Tripp and Secretary, Department of Social Services
[2013] AATA 770
•30 October 2013
[2013] AATA 770
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2012/4338
Re
Genevieve Tripp
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Deputy President RP Handley
Date 30 October 2013 Place Sydney The decision under review is set aside and the matter is remitted to the Respondent for reconsideration in accordance with the following directions:
(1) Mrs Tripp was an ‘Australian resident’ from 1 January 2006 to 31 July 2006 and was therefore qualified for Family Tax Benefit in respect of her children during this period. She was no longer an Australian resident from 1 August 2006 until she resumed Australian residence in January 2011. This means that the overpayment of Family Tax Benefit received by Mrs Tripp must be recalculated and will be less than that previously calculated by the Respondent.
(2) As a result of being an Australian resident for the period 1 January 2006 to 31 July 2006, Mrs Tripp was qualified to receive a Maternity Payment in respect of her youngest child who was born in February 2006.
(3) The recalculated overpayment of Family Tax Benefit received by Mrs Tripp is a debt due to the Commonwealth. If there is an outstanding amount of the debt that has not yet been recovered, that outstanding amount can continue to be recovered by withholdings, subject to this being within Mrs Tripp’s means.
...........................[SGD]......................................
Deputy President RP Handley
CATCHWORDS
SOCIAL SECURITY – debt – Maternity Payment and Family Tax Benefit - whether the applicant was an Australian resident during the relevant period – whether the applicant was eligible to receive Family Tax Benefit – whether the applicant was eligible to receive a Maternity Payment – whether the Family Tax Benefit received by the applicant was an overpayment and a debt due to the Commonwealth – whether the debt should be written-off or waived – decision set aside and remitted
LEGISLATION
A New Tax System (Family Assistance) Act 1999 ss 21, 36, 63
A New Tax System (Family Assistance) (Administration) Act 1999 ss 95, 97, 101
Social Security Act 1991 s 7
CASES
Angelakos v Secretary, Department of Employment and Workplace Relations (2007) 100 ALD 9
Beadle and Director-General of Social Security [1984] AATA 176
Beadle v Director-General of Social Security (1985) 7 ALD 670
Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435
Groth v Secretary, Department of Social Security [1995] FCA 1708
Hafza v Director-General of Social Security (1998) 6 FCR 444
Secretary, Department of Families and Community Services and Indigenous Affairs v Baccon [2006] FCA 773REASONS FOR DECISION
Deputy President RP Handley
Date: 30 October 2013
Mrs Tripp (the Applicant) has applied for a review of a decision of the Social Security Appeals Tribunal (SSAT) affirming a decision of an Authorised Review Officer (ARO) to raise and recover a Maternity Payment debt and Family Tax Benefit debts.
BACKGROUND
Mrs Tripp was born in Fiji and is a Fijian citizen. She was granted permanent residency in Australia in 1990. Her husband, Patrick Tripp, was also born in Fiji and granted permanent residency at the same time as Mrs Tripp, and is now an Australian citizen. Mr Tripp has two brothers living in Sydney and three brothers living in Brisbane. Mrs Tripp has a brother and sister living in New Zealand and a sister in Fiji where her parents live. Mr and Mrs Tripp have five children, aged 23, 20, 16, 9 and 7. All the children except the oldest child are Australian citizens. Mr and Mrs Tripp both previously worked for Air Pacific Airlines as flight attendants. Mr Tripp resigned to take up a position in Sydney with Railcorp as a Transit Officer commencing on 25 September 2005. On arrival, he stayed with his brother in Sydney. Mrs Tripp and three of her then four children arrived in Sydney on 1 January 2006 and her oldest child arrived two days earlier on 30 December 2005. At that time, the family intended to settle permanently in Australia.
Mr and Mrs Tripp still own a property in Fiji, and have lived in rental accommodation in Sydney since January 2006 (a two bedroom flat and, since July 2013, a three bedroom flat). In the past, they tried to sell their property in Fiji but this was unsuccessful because the property is in a flood zone and because of the poor economic situation there.
As a result of being unable to make satisfactory arrangements for schools for their three oldest children at short notice in January 2006, Mr and Mrs Tripp decided that the three oldest children should return to Fiji to complete that year’s schooling in Fiji. Mrs Tripp gave birth to her fifth child in February 2006 in Sydney. At that time, her fourth child was only 18 months old. Initially, the new baby suffered from colic and Mrs Tripp therefore asked her mother to come from Fiji to help her with the two youngest children. When her mother had to return to Fiji in March 2006, Mrs Tripp decided to return there too with the two youngest children so that she could arrange to get help for them and so that she could also support the three older children. Mr Tripp was doing shift work at the time and unable to give his wife the level of assistance she needed. He remained in Sydney.
In about August 2006, Mr and Mrs Tripp reviewed the situation and, having further investigated schooling in Sydney for their three older children, decided to keep the children in school in Fiji as a more affordable and prudent option. They agreed to review the situation yearly but hoped to return to Sydney in 2009. Ultimately, for reasons associated with the children’s education, and despite visits to Australia, Mrs Tripp and her four younger children did not return to Sydney permanently until January 2011. The oldest child remained in Fiji to build up flying hours as a commercial pilot and returned to Australia later. Mr Tripp has continued to live in Australia throughout this time.
Mrs Tripp’s claims history with Centrelink is as follows. In October 2005, Mrs Tripp travelled to Sydney to inspect potential rental properties identified by her husband. During the course of this visit, she and Mr Tripp went to the Centrelink office at Leichardt to enquire about their entitlements and were given some forms to complete for when Mrs Tripp and the children settled in Sydney.
On 19 January 2006, Mr and Mrs Tripp returned to the Centrelink office at Leichardt and lodged a claim for Maternity Payment and Family Tax Benefit (FTB) for the 2005/2006 financial year. In answer to a question on the claim form, “When did you start living in Australia?”, the date 20 September 2005 had been inserted. Mr and Mrs Tripp deny having inserted this date, which is not in their handwriting. Mr Tripp said he left the answer to this question blank and that someone at Centrelink must have inserted that date. Centrelink accepted this claim and, on 1 February 2006, Mrs Tripp received arrears of FTB backdated to 20 September 2005 and commenced receiving fortnightly payment of FTB. She received FTB payments until 6 June 2007, after which FTB payments were cancelled. This included a payment of $12,245.79 on 23 November 2006 in respect of arrears of FTB. On 9 March 2006, Mrs Tripp received a Maternity Payment of $3,119.00 for her recently born (fifth) child.
In May 2007, it appears as a result of a data matching exercise, Centrelink undertook a review of Mrs Tripp’s FTB payments and, as a result, determined that she and her children had been absent from Australia during the relevant payment periods.
On 19 June 2007, Centrelink contacted Mrs Tripp and advised her she had two FTB debts of $4,067.32 for the period 20 September 2005 to 20 April 2006 and of $3,174.07 for the period 10 December 2006 to 6 June 2007. A reconsideration decision on 13 July 2007 confirmed the debt was owed. An Authorised Review Officer (‘ARO’) further affirmed the decision to raise the debts on 3 September 2007, as the children had been absent from Australia for over 13 weeks. The ARO acknowledged Centrelink error had contributed to the debts being accrued, but found that the error was not the sole reason.
On 10 December 2007, Mrs Tripp appealed to the SSAT for review of the ARO’s decision. The SSAT affirmed the affirmed the ARO’s decision as Mrs Tripp and her children were not residing in Australia during the relevant period and two family tax benefit amounts of $4,067.32 for the year 2005/2006 and $3,174.07 for the year 2006/7 were incorrectly paid.
As a result, it appears, of Centrelink failing to properly assimilate the information it held concerning Mrs Tripp’s travel in and out of Australia, it was not until January 2012, following a further review, that Centrelink determined Mrs Tripp owed the following debts, totalling $21,811.90:
(a)A maternity payment debt of $3,119.00 for the youngest child arising from the payment on 9 March 2006;
(b)An increased family tax benefit debt of $13,202.85 for the period 20 September 2005 to 30 June 2006;
(c)An increased family tax benefit debt of $5,490.05 for the period 1 July 2006 to 10 January 2007.
An ARO conducted a review of these debts on 24 May 2012, affirming the decision. On 19 June 2012, Mrs Trip lodged an application for review with the SSAT, who affirmed the decision on 17 August 2012. She lodged an application for review with the Administrative Appeals Tribunal (AAT) on 28 September 2012.
The first issue raised by these events is whether Mrs Trip was qualified for FTB payments and a Maternity Payment. This depends on whether she was an ‘Australian resident’ at the relevant time. If she was not qualified for these payments and therefore received payments to which she was not entitled, the second issue is whether the debt to the Commonwealth was correctly raised and, if she owes such a debt, the third issue is whether the debt should be recovered.
THE AUSTRALIAN RESIDENCE REQUIREMENT FOR FTB AND MATERNITY PAYMENT
In order to qualify for FTB payments and a Maternity Payment, a person must satisfy the residency requirements set out in the A New Tax System (Family Assistance) Act 1999 (‘the Family Assistance Act’). At the relevant time, 21(1) stated:
(1) An individual is eligible for family tax benefit if:
(a) the individual:
(i) has at least one FTB child; or
(ii) is not an absent overseas recipient and has at least one regular care child who is also a rent assistance child; and
(b) the individual:
(i) is an Australian resident; or
(ia) is a special category visa holder residing in Australia; or
(ii) satisfies subsection (1A); and
(c) the individual’s rate of family tax benefit, worked out under Division 1 of Part 4 but disregarding reductions (if any) under clause 5 or 25A of Schedule 1, is greater than nil.
Pursuant to s 36 of the Family Assistance Act, the residency requirements set out in s 21(1) also applied to Maternity Payments because qualification for Maternity Payment was contingent on a parent being eligible for FTB.
The relevant question with regard to whether Mrs Tripp was qualified for FTB and Maternity Payment is whether she was an Australian resident during the relevant periods. The meaning of the words ‘Australian resident’ is that set out in s 7(2) of the Social Security Act 1991 and with reference to s 7(3):
(2) An Australian resident is a person who:
(a)resides in Australia; and
(b)is one of the following:
(i)an Australian citizen;
(ii)the holder of a permanent visa;
(iii)a special category visa holder who is a protected SCV holder.
(3)In deciding for the purposes of this Act whether or not a person is residing in Australia, regard must be had to:
(a)the nature of the accommodation used by the person in Australia; and
(b)the nature and extent of the family relationships the person has in Australia; and
(c)the nature and extent of the person’s employment, business or financial ties with Australia; and
(d)the nature and extent of the person’s assets located in Australia; and
(e)the frequency and duration of the person’s travel outside Australia; and
(f)any other matter relevant to determining whether the person intends to remain permanently in Australia.
In the Federal Court decision in Hafza v Director-General of Social Security (1998) 6 FCR 444, Wilcox J stated at [13]-[14]:
… As a general concept residence includes two elements: physical presence in a particular place and the intention to treat that place as home; at least for the time being, not necessarily forever. The concept was explained in a taxation case, Koitaki Para Rubber Estates Limited v The FC of T (1941) 64 CLR 241 at 249, by Williams J.: "The place of residence of an individual is determined, not by the situation of some
business or property which he is carrying on or owns, but by reference to where he eats and sleeps and has his settled or usual abode. If he maintains a home or homes he resides in the locality or localities where it or they are situate, but he may also reside where he habitually lives even if this is in hotels or on a yacht or some other abode."
Physical presence and intention will coincide for most of the time. But few people are always at home. Once a person has established a home in a particular place -- even involuntarily (see Inland Revenue v Lysaght [1928] AC 234 at 248 and Keil v Keil [1947] VLR 383) a person does not necessarily cease to be resident there because he or she is physically absent. The test is whether the person has retained a continuity of association with the place (Levene v Inland Revenue Commissioners[1928] AC 217 at 225 and Judd v. Judd (1957) 75 WN (NSW) 147 at 149) together with an intention to return to that place and an attitude that that place remains "home" –(see Norman v Norman (1969) 16 F.L.R. 231 at 236) …
In the Federal Court decision in Secretary, Department of Families and Community Services and Indigenous Affairs v Baccon (Baccon), Branson J, in discussing the meaning of residence in the context of the Social Security Act 1991, stated at [7]-[10]:
Residence, like domicile, is a factor that connects a person with a place. It is not a term of art; the precise meaning of expressions such as ‘resident’, ‘resides in’ and ‘is residing in’ in legislation will depend upon the context provided by, and the purpose of, that legislation.
As a general concept, residence has two elements: a physical presence in a particular place and the intention to treat that place as home (Hafza v Director-General of Social Security (1985) 6 FCR 444 at 449; Taslim v Secretary, Department of Family and Community Services (2004) 138 FCR 70 at [36]).
Of course, once a person has established a home in a place, temporary absence from that place (for example, to take a holiday) does not bring the residence to an end. However, a person’s residence in a place in which he or she is not present, depends on an intention to return and continue to treat that place as home (Hafza at 449-450).
Again, as a general concept, although most people reside in only one place, residence need not be exclusive; a person may reside in more than one place (Re Taylor; Ex parte Natwest Australia Bank Limited (1992) 37 FCR 194 at 198). For example, an individual who maintains two homes (say, one in Melbourne and one on the Gold Coast) and moves between them according to the seasons may be a resident of both places.
The factors set out in s 7(3) must also be considered. The Respondent drew attention, in particular, to s 7(3)(e) noting the extensive time Mrs Tripp spent outside Australia during the relevant period. In Baccon, at [34], Branson J commented:
… The legislative requirement for a decision-maker to have regard to a person’s travel outside Australia reflects an assumption that an Australian resident will ordinarily be based in Australia.
THE FACTUAL BACKGROUND
Mr Tripp said he came to Australia in September 2005 with a view to preparing the way for his family to move here permanently after spending Christmas 2005 with Mrs Tripp’s parents in Fiji. Initially, he stayed with his brother in Petersham while undertaking three months training for a position as a Transit Officer with Railcorp. He had previously worked for Air Pacific Airlines for 19 years, which entitled him to rebated travel on that airline.
While awaiting the arrival of his family in Sydney, Mr Tripp looked for a suitable property for them to rent. They had put their property in Fiji on the market in June 2005 but it had not sold. Mr Tripp found a property to rent in Petersham but Mrs Tripp wanted to inspect it before he committed to it. Mrs Tripp flew to Sydney on 26 October 2005 and, at the same time, was able to air freight many of their belongings including household items to Sydney. Mrs Tripp thought the proposed rental property her husband had found unsuitable, but was able to inspect a few others in the Ashfield area. On 28 October 2005, Mr and Mrs Tripp went to the Centrelink office at Leichardt where they asked for advice from a case officer called ‘Dave’ about assistance available for families. Dave gave them some forms to complete and return when they were all settled in Sydney early in the New Year.
The first to arrive in Australia after Christmas 2005 was Mr and Mrs Tripp’s eldest daughter who flew to Brisbane for a reunion with the classmates with whom she had been at school when she completed Year 9 at Corinda High School in Brisbane in 2003. Mrs Tripp arrived in Sydney with the then three other children on 1 January 2006 and the eldest daughter travelled from Brisbane to join the rest of the family. Mr and Mrs Tripp said it was their intention at that time to settle permanently in Sydney.
However, it quickly became apparent that satisfactory arrangements could not be made for schooling for the two oldest children as such short notice. Mr and Mrs Tripp found the education system was different in Australia from that in Fiji and realised that arrangements for placing their children in Catholic Schools, which was their choice, needed to be done up to a year in advance, especially with the older children if they were to be able to enrol in the subjects they wanted to study. As a result of the short notice, the two oldest children were unable to enrol in their subjects of choice. Sorting this out took about two weeks and Mr and Mrs Trip decided that the best option was for the two oldest children to return to school in Fiji until other arrangements could be made. Their third child, Mr and Mrs Tripp’s son, insisted that he return to school in Fiji with his two sisters. The three children returned to Fiji on 20 January 2006.
Mrs Tripp said that bearing in mind the advice that Dave from Centrelink’s Leichardt office had given them in October 2005, she and her husband went back to the Leichardt office on 19 January 2006, spoke with Dave again and gave him the forms he had given them in October duly completed to the best of their ability. Mrs Tripp said it was her intention at that time to stay permanently in Australia with her husband. They went through the forms with Dave and left answers to some questions left blank, including the answer to question 3, “When did you start living in Australia?”, and not including information about their absences from Australia in the last three years requested in question 4 because Mr and Mrs Tripp had been coming in and going out of Australia on a regular basis over this period as a result of their work as Flight Attendants for Air Pacific Airlines. They also advised Dave that they were sending the three older children back to Fiji for another year. The visit to the Leichardt office was deliberately made before the children were to leave, and despite there being no firm bookings with rebated travel, the children were able to fly to Fiji on the next day – 20 January 2006. In answer to a question from Dave about whether the three children would be out of Australia for three years, Mr and Mrs Tripp replied ‘No’ because the children would be returning to Australia for the school holidays. Dave told them that an assessment would be made on the basis of the information provided and they would be notified of the outcome in due course.
Mr Tripp drew attention to the date inserted in answer to question 3 - 20 September 2005 – which was not in either his or his wife’s handwriting and which he suggested had probably been inserted by Dave because the handwriting is the same as that for the reference number inserted by, it would appear, a Centrelink officer on front cover of the claim form.
Mrs Tripp gave birth to her fifth and youngest child in Sydney in mid-February 2006. She said she was given a claim form for Maternity Payment and FTB at the hospital, she completed this, and her husband lodged the form on 23 February 2006. Mrs Tripp said that at that time, it was still her intention to remain in Australia permanently with her husband and the two youngest children. However, within a week of settling in back at home, Mrs Tripp began experiencing problems with caring for the children. The baby developed colic and the other child (then 18 months old) began suffering flu-like symptoms. Mr Tripp was doing shift work and could be of little assistance. Mrs Tripp therefore asked her mother to come from Fiji to help her and they paid her fare for this purpose.
Mrs Tripp said her mother stayed as long as she could but ultimately needed to return to Fiji in part to care for the three older children. Mrs Tripp said her mother’s pending departure affected her emotionally and, at her mother’s suggestion, Mr and Mrs Tripp discussed the possibility of Mrs Tripp returning to Fiji for the rest of the year with the two younger children with a view to returning to Australia with all the children in December once arrangements had been made for schooling for the three older children. At that stage, they would be able to get the second youngest child into a day care centre in Sydney. Mr and Mrs Tripp decided on this course, it would appear, in early March, and they agreed that Mrs Tripp should take their house off the market on her return to Fiji. It was agreed that during the year, she would travel to Australia with the children during the school holidays.
Mrs Tripp said she informed Centrelink about her intention to take the two youngest children with her to Fiji and she was told to keep Centrelink informed of all arrivals in and departures from Australia. On 23 March 2006, Centrelink’s Family Assistance Office wrote to Mrs Tripp acknowledging that Mrs Tripp had informed Centrelink of her plans to travel outside Australia from 23 March 2006, and stating: “The information you provided shows that you can receive Family Tax Benefit until 23 March 2009.” Mrs Tripp was asked to inform Centrelink if her travel plans changed. Mr and Mrs Tripp said the impression they formed from their communications with Centrelink was that Mrs Tripp could continue to receive FTB provided she returned to live in Australia by 23 March 2009.
Mrs Tripp’s mother took the second youngest child back to Fiji on 9 March 2006 and Mrs Tripp departed with the baby on 23 March 2006. Mrs Tripp took their house in Fiji off the market and resumed living there with the children. She organised housemaids/nannies to help care for the younger children, which is not costly in Fiji, enabling her mother to return to her own home which is about 300 kms away. On 3 June 2006, Mrs Tripp and all the children except for the oldest child, returned to Australia for the school holidays, departing again on 16 June 2006 in the case of the second oldest child, and on 24 June 2006 in the case of Mrs Tripp and the three other children. Mrs Tripp spent six days in Australia in July 2006 and she and three of the children spent a week in Australia in August 2006. They all returned to Australia in December 2006/January 2007 for varying periods.
Mrs Tripp said that as a result of taking maternity and other leave, her employment with Air Pacific Airlines had not been due to end until about July 2006. However, as a result of her returning to Fiji and having made arrangements for assistance in caring for the children, she decided to return to work. Ultimately, she continued to work for Air Pacific Airlines until she came back to Australia permanently in late 2010. One of the benefits of working for Air Pacific Airlines was rebated travel for her and her children to Australia and she also travelled to Australia on a regular basis as a crew member. Mr Tripp, as a former long-serving employee of Air Pacific Airlines was also entitled to rebated travel and he used to travel to see his family when he could.
Mr Tripp said that during the course of 2006, he made further enquiries about enrolling the three older children in Catholic schools in Sydney. It became apparent that the two older children would have to repeat a year and they were very resistant to doing this. Mrs Tripp said she thought she could stay in Fiji until March 2009, in accordance with the advice from Centrelink, and, in about August 2006, she and Mr Tripp decided that she should remain in Fiji until 2009 to allow the two oldest children to complete their High School education there. Mrs Tripp said that, ultimately, she stayed an extra year in Fiji to enable her second oldest child to attend school for an extra year to achieve university entry equivalence and their oldest child to complete her commercial pilot training and build her flying hours, something which was much cheaper in Fiji than in Australia.
Mr and Mrs Tripp were asked about moving their furniture and belongings to Australia. Before Mrs Tripp’s leave was due to end in 2006, they were able to air freight much of these to Australia. However, some had remained in the house in Fiji while the house was on the market and Mrs Tripp resumed using these on her return to Fiji in late March 2006. Mrs Tripp said she has had a Commonwealth Bank account in Australia since the early 1990s, because, at that time, she was flying into Australia for her work on a regular basis and her sister-in-law, who lived in Brisbane where flights then landed, suggested this for convenience.
With regard to the two bedroom flat that Mr Tripp rented from January 2006, he said this was all he could afford at the time and the agent was aware that he and his family would be living in the flat. He regarded it as a first step. While the initial term of the lease was only 26 weeks, he continued to live in the flat under the terms of the same agreement for about seven years until he and his family moved to a larger three bedroom flat in July 2013. Mr Tripp said he bought a car after arriving in Australia in September 2005.
Their Current Financial Situation
Mr Tripp said he was made redundant by Railcorp in November 2012 but currently has a temporary position as a transport officer with Railcorp. They struggle to live within his earnings which go towards paying the rent, bills, health insurance and (Catholic) school fees (of about $10,000 a year). He is currently being treated for depression by a psychologist. Mr Tripp said the Centrelink payments received by Mrs Tripp help, although she currently has withholdings of $157.99 per fortnight towards recovery of the debt. (Information provided by Centrelink indicates that approximately $10,000 of the total debt of $21,811.90 has now been recovered.)
Mrs Tripp is also now doing casual work for eight or nine hours a week at Summerhill gym and their two older children are paying board. Mr Tripp said they are managing financially but struggling. He has a credit card debt of about $4,000 but otherwise has no debts apart for the money loaned to him and his wife by her parents for the purchase of their house in Fiji. Mrs Tripp said that the younger children want to take extra classes – for activities such as swimming, yoga and dance – but they cannot afford to allow them to do so and she was clearly upset to have to acknowledge this.
Findings on the Factual Background
My impression of Mr and Mrs Tripp is that are decent people who have sought advice from Centrelink on their entitlements and guidance on what is required of them and have then done their very best to satisfy what they believed to be Centrelink’s requirements. I am convinced that they have acted honestly throughout their dealings with Centrelink and whilst there is clearly a mistake made in the completion of the claim form lodged on 19 January 2006 (a tick to ‘Yes’ boxes in question 4). I am satisfied from Mr and Mrs Tripp’s evidence that the Centrelink officer managing Mrs Tripp’s claim went through the claim form with Mr and Mrs Tripp and that they had explained their circumstances to him. This was the second occasion when they had met him in person at the Leichardt office and it appears from the claim form that he, or another Centrelink officer, added the date 20 September 2005 in answer to question 3, the handwriting being the same as that for the reference number written on the cover page of the claim form.
With regard to their financial situation, I am satisfied from Mrs and Mrs Tripp’s evidence that their financial circumstances are straitened and that, for example, they have been unable to pay for certain extra-curricular and sporting activities for their children. However, they are managing, albeit with some difficulty, including paying Catholic school fees of about $10,000 a year. Moreover, I note that Centrelink has already recovered approximately $10,000 by withholdings from payments made to Mrs Tripp.
FIRST ISSUE: WAS MRS TRIPP QUALIFIED FOR FTB AND MATERNITY PAYMENT?
Section 36(2) of the Family Assistance Act which applies in Mrs Tripp’s case provides relevantly that a parent of a child “is eligible for family tax benefit in respect of the child at any time within the period of 13 weeks starting on the day of the child’s birth”.
Eligibility for FTB is set out in s 21(1) which requires, relevantly, that the individual claiming FTB “is an Australian resident”. As has been clearly stated by the Courts, explained in the decisions of Hafza and Baccon set out above, in law, the concept of residence - what connects a person with a place - has two elements: first, a physical presence in a particular place and, second, the intention to treat that place as home. Temporary absence does not of itself bring a person’s residence in a place to an end if the person has an intention to return and treat that place as home.
The general legal meaning of ‘residence’ is qualified in the context of FTB by the definition of ‘Australian resident’ that appears in s 7 of the Social Security Act 1991. Section 7(2) states that an Australian resident is a person (a) who resides in Australia and (b) is an Australian citizen, the holder of a permanent visa, or a particular special category visa holder which is not relevant in Mrs Tripp’s case. Mrs Tripp holds a permanent visa so the only relevant question is whether she resides in Australia. In determining this, s 7(3) requires that regard must be had to:
(a) the nature of the accommodation used by the person in Australia; and
(b) the nature and extent of the family relationships the person has in Australia; and
(c)the nature and extent of the person’s employment, business or financial ties with Australia; and
(d) the nature and extent of the person’s assets located in Australia; and
(e) the frequency and duration of the person’s travel outside Australia; and
(f)any other matter relevant to determining whether the person intends to remain permanently in Australia.
Mr Lozynsky, for the Respondent submitted that I should find that Mrs Tripp does not satisfy the residence requirement. However, I am satisfied from Mr and Mrs Tripp’s evidence that when Mrs Tripp arrived in Australia on 1 January 2006, after many previous visits, she intended to make Australia her home and the home of her family. Mr Tripp already had five brothers and their families living in Australia, he had moved here on 20 September 2005 to prepare the way for his family, having secured employment with Railcorp in Sydney as a Transit officer. Mrs Tripp visited Australia for six days in late October 2005 (26 October to 1 November 2005) to inspect proposed rental accommodation for the family which she found to be unsuitable. Mr Tripp subsequently rented a two bedroom flat as what appeared, at that time, to be an interim step, signing a residential tenancy agreement for the property on 11 January 2006. While Mr and Mrs Tripp had placed their house in Fiji on the market in June 2005, they had been unable to sell it.
It was around that time in January 2006 that Mr and Mrs Tripp decided to send their three oldest children back to Fiji because Mr and Mrs Tripp were unable, at short notice, to arrange their two oldest children’s enrolment in subjects of their choice in the Catholic system and decided to send them back to Fiji to complete the school year while Mr and Mrs Tripp explored the options for the children in Sydney. Mr and Mrs Tripp’s intention was that the three older children should, nevertheless, spend their school holidays in Australia, as for the most part they did at least during the June school holidays.
Because of Mr and Mrs Tripp’s long employment by Air Pacific Airlines, they were able to obtain rebated fares for themselves and their children to travel to and from Australia and to transport many of their belongings to Australia by air freight. Mr Tripp had already bought a car not long after his arrival in September 2005.
In my view, the evidence indicates that during January, February and until early March 2006, Mrs Tripp resided in Australia in terms of the legal meaning of that word and having regard to the factors set out in s 7(3). Thus, at the time she claimed Maternity Payment following the birth of her youngest child she was qualified for FTB and also, therefore, for a Maternity Payment. Mrs Tripp’s immediate plans changed in early March 2006 shortly before her mother’s return to Fiji, which appears to have been on 9 March 2006. At that time, Mrs Tripp decided to return to Fiji with the two youngest children (albeit that her mother appears to have taken the second youngest child, then 18 months old, back with her on 9 March 2006). However, even in early March 2006, it was still clearly Mrs Tripp’s intention to return to Australia later in the year in order to resume permanent residence. In my view, she was temporarily absence from Australia from 23 March 2006 until August 2006 when she and Mr Tripp decided that she should stay in Fiji until 2009 to see the two oldest children through High School. I note that during that period, Mrs Tripp spent from 3 June to 24 June 2006 and from 13 July to 19 July 2006 in Australia. It is unclear as to when in August 2006 Mr and Mrs Tripp made that decision. I note that she also spent from the 22 August to 28 August 2006 in Australia. However, it seems probable that a decision had been made before then given that Mrs Tripp went back to work in about July 2006.
On the basis of the above, I am satisfied that Mrs Tripp satisfied the definition of Australian resident from 1 January 2006 to 31 July 2006. Subject to other eligibility requirements that she seems to have satisfied, she was therefore eligible for FTB payments from 1 January 2006 to 31 July 2006 and qualified for Maternity Payment in respect of her youngest child. I am not satisfied that Mrs Tripp was an Australian resident for the period from 1 August 2006 and any FTB payments received by her from that date constitute an overpayment.
I note the operation of s 63 of the Family assistance Act is that once an FTB child leaves Australia and is absent for more than 13 weeks beginning on the first day of the child’s absence from Australia, the rate of FTB payable for the child is the base FTB child rate.
SECOND ISSUE: WAS THE DEBT CORRECTLY RAISED?
The outcome of my finding above is that Mrs Tripp did not receive an overpayment of Maternity Payment. However, she received an overpayment of FTB comprising an overpayment of the maximum rate of FTB in respect of each child, calculated separately for the period from 13 weeks after each child was absent from Australia, beginning on the first day of the child’s absence. The oldest three children departed Australia on 20 January 2006. The second youngest departed, with her grandmother, on the 9 March 2006 and Mrs Tripp left with the youngest child on 23 March 2006. As Mrs Tripp and her children were all absent from the 23 March 2006 the restrictions on their entitlements need to be considered together.
As the children and Mrs Tripp had different departure dates from Australia, the 13 week period for Mrs Tripp for all her children and the 13 week period for each child expired at different times. The higher rate of FTB paid expires at whichever departure date is earlier. So Mrs Tripp ceased being eligible for the maximum FTB rate for the older three children 13 weeks after they left Australia on 20 January 2006, and for the fourth child 13 weeks after she left Australia on 9 March 2006, despite the fact that Mrs Tripp had not yet been absent from Australia for more than 13 weeks. The youngest child departed Australia with Mrs Tripp, so their 13 week periods expired at the same time. After the 13 week period expires for each child the FTB is payable at the base rate only for that child.
While Mrs Tripp and her children re-entered Australia at different times before 1 August 2006, they were not present for more than 13 weeks, and so the FTB base rate continues to be payable. However, in the case of all 5 children, Mrs Tripp’s entitlement to FTB will cease at the time she ceased to be an Australian resident which I have found to be 1 August 2006.
These entitlements and the corresponding overpayments will have to be recalculated by Centrelink and I intend to remit the matter to the Respondent to recalculate the overpayment on the basis of my directions.
THIRD ISSUE: SHOULD THE DEBT BE RECOVERED?
The A New Tax System (Family Assistance) (Administration Act 1999 (the ‘Administration Act’) permits debts due to the Commonwealth to be written off of waived in certain circumstances. ‘Written off’ in this context means that no action is taken to recover the debt – it does not affect the liability of the person to repay the debt. Section 95 of the Administration Act permits the Secretary to write off a debt for a stated period or otherwise if (s 95(2)):
(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.
The debt in this case is not irrecoverable, it would appear that Mrs Tripp has some, albeit limited, capacity to repay, her whereabouts are known and it is cost effective for the Commonwealth to take action to recover the debt. Thus, write off of the debt is not an option in her case. I note Mr Tripp’s evidence that in 2008 he was told by a Centrelink officer at the Burwood office that the debt would be written off. Unfortunately, it appears that the meaning of ‘write off’ in this context was not properly explained to Mr Tripp who was under the impression that no further steps would be taken to recover the debt.
Section 97 of the Administration Act requires the Secretary to waive the right to recover a debt when it is attributable solely to an administrative error made by the Commonwealth:
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.
There appear to have been various errors made by Centrelink in the history of this matter and the Respondent accepts that Centrelink is responsible, in part, for the debts, and accepts findings made in the SSAT’s decision at [64] about the failure of Centrelink officers to properly assess the question of Mrs Tripp’s residence. I am satisfied that Mr and Mrs Tripp acted in good faith throughout. They relied on Centrelink officers to advise them about Mrs Tripp’s entitlements and did their best to complete the forms with the relevant information. However, they did not answer one of the questions on the claim form for Maternity Payment and FTB lodged on 19 January 2006 and answered one of the questions incorrectly, albeit that they were relying on the Centrelink officer, having explained their circumstances to him, to do what was necessary to ensure Mrs Tripp received her correct entitlement. Mrs Tripp appears also to have informed Centrelink each time she and the children departed from and re-entered Australia in accordance with the advice she received to this effect.
The evidence of the incorrectly completed form suggests that any debt may not have been solely the result of administrative error by the Commonwealth. However, even if I were to find that it was, I am not satisfied that Mrs Tripp is in severe financial hardship as required by s 97(2)(b). I accept Mrs and Mrs Tripp’s evidence that their financial circumstances are straitened and that, for example, they have been unable to pay for certain extra-curricular and sporting activities for their children, but they are managing, albeit with some difficulty, including paying Catholic school fees of about $10,000 a year. I note that Centrelink has already recovered approximately $10,000 by withholdings from payments made to Mrs Tripp.
Section 101 of the Administration Act provides for waiver in ‘special circumstances’. It states:
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 first requirement of s 101 is that the debt did not result from the debtor or another person ‘knowingly’ making a false statement or representation or failing or omitting to comply with a provision of the family assistance law. ‘Knowingly’ requires that there be actual knowledge: Re Callaghan and Secretary, Department of Social Security(1996) 45 ALD 435 at 443. I am satisfied from Mr and Mrs Tripp’s evidence that they did not knowingly make a false statement or representation or fail or omit to comply with a provision of the family assistance law.
The second requirement is that there are special circumstances other than financial hardship alone that make it desirable to waive the debt. In Beadle v Director-General of Social Security (1985) 60 ALR 225 (Beadle), the Full Federal Court affirmed the decision under review in the case, Re Beadle and Director-General of Social Security (1984) 6 ALD 1, in which the Tribunal, whilst acknowledging that the phrase “special circumstances” is “incapable of precise or exhaustive definition”, said, nevertheless, that the circumstances “must have a particular quality of unusualness that permits them to be described as special” (at 3).
The Full Federal Court in Beadle did not think it possible to lay down precise limits or precise rules; it would depend on the circumstances of the particular case as to whether they constituted special circumstances. Moreover, even though the phrase “special circumstances” lacks precision, it “is sufficiently understood in our view not to require judicial gloss” (at 228).
In Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545, Kiefel J, after referring to the Federal Court’s decision in Beadle, observed 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 Angelakos v Secretary, Department of Employmentand Workplace Relations [2007] FCA 25, at [33], Besanko J, having reviewed the relevant authorities in which the meaning of the words ‘special circumstances’ was discussed, emphasised the need for flexibility in determining what constitutes special circumstances, but said that the test would be overstated if the word ‘exceptional’ is emphasised. He said:
There is less risk of overstatement if the words ‘unusual’ or ‘uncommon’ are emphasised. Those words indicate, correctly in my view, the fact that there must be something that distinguishes the case from the ordinary or usual case.
I am not satisfied from the evidence that the circumstances of Mr and Mrs Tripp’s case have that particular quality of unusualness that brings them within the term ‘special circumstances’ for the purposes of s 101 of the Administration Act.
CONCLUSION
As indicated above, the matter must be remitted to the Respondent to recalculate the overpayment of FTB received by Mrs Tripp on the basis of my finding that she was an Australian resident from 1 January 2006 to 31 July 2006.
DECISION
The decision under review is set aside and the matter is remitted to the Respondent for reconsideration in accordance with the following directions:
(1) Mrs Tripp was an ‘Australian resident’ from 1 January 2006 to 31 July 2006 and was therefore qualified for Family Tax Benefit in respect of her children during this period. She was no longer an Australian resident from 1 August 2006 until she resumed Australian residence in January 2011. This means that the overpayment of Family Tax Benefit received by Mrs Tripp must be recalculated and will be less than that previously calculated by the Respondent.
(2) As a result of being an Australian resident for the period 1 January 2006 to 31 July 2006, Mrs Tripp was qualified to receive a Maternity Payment in respect of her youngest child who was born in February 2006.
(3) The recalculated overpayment of Family Tax Benefit received by Mrs Tripp is a debt due to the Commonwealth. If there is an outstanding amount of the debt that has not yet been recovered, that outstanding amount can continue to be recovered by withholdings, subject to this being within Mrs Tripp’s means.
I certify that the preceding 64 (sixty -four) paragraphs are a true copy of the reasons for the decision herein of Deputy President RP Handley. .............................[SGD]...................................
Associate
Dated 30 October 2013
Date(s) of hearing 23 October 2013 Date final submissions received 23 October 2013 Applicant In person Advocate for the Respondent G Lozynsky, Department of Human Services
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