VISHNA ROBINSON and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

[2010] AATA 202

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 202

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2009/2205

GENERAL  ADMINISTRATIVE  DIVISION		)
Re		VISHNA ROBINSON

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Mr Egon Fice, Member

Date24 March 2010

PlaceMelbourne

Decision The Tribunal affirms the decision under review.

(sgd) Egon Fice

Member

Social Security – overpayment of family tax benefit – benefit claimed through lodgement of tax returns – use of correct claim forms - TFN claim person - failure to provide spouse’s tax file number –-administrative error – decision under review affirmed

A New Tax System (Family Assistance) (Administration) Act 1999 ss 3, 5, 7(2)(b), 8(2)-(7), 71(2), 97

A New Tax System (Family Assistance) Act 1999

REASONS FOR DECISION

24 March 2010 Mr Egon Fice, Member

1.      Mrs Robinson claimed and received Family Tax Benefit (FTB) payments for the financial years ending 2001 to 2008 inclusive totalling $27,635.04.  On 23 December 2008 a Centrelink officer from the Family Assistance Office advised Mrs Robinson that her entitlement to FTB had been reassessed and that she had been overpaid FTB.  As a result, the officer made a decision to raise a debt and recover the overpayments for the financial years in question.

2.      Mrs Robinson sought a review of the decision by an Authorised Review Officer (ARO).  By letter dated 28 January 2009 the ARO informed Mrs Robinson he had decided that the decision to raise debts for each of those years was correct.  Mrs Robinson then sought review of the ARO's decision by the Social Security Appeals Tribunal (SSAT).  On 20 April 2009 the SSAT decided to affirm the ARO's decision. 

3.      On 19 May 2009 Mrs Robinson lodged an application for review of the SSAT decision with the Tribunal.  In essence, Mrs Robinson claimed that overpayments of FTB for the years in question occurred due to an administrative error made by Centrelink.

4.      The sums of money received in the years in question are not in dispute.  Nor does Mrs Robinson dispute the fact that she received FTB payments at the single rate rather than at the partnered rate, which was the correct rate.  The only issue I am required to decide is whether Mrs Robinson's debt to the Commonwealth should be waived because the overpayment resulted solely from an administrative error made by Centrelink staff.

circumstances giving rise to ftb payments

5.      FTB payments are designed to assist with the costs of raising children.  These payments are separate to social security payments and are governed by ANew Tax System (Family Assistance) Act 1999 (the FA Act), and ANew Tax System (Family Assistance) (Administration) Act 1999 (the Administration Act).

6.      The Family Assistance Office (FAO) was established in order to administer FTB payments.  It is a partnership between Centrelink, the Australian Taxation Office (ATO), Medicare Australia (Medicare) and the Department of Families, Housing, Community Services and Indigenous Affairs (the Secretary).  The FAO had, up to the end of June 2009, officers located in Centrelink, Medicare and the ATO.

7.      A person entitled to be paid the FTB must make a claim for payment (Administration Act, s 5).  To be effective, a claim must be made in the form and manner required by the Secretary; and the payment may be claimed by way of instalment payments or by an annual payment for a past period (Administration Act, s 7).  In this case, Mrs Robinson elected to claim FTB for a past period upon lodging her tax return.

8. Section 7(2)(b) of the Administration Act provides:

(2)To be effective:

. . .

(b)in the case of a claim by an individual for payment of family tax benefit by instalment or for a past period—the tax file number requirement in section 8 must be satisfied in relation to the claim; and

. . .

9. Section 8(3), (4) or (5) must be satisfied in relation to each tax file number (TFN) claim person (Administration Act, s 8(2)).

10.     The expression TFN claim person is defined in s 3 of the Administration Act. In respect of a claim for the FTB, it means:

(a) …

(i) the claimant; and

…

(iii) if the claim is for payment of family tax benefit for a past period–any partner of the claimant during the past period;...

11. Although there is a provision (s 8(7)) dealing with exemptions from the requirements set out in s 8(2) in respect of each TFN claim person, that exemption does not apply to Mrs Robinson's husband.  There was no suggestion that she was unable to obtain his TFN.

12.     Mrs Robinson made her claim for FTB in each of the financial years in question on her tax returns.  More accurately, she provided information to her tax agent, Pavano & Company, to complete her tax return and claim the FTB.  Significantly, the copies of Mrs Robinson's tax returns provided to me, up to and including the 2005 tax year, do not include her spouse's name on the first page as is required.  Furthermore, on the FTB claim attached to those returns, where the form requires the claimant to enter family profiles during the claim period, the provision for the spouse number has been left blank.  Mr Robinson's name was included on the first page of the tax returns for the financial years 2006 to 2008 inclusive.  However, in each of those three years, the FTB claim form has omitted the spouse number.

13.     The instructions for completing the FTB tax claim state the following in respect of the spouse number:

Spouse number

If you did not have a spouse during this family profile leave M blank.

If you had a spouse you will have completed spouse details on pages 2 and 3 of the FTB tax claim.  Use the relevant spouse number from page 2 or 3 to identify the spouse you were with during this family profile period.

Write the relevant spouse number at M on your FTB tax claim.

the cause of the problem

14.     The reasons for the overpayment of FTB to Mrs Robinson appear quite clear to me.  Up to and including the 2005 tax year, Mrs Robinson's tax agent did not include her husband's name in the individual tax return and, more significantly, did not include the spouse number on the FTB schedule.  In fact, given what is stated in the instructions for the 2002 FTB tax claim, there should be three pages relating to the FTB schedule.  Mrs Robinson's tax returns only appear to contain what appears to be the final page, which contains the requirement to enter the spouse number. 

15. In accordance with s 8(2) of the Administration Act, Mr Robinson’s TFN was required to be stated in the FTB claim. It appears that this part of the FTB schedule was never completed by the tax agent and therefore the spouse number on the final page was never entered.  For that reason, her claim was treated as if she was the only TFN claim person. 

16.     As for the tax years 2006 to 2008 inclusive, although the tax agent entered Mr Robinson’s name in the tax return itself, the FTB claim form attached to the tax return again appears to have omitted a page, which should have contained spouse details including Mr Robinson's TFN and the spouse number allocated to him.  In fact the electronic lodgement declaration form provides as follows:

Family tax benefit

Where you have claimed the Family Tax Benefit (FTB), your claim will not be accepted if you do not provide the TFN of each person included in your claim unless you are exempt from providing it‑exemptions are explained in the FTB claim instructions and Explanation of Terms. 

reasons for overpayment

17.     For the tax years up to and including 2005, there was no indication in any of the forms lodged with the ATO that Mrs Robinson had a spouse during those particular years.  Understandably, FTB payments were made to her as if she was an individual claimant. 

18.     Although Mr Robinson’s name was included in Mrs Robinson’s 2006 tax return, and it appears to be an electronic lodgement form, there is no electronic lodgement declaration attached to that tax return and the spouse number is missing from the FTB claim, indicating that Mr Robinson’s tax file number was not provided with that return.  However, as is clear from the 2007 and 2008 tax returns, the electronic lodgement declaration form includes provision for the entry of the TFN of each person included in the claim for FTB.  Mrs Robinson (through her tax agent) never provided this information.  Therefore, subsequent to 2005, she was treated as an individual claimant by the ATO.  The error was made by her tax agent.

19.     Mrs Robinson said that when she lodged the initial claim for FTB, she completed a form which clearly stated that she was married and she named her partner, Mr Robinson.  However, as the instructions on the first page of that claim form indicate, it was to be used only for claims for fortnightly payments of FTB.  The form clearly states: NOTE: You cannot use this form to claim Family Tax Benefit through the tax system.  Mrs Robinson's FTB claims were made through the tax system by way of lodgement of an FTB tax claim.

20.     Mrs Robinson also submitted that she contacted Centrelink in April 2005 to enquire if she was receiving the correct payment.  The Customer Service Officer (CSO) recorded, in a file note dated 5 April 2005, that her partner's income had not been taken into account, possibly because authorisation to use her partner’s TFN had not been recorded for FTB.  This clearly was the case.  In a file note dated 7 April 2005, the CSO recorded that it had been confirmed that Mrs Robinson had a partner for the whole period but that the details could not be updated until debt notices had been issued. 

21.     A file note dated 6 October 2005 indicated that Mrs Robinson had again contacted a CSO who indicated that the ATO and the FAO had her listed as a single parent.  The CSO noted that Mrs Robinson's records were updated to indicate she was married on 5 September 1998.  Although Mrs Robinson said she again contacted Centrelink on 8 June 2007, the file note on that day records that the enquiry simply related to customer contact details.  Mrs Robinson telephoned Centrelink again on 19 December 2008 regarding FTB payments for the financial years ended 2005, 2006, 2007 and 2008.  The CSO noted that Mrs Robinson was regarded as single for those years when in fact she was partnered.

waiver of debt arising from error

22. Section 71(2) of the Administration Act provides that if a person has been paid more FTB than they are entitled to receive, the difference between the amount paid and the correct amount is a debt due to the Commonwealth.

23. Section 97 of the Administration Act relevantly provides:

97  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.

. . .

(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. 

24. The mandatory obligation to waive the right to recover a debt, or a proportion of a debt, applies only if that debt or proportion of it is attributable solely to an administrative error made by the Commonwealth. There is a further qualification. The waiver provisions in s 97 of the Administration Act only apply if the debt was raised after the end of the debtor's next income year or after a period of 13 weeks starting on the day on which the payment that gave rise to the debt was made. In this case, the debts in respect of each of the financial years in question were raised on 23 December 2008. Therefore, this pre-condition to waiver has been met. The only question therefore is whether the debts the Commonwealth seeks to recover can be attributed solely to its administrative error.

25.     The word solely, as defined in the Shorter Oxford English Dictionary, means:

1.As a single person (or thing); without any other as an associate, partner, sharer, etc.; alone; occas., without aid or assistance….

2.Only, merely, exclusively;… 

Therefore, if the debt arose for any reason other than an administrative error by the Commonwealth, the waiver provisions in s 97 of the Administration Act do not apply.

26.     In my opinion, the problem regarding Mrs Robinson's overpayment of FTB has risen because she has not appreciated the fundamental distinction between making a claim for FTB as fortnightly payments, and making a claim through the tax system for a past period.  Although she lodged a claim form in January 2000 with Centrelink in which she clearly stated she had a husband, Mr Robinson, and that they had been married since 5 September 1998, that claim form cannot be used to claim the FTB through the tax system.  The notes on the front page of the claim form make that abundantly clear.  Mrs Robinson's FTB claims were made on an annual basis for a past period utilising the tax system by lodging, with her annual tax return, an FTB tax claim. 

27.     Although Mrs Robinson did not personally complete her tax returns for the relevant years, she was responsible for the accuracy of their contents.  She was required to sign a taxpayer's declaration to that effect.  However, for the tax years 2001 to 2005 inclusive, her spouse's name was not included in her tax returns. 

28.     Nor did Mrs Robinson’s FTB tax claims contain a TFN for each TFN claim person, in accordance with s 8(2) of the Administration Act. Mr Robinson clearly fell within the definition of a TFN claim person. His TFN was required. In fact, the electronic lodgement declaration form clearly states that a claim would not be accepted if she did not provide the TFN of each person included in her claim unless she was exempt from providing it. The Secretary may exempt a person from providing a TFN in accordance with s 8(7) of the Administration Act. This clearly did not apply to Mrs Robinson because there was no impediment to her obtaining her husband’s tax file number.

29.     Because Mrs Robinson's tax returns contained no details about her spouse, no spouse number was entered at label M in the FTB schedule.  Understandably, the ATO treated her as a single parent.  Accordingly, I find that the error, which led to Mrs Robinson receiving FTB to which she was not entitled, arose out of the error made by her tax agent in completing her tax returns.  Mrs Robinson was ultimately responsible for her tax returns.  The Commonwealth made no error in respect of her FTB tax claims between 2001 and 2005. 

30.     As for the tax years 2005 to 2008, the evidence indicates that Mrs Robinson became concerned about the amount of FTB which she was receiving and made enquiries with Centrelink to determine whether those payments were correct.  In addition, her tax returns for the years 2006 to 2008 contained her husband's name and date of birth.  However, they did not contain her husband's TFN; although her husband was a TFN claim person as that term is defined in the Administration Act. In fact, s 8(3) of the Administration Act provides that, regardless of who the TFN claim person is, the statement of TFN can only be made by the claimant; in this case, Mrs Robinson.  There was no evidence that this occurred.  Given that the spouse number at label M on the FTB claim was not completed, it would appear that Mrs Robinson did not provide that information. 

31.     Therefore, despite the fact that she contacted Centrelink in 2005 confirming her marital status, she continued to be treated as a single parent by the ATO.  When Mrs Robinson contacted a CSO at Centrelink, the CSO recognised the problem was that Mr Robinson's income had not been taken into account.  However, the problem was deeper than that; although the CSO was not to know.  Also, the CSO noted that Mrs Robinson's details could not be updated until debt notices had been issued for the arrears. 

32.     It is understandable that Mrs Robinson is critical of Centrelink for not ensuring that her husband's income was taken into account for the 2006, 2007 and 2008 tax years.  However, the essence of the problem remained.  She had not provided a statement of her husband's TFN to the ATO when each of the FTB tax claims were made for those years.  In fact, the file note of the CSO made on 19 December 2008 set out the necessary steps to add a partner to her claims.  That included the linking of her partner to her by means of a customer reference number.  That of course could only be obtained following Mrs Robinson notifying Centrelink of her husband's TFN. 

33. Therefore, although it is understandable why Mrs Robinson formed the view that she did not cause the debts to arise for the 2006, 2007 and 2008 tax years, clearly her failure to comply with s 8 of the Administration Act was the underlying cause of the problem. Accordingly, I find that the overpayment of FTB in those tax years was not attributable solely to administrative error made by the Commonwealth.

conclusion

34. The reason why Mrs Robinson was overpaid FTB in all the tax years in question was that she failed to notify the ATO of her husband's TFN, as she was required to under s 8 of the Administration Act. That was her responsibility despite the fact that her tax agent prepared her FTB claims. That error can not be attributed to the Commonwealth. Therefore, the waiver provisions set out in s 97(3) of the Administration Act do not apply to Mrs Robinson. I find that the decision made by the SSAT on 20 April 2009 was correct and I affirm that decision.

I certify that the thirty four [34] preceding paragraphs are a true copy of the reasons for the decision herein of  
Mr Egon Fice, Member

(sgd): Leah Berardi

Clerk

Date of Hearing  29 January 2010
Date of Decision  24 March 2010
Self-represented Applicant          Mrs V Robinson
Solicitor for the Respondent        Ms H Weston, DLA Phillips Fox