Tukana and Secretary, Department of Social Services (Social services second review)

[2020] AATA 2503

Tukana and Secretary, Department of Social Services (Social services second review) [2020] AATA 2503 (7 July 2020)

Division:GENERAL DIVISION

File Number(s):      2020/0679

2020/0680

Re:Patricia Tukana

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Mr Rob Reitano, Member

Date:7 July 2020

Date of written reasons:        29 July 2020

Place:Sydney

For the reasons given orally at the conclusion of the hearing of this matter on 7 July 2020, the Tribunal affirms the decisions under review.

...........................[sgd].........................................

Mr Rob Reitano, Member

CATCHWORDS

SOCIAL SECURITY – parenting payment – overpayment – debt owed to the Commonwealth – entitlement to family assistance – whether whole or part of entitlement should be set off against the debt – Family Assistance Guide – whether exceptional and/or unforeseen circumstances – severe financial hardship – decisions under review affirmed

LEGISLATION

A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) s 84A

Social Security Act 1991 (Cth) s 1223

CASES

Tukana and Secretary, Department of Employment (Social Services Second Review) [2016] AATA 45

SECONDARY MATERIALS

Family Assistance Guide

WRITTEN REASONS FOR ORAL DECISION

Mr Rob Reitano, Member

29 July 2020

BACKGROUND

1. Section 84A of A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (Family Assistance Act) entitles the Secretary of the Department of Social Security to determine the whole or part of an entitlement to an amount of family assistance may be set off against a debt owed to the Commonwealth if the debt is a debt due by a person under the Social Security Act 1991 (Cth) (Social Security Act).[1]

   [1] See ss.84A(1)(b)(ii).

2. On 12 November 2014, Services Australia (which was then called the Department of Human Services, or Centrelink), determined that Ms Tukana owed the Commonwealth a debt in the amount of $19,844.47, because of overpayments of what are known as ‘parenting payments’ that were made to her under the Social Security Act in the period 1 March 2012 to 6 November 2013.

3. There was also a reduction in the calculation of the amount of the debt by $632.58 shortly after it was raised. I do not know why the debt was reduced but it appears some mistake was made in calculating it and that mistake was corrected. In any event, the total amount of $19,211.89 was owed to the Commonwealth because s.1223 of the Social Security Act provided that overpaid amounts of entitlements of parenting payments and other social security payments are to be treated as debts owed to the Commonwealth.

4. On 13 January 2016, the Tribunal affirmed a decision of the Secretary of the Department of Employment that the amount of $19,211.89 was owed by Ms Tukana to the Commonwealth under the Social Security Act. [2]

   [2] See Tukana and Secretary, Department of Employment (Social Services Second Review) [2016] AATA 45.

5. On 9 August 2019, Ms Tukana, not her children, not anyone else, was entitled to what is known as an arrears or back payment of $383.10, relevant to the period 1 July 2018 to 30 June 2019. An arrears or back-payment arises when there is a reassessment of an entitlement that means someone is entitled to more than they have already been paid by way of family assistance benefits.

6. Until November 2019, Ms Tukana was paying off her debt to the Commonwealth by having the amount of $20 each fortnight withheld from her Family Tax Benefit payment under the Family Assistance Act. There was no issue either about the existence of the debt or its repayment by instalments during that period.

7. On 17 September 2019, a further payment known as a top-up payment of $5,225.91 was calculated as being owed to Ms Tukana. Again, it was payable to her and her alone and no-one else. True enough it was to assist her with her family expenditure, but the money was payable only to her. This payment represented the balance of the entitlement that was due at the end of a financial year which arises because the entitlement has been paid in fortnightly instalments and may include supplements that a person is entitled to that have not been paid by way of fortnightly instalments. There is no dispute that these amounts were, in fact, owed to Ms Tukana.

8. The Secretary decided that the amounts of $383.10 and $5,225.91 would be withheld and applied in reduction against the debt that was owing by Ms Tukana under the Social Security Act. The Secretary made this decision relying upon the power available to her in s.84A of the Family Assistance Act.

9. Ms Tukana says that the Secretary was not entitled to withhold and apply the amounts owed to her against the debt.

10. Ms Tukana has asked the Tribunal to review the Administrative Appeals Tribunal, Social Services and Child Support Division, which affirmed the Secretary’s decision.

    CONSIDERATION

11. I must determine on the information before me whether the decision of the Administrative Appeals Tribunal, Social Services and Child Support Division was the correct or preferable decision.

12. Section 84A of the Family Assistance Act applies to the moneys owed by Ms Tukana because the debt is due under the Social Security Act. Under ss.84A(2) the Secretary may determine that the whole or a part of the entitlement is to be offset against the debt. If the Secretary makes such a determination under ss.84A(2), the amount of the entitlement and the amount of the debt are to be reduced accordingly.

13. Section 84A contains two preconditions for the capacity of the Secretary to offset debts to be enlivened. The first is the person must have an entitlement to family assistance.[3] The second is that the person must owe a debt under, amongst other Acts, the Social Security Act.[4]

    [3] Sub-section 84A(1)(a).

    [4] Sub-section 84A(1)(b)(ii).

14. Section 84A applies because Ms Tukana was at the time a person who was entitled to an amount of family assistance which is evidenced by her receipt of the entitlement. The requirement in ss.84A(1)(a) is met. The second precondition is met because Ms Tukana owed an amount to the Commonwealth under s.1223 of the Social Security Act, which provided that the overpaid parenting payments were a debt to the Commonwealth. That she owed this amount was affirmatively decided in the proceedings in 2016.[5]

    [5] See Tukana and Secretary, Department of Employment (Social Services Second Review) [2016] AATA 45.

15. The satisfaction of those two preconditions gave the Secretary power to make determinations under ss.84A(2), that the whole of the entitlement would be set off against the debt, so that the amount of the entitlement and of the debt were reduced under ss.84A(4). I find that the Secretary had power to make that decision under ss.84A(2) of the Family Assistance Act.

    Financial hardship

16. The Secretary has a discretion whether to make such determinations under ss.84A(2) of the Family Assistance Act. It is necessary to consider whether that discretion misfired in the circumstances of this case.

17. The Family Assistance Guide provides a policy which has been adopted by the Secretary about how the Family Assistance Act should be administered. At cl.7.2.3, the Secretary has laid down that if exceptional or unforeseen circumstances arise that may cause severe financial hardship, the Secretary might review a decision to offset amounts against debts owed. Ms Tukana has not brought any evidence that would justify a claim of either exceptional or unforeseen circumstances, let alone anything that would justify a finding of severe financial hardship.

18. In fact, she says that she anticipated that the money, if it had been received by her and not offset against the debt, would have been used to fund a holiday, and the purchase of computers for her children. They are not the indicators of financial hardship, let alone severe financial hardship. Nor, when balanced against Ms Tukana’s fortnightly pay received from her employment of about $1,800 per fortnight, or her partner’s Family Tax Benefit and Disability Support Pension of about $1,185 and $700 per fortnight respectively, is it possible to see how a case for severe financial hardship could possibly be made out.

    DECISION

19. Section 84A of the Family Assistance Act gave the Secretary power to make the decision in these matters. There was no basis for finding either exceptional circumstances, unforeseen circumstances or severe financial hardship that may have justified the preferable decision being to refrain from offsetting the debt in whole or in part. There is no other sound basis or reasonable basis for not treating the amount payable to Ms Tukana as an offset of the amounts owed to the Commonwealth by her. This is a case where it is proper that the Commonwealth recover moneys owed to it in accordance with the prescription in s.84A.

20. The correct or preferable decision is that the whole of the amounts of $383.10 and $5,225.91 be offset against the debt owed by Ms Tukana to the Commonwealth, such that the amount of the entitlement and of the debt be reduced accordingly.

21. In those circumstances, I affirm the decisions of the Administrative Appeals Tribunal, Social Services and Child Support Division on 17 January 2020 so that  the amounts of $383.10 and $5,225.91 are to be set off against the debt owed by Ms Tukana to the Commonwealth.

I certify that the preceding 21 (twenty-one) paragraphs are a true copy of the reasons for the decision herein of Mr Rob Reitano, Member

.............................[sgd]........................................

Associate

Dated: 29 July 2020

Date of hearing:	7 July 2020
Advocate for the Applicant:	Mr M Saqa
Solicitors for the Respondent:	Mr G Lozynsky, Services Australia