the children were in Ms Luke’s care for 26 per cent of the time, or that in the previous two financial years, the children were in Ms Luke’s care for 22 per cent and 20 per cent of the time, respectively.  Consequently, Centrelink calculated that Mrs Tozer had been overpaid FTB as follows:  $1,960.83 for 2003/2004; $1642.50 for 2004/2005; $780.48 for the period between 1 July 2005 and 16 November 2005; and $321.03 for the period between 16 December 2005 and 25 January 2006.  Consequently Centrelink raise debts in those amounts.

5.      Although Mrs Tozer did not dispute the shared care percentages, she did dispute the definition of care as used by Centrelink when assessing FTB claims.  Mrs Tozer explained that she and her husband were assigned full‑time care and financial responsibility of the children from 1 November 2001 (T4).  They paid for the children’s school fees, clothing, entertainment and living expenses.  The children did visit their mother. However, Mrs Tozer said that she gave the children food and money to take with them.  She considered herself fully responsible for the two girls, with their mother having part-time access without making any financial or other contribution.

6.      The relevant legislation is A New Tax System (Family Assistance) Act 1999 (the Family Assistance Act) and A New Tax System (Family Assistance) (Administration) Act 1999 (the Administration Act). Neither of these acts refers to the financial burdens associated with caring for children. In Re Nowicz and Secretary, Department of Family and Community Services and Another [2001] AATA 628 Senior Member Kiosoglous stated (at p318) that …the legislation is clearly not concerned with patterns of expenditure on the children, and is based purely on the time spent in each of the carers' care.  The children did spend time in their mother’s care between 2003 and 2006.  During that period, Mrs Tozer received FTB at the rate of 100 per cent to which she was not entitled.  Therefore, the overpayments (set out in paragraph 4) amount to a debt due to the Commonwealth in accordance with s 71(2) of the Administration Act.

7.      Mrs Tozer then submitted that the debt should be waived on the basis of special circumstances.

8. Section 101 of the Administration Act provides that:

101.  The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:

…

(b)there are special circumstances (other than financial hardship alone) that make it desirable to waive…

9.      In Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at p545 Keifel J stated that special circumstances:

…would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case... it would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.

In Dranichnikov and Another v Centrelink (2003) 75 ALD 134, the Full Court of the Federal Court of Australia considered special circumstances in overpayments of FTB.  Hill J stated that in order to determine whether special circumstances exist, the decision‑maker must look at the circumstances that gave rise to the overpayment.  Hill J further stated (at para 66) 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.

10.     Mrs Tozer submitted that her circumstances were special.  She and her husband came out of retirement and returned to work in order to provide financial support for their granddaughters.  Neither she nor her husband mislead Centrelink and always provided information on request.  Mrs Tozer stated that her circumstances were unfair because of the retrospective nature of Ms Luke’s claim.  When Mrs Tozer lodged her claim she was entitled to FTB and because of Ms Luke’s delays, Mr and Mrs Tozer are now faced with a debt.  Had Ms Luke lodged a claim earlier, Mrs Tozer would have accepted FTB payments on the basis of shared care arrangements and the large debt of over $4,700 would not have accrued.

11.     In its Statement of Facts and Contentions, the respondent submitted that the applicant’s circumstances do not differ from the usual cases.  Other carers often make claims for past periods and financial support is only one factor that is considered when assessing shared care arrangements.  The respondent further submitted that Mrs Tozer was advised in numerous letters to inform Centrelink of any changes to the care arrangements of the children and failed to do so.  However, the respondent did not question Mrs Tozer’s character or credibility. 

12. There was no evidence before the Tribunal of any hardship in Mrs Tozer’s circumstances. While the retrospective nature of Ms Luke’s claim may be unfair, s 7(1)(b) of the Administration Act provides for past period claims. Therefore, this does not amount to special circumstances. Consequently, the Tribunal is not satisfied that Mrs Tozer’s circumstances are such that would justify waiver under s 101 of the Administration Act. Unfortunately, it is currently not so unusual or exceptional for grandparents to be forced to provide overall responsibility for children of a broken marriage with some part-time access and, therefore, shared care of those children.

13. While the Tribunal accepts that the law is clear that FTB claims for past periods of care may be made by third parties, the Tribunal notes that the legislative provisions may have operated to produce unintended and unjust results in this case. It is accepted that Mrs Tozer held a genuine view that, despite the occasional visit to their mother, Mrs Tozer still had the sole care and responsibility of the children. It was not until Ms Luke lodged her claim on 22 November 2005 that Mrs Tozer became aware that the fortnightly visits amounted to care for the purposes of FTB entitlements. The Tribunal notes that in other welfare benefits entitlement can operate prospectively only from the date of the application. Here, the legislation allows a retrospective claim with a resultant large debt of a grandparent who had received the FTB in good faith and in circumstances where they had undertaken a major financial and personal responsibility for their grandchildren. The Tribunal also notes that the retrospective claim by the mother, with the consequent debt for the grandparents, has resulted in significant tensions and personal difficulties within the family. In these circumstances it may be appropriate for the respondent to consider an Act of Grace Payment in accordance with s 33 of the Financial Management and Accountability Act 1997. 

14.     For the forgoing reasons, the Tribunal has no option but to affirm the decision under review.

I certify that the fourteen [14] preceding paragraphs are a true copy of the reasons for the decision herein of

Mr B.H. Pascoe, Senior Member

(sgd)       Olympia Sarrinikolaou

Clerk

Date of Hearing:  11 December 2006

Date of Decision:  21 December 2006
Advocate for the applicant:          Self-represented

Advocate for the respondent:       Ms A. Bramley, Centrelink Legal Services Branch