Upton and Secretary, Department of Families, Community Services and Indigenous Affairs
[2007] AATA 3
•5 January 2007
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 3
ADMINISTRATIVE APPEALS TRIBUNAL )
) No S2006/115
GENERAL ADMINISTRATIVE DIVISION ) Re LORRAINE HELEN UPTON Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Senior Member L Hastwell Date5 January 2007
PlaceAdelaide
Decision The Tribunal affirms the decision under review
..............................................
L HASTWELL
(Senior Member)
CATCHWORDS
SOCIAL SECURITY – pensions, benefits and allowances – Family Tax Benefit – shared care arrangement – Court Order provided for alteration in percentages of care between parents at a future date – failure to notify a change in circumstances – administrative error considered – financial hardship considered – no special circumstances – decision affirmed
A New Tax System (Family Assistance) Act 1999 s 59(1)
A New Tax System (Family Assistance) (Administration) Act 1999 ss 71(1) & (2), 95, 97(1) & (2), 101
REASONS FOR DECISION
5 January 2007 Senior Member L Hastwell 1. Lorraine Upton (the applicant) seeks review of a decision of the Social Security Appeals Tribunal (the SSAT) of 12 April 2006 which affirmed a decision that she owed a debt to the respondent (the Department) arising out of an overpayment of Family Tax Benefit (FTB) and that there was no basis for waiver or write-off of the debt.
2. The applicant is the mother of Buster Wallaby Upton who was born on 28 September 1998. She is separated from his father. The Federal Magistrates Court made an order on 30 October 2003 whereby the applicant would have Buster in her care for 86 percent of the time until his 6th birthday. Thereafter she would have him in her care for 68 percent of the time. The father would have Buster in his care at all other times. This Order arose out of proceedings in the Federal Magistrates Court.
3. Buster's 6th birthday was on 28 September 2004. The applicant continued to receive FTB on the basis of 86 percent care from 28 September 2004 until 19 September 2005 (the relevant period).
4. The Department determined that the applicant had received an overpayment of FTB amounting to $1,098.13 during the relevant period. The SSAT confirmed the debt and found that there was no basis for write-off or waiver.
5. The applicant does not challenge the calculation of the overpayment. She argues that waiver or write-off should apply on the basis that she provided a copy of the Court Order to the Department in 2003 when it was made. She argues that the debt arises solely from an administrative error and that she received the payments in good faith.
issues
6. The issues for the Tribunal to determine are:
·whether the overpayment is a debt due to the Commonwealth;
·whether the debt arose from an administrative error by the Department;
·in that event, whether the payments were received in good faith by the applicant;
·whether all or part of the debt should be waived; and
·whether recovery of the debt should be written off.
legislation
7. The relevant legislation is to be found in A New Tax System (Family Assistance) Act 1999 (the Act) and A New Tax System (Family Assistance) (Administration) Act 1999 (the Administration Act).
8. Section 59(1) of the Act provides for the FTB to be shared between two people in certain circumstances as follows:
“59 (1) If the Secretary is satisfied that:
(a) an individual is an FTB child of an individual (person A); and
(b)the FTB child is also an FTB child of another individual who is not person A’s partner;
the Secretary may determine the percentage that is to be person A’s percentage of family tax benefit for the child.”
9. Section 71(1) of the Administration Act provides that if a person is paid more FTB than their entitlement, the overpaid amount is a debt due to the Commonwealth:
“71(1) If:
(a)an amount has been paid to a person by way of family tax benefit, maternity payment 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.
(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.”
10. Section 97 of the Administration Act provides for waiver in certain circumstances:
“97(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.
…”
11. The Administration Act also provides for waiver in special circumstances. Section 101 provides:
“101 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 hearing
12. The applicant represented herself at the hearing. The Department was represented by Mr Harvey. The T documents were received into evidence.
13. The applicant is a single parent who receives some Centrelink benefits and also works on a part-time basis. She has a part-time position as an enrolled nurse at the Royal Adelaide Hospital, and in addition she does some early childhood work for approximately 7 hours per week.
14. Buster is her only child and she has been separated from his father for several years. The father pays varying amounts of Child Support to her. There is a shared care arrangement in place with respect to Buster.
15. The applicant said that around the time of the Federal Magistrates Court proceedings in 2003 she was regularly in contact with the Glenelg office of Centrelink. She recalls that as being a very stressful period in her life. She would regularly speak to a Centrelink officer that she knew as Morwena. She is certain that once the final Court Order was made in 2003, she provided Morwena with a copy of the Order. She considered that it was Centrelink's responsibility thereafter to calculate what the altered percentage of care would be when her child turned six years of age and to ascertain what her correct FTB payment would be.
16. She told the Tribunal that she does not have a full understanding of how the Centrelink system works. She receives Child Support payments which vary regularly as the child’s father’s income varies. She receives Parenting Payment and she receives FTB. She receives monthly bank statements, but because her Parenting Payment varies according to her earnings (which she reports fortnightly), and Child Support payments regularly vary and impact on her Parenting Payment, she relies entirely on Centrelink assessing her entitlements correctly. She is unable to assess from her bank statement whether she has received the correct payment for any given period. She was not aware that she was receiving a higher amount of FTB than her entitlement until such time as a debt was raised by the Department. She assured the Tribunal that all payments were received by her in good faith.
17. The applicant acknowledged that she regularly receives letters from Centrelink advising her to notify of any change of circumstances, including a change in her percentage of care of her child. She acknowledged that she did not contact Centrelink once Buster turned six years of age. She assumed that Centrelink would act on the Court Order that she believed had been previously provided to them.
18. She currently receives income of $400 gross per fortnight from her nursing employment and $140 per week from her other work. She receives additional Centrelink and Child Support payments. She lives from week to week on her income and has no excess funds in the bank. The overpayment is being withdrawn at the rate of $10 per fortnight. She described her finances as being very tight. She is residing in rental accommodation.
19. The Department relied on documentary evidence as contained in the T documents and on its statement of facts and contentions.
20. At the Tribunal's request, some further investigation was made by the Department subsequent to the hearing. Arising from this, further documents were provided to the Tribunal and the applicant on 13 November 2006 as follows:
·Notes of conversation with Ms Morwena Tornquist, a Centrelink officer, identified by the applicant as the person she regularly spoke with at Glenelg. The Tribunal received this as Exhibit R2.
·Notes of conversation with Ms Anna Masi. The Tribunal received this as Exhibit R3.
·A list of instalments of FTB paid to the applicant between December 2001 and November 2005. The Tribunal receive this as Exhibit R4.
contentions
21. The applicant contends that the Department had knowledge of the altered care arrangement that came into place when Buster turned six years of age on the basis that she had previously provided a copy of the Court Order to the Department. She said that all overpayments had been received by her in good faith and arose solely from a Departmental administrative error.
22. The applicant contends that she is in financial hardship, and on that basis the full debt should be waived pursuant to s 97(2) of the Administration Act.
23. The Department contends that had it received a copy of the Court Order there would be some record on the applicant's file of receipt of that information. No such record can be found. In the alternative, the Department contends that even had the Court Order been provided to the applicant, she still had an obligation to notify a change of circumstances when Buster turned six. The Department further contends that the applicant is not in financial hardship within the meaning of s 97 of the Administration Act.
consideration
24. The applicant assumes that she gave the Court Order to the Department, but on her own admission, she does not have an accurate recall of that period. The Tribunal notes the comments made by Ms Tornquist as to the applicant's veracity (Exhibit R2). The Tribunal also found the applicant to be a straightforward witness and accepts that she received the overpayment in good faith. The Tribunal is satisfied, on the balance of probabilities, that at no stage did the applicant realise that she was being overpaid by the Department during the relevant period.
25. A search of Departmental records has failed to find a copy of the Court Order. There is no mention of the Court Order in any recorded contacts between the applicant and the Department.
26. The Tribunal is satisfied, on the balance of probabilities, that the applicant did not provide a copy of the Court Order to the Department. She may well have mentioned the outcome to the Departmental officer that she was dealing with, but the detail of the Order was not given to the Department.
27. The applicant had an obligation to notify the Department of her change of circumstances when Buster turned six.
28. The Tribunal is of the view that even had she provided a copy of the Court Order to the Department in 2003, she would still be obliged to make a notification when the care level changed in 2004. The Court Order is contained at T13. It is not phrased in terms of care percentages, but rather in terms of the blocks of time that each parent would have with Buster at certain stages. Events may well have changed as between the parties and with the level of shared care between October 2003 and September 2004. Notification was required by the applicant when the care percentage changed.
29. The Tribunal is satisfied that there was no administrative error by the Department, and therefore s 97 of the Administration Act does not apply.
30. There is provision for write-off of a debt contained in s 95 of the Administration Act when a person has no capacity to repay a debt. The Tribunal is satisfied that the applicant is in a difficult financial position, but she is not in severe financial hardship, and given the current rate of recovery, she will be able to repay the debt over time without suffering undue financial hardship.
31. The Tribunal has some sympathy for the applicant. Because of the way in which her various Centrelink payments are calculated it is difficult for an individual to always be aware that they are being overpaid. The impact of Child Support payments on benefits can create confusion where child support varies regularly as it has in this case. Nevertheless, there is no basis in this case on which the Tribunal can waive or write-off the overpayment.
32. In the circumstances the Tribunal affirms the decision under review.
I certify that the 32 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member L Hastwell
Signed: ............J Coulthard...........................................
AssociateDate of Hearing 8 November 2006
Date of Decision 5 January 2007
Advocate for the Applicant In personAdvocate for the Respondent Mr Harvey
Centrelink Legal Services Branch
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