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

[2017] AATA 294

VQSL and Secretary, Department of Social Services (Social services second review) [2017] AATA 294 (3 March 2017)

Division:GENERAL DIVISION

File Number:           2016/0808

Re:VQSL

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Brigadier AG Warner, Member

Date:3 March 2017

Place:Perth

The Tribunal dismisses application 2016/0808 pursuant to section 42B(1) of the Administrative Appeals Tribunal Act 1975 on the basis that it has no reasonable prospect of success.

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Brigadier AG Warner, Member

CATCHWORDS

SOCIAL SECURITY – payments – family tax benefit – application for family tax benefit out of time – special circumstances to extend the claim period – no basis for extension of period for lodgement – application has no reasonable prospects of success – application dismissed

LEGISLATION

Administrative Appeals Tribunal Act 1975 - s 42B(1)

A New Tax System (Family Assistance) (Administration) Act 1999 – ss 5(1), 10(2), 10(2A), 10(2)(b)(ii), 13(1)

CASES

Gavranic and Secretary, Department of Social Services [2015] AATA 934
Paraponiaris and Secretary, Department of Employment [2015] AATA 895

Tanoski and Secretary, Department of Social Services [2016] AATA 353

REASONS FOR DECISION

Brigadier AG Warner, Member

3 March 2017

INTRODUCTION

1. VQSL is seeking review of a decision of the Social Services & Child Support Division of the Administrative Appeals Tribunal (AAT1) dated 13 January 2016 (T2/3-9). That decision affirmed a decision of a Centrelink Authorised Review Officer (ARO) dated 30 October 2015 not to pay VQSL any Family Tax Benefit (FTB) payment for 2012-2013 on the basis that she did not meet the lodgement requirements by 30 June 2014 (T9/109).

2. The respondent requests dismissal of the application pursuant to s 42B of the Administrative Appeals Tribunal Act 1975 (AAT Act) on the basis that the application has no reasonable prospects of success (Exhibit 2).

3. An interlocutory hearing, attended by VQSL, was conducted on 9 January 2017.

   BACKGROUND

4. VQSL has been in receipt of FTB since 1996. She and her husband have two dependent children.

5. Prior to 28 June 2013, the provisions of the A New Tax System (Family Assistance) (Administration) Act 1999 (FAA Act) allowed claimants two years after the end of the financial year to claim FTB. However, the 2013 federal budget changed the period for valid FTB claims to one year after the end of the relevant financial year.  The Secretary of the Department of Social Services (the Secretary) has a discretion under s 10(2)(b)(ii) of the FAA Act to accept FTB claims beyond the one year period if “such further period (if any) as the Secretary allows, if the Secretary is satisfied that there are special circumstances that prevented the claimant from making the claim before the end of that first income year”.

6. On 13 February 2014, the Department of Social Services (the Department) sent a letter addressed to VQSL, advising the FTB claim changes. The letter advised that if she intended to claim payment for the 2012-2013 financial year, she was required to lodge a claim and confirm her income by 30 June 2014 (T4/41).

7. On 16 April 2015, VQSL telephoned Centrelink enquiring about FTB for 2012-2013. The relevant Centrelink record states: “advised past the date as now only 12 month claim period – customer advised tax agent was seriously ill and did not lodge – advised to check with agent to see if extension os [sic] time was lodged with ATO if not customer may lodge an appeal” (T13/116). 

8. On or about 15 May 2015, VQSL lodged her 2012-2013 income tax return through her tax agent (T2/6).

9. On 18 May 2015, an ARO responded to a request from VQSL for a review of a decision not to grant FTB for the 2012-2013 year. The written response stated in part: “I have investigated your review request and have found that a reviewable decision has not been made… A review can only be conducted once a claim has been lodged and a decision about it has been provided to you in writing” (T5/42).

10. On 1 July 2015, VQSL contacted the Department and requested a lump sum claim form for 2012-2013 (T9/108).

11. On 13 July 2015, VQSL’s accountant wrote to the Department providing two explanations for the late lodgement of VQSL’s income tax return and FTB claim. Her accountant explained that his office was not aware of the changes to cut-off dates for FTB claims, and that the principal of the firm had been diagnosed with and subsequently underwent surgery for cancer of the oesophagus (T8/99). 

12. On 15 July 2015, VQSL lodged a claim for an annual lump sum payment of FTB for the 2012-2013 year (T7/45-98, T9/109, T13/122).  The claim was dated 30 June 2015.

13. On 21 August 2015, the Department decided not to pay VQSL any FTB for 2012-2013 on the basis that she did not meet the claim lodgement requirements by 30 June 2014 (T12/115, T2/4).

14. On 30 October 2015, an ARO affirmed the Department’s 21 August 2015 decision. The ARO stated: “I must agree with the decision that you have no entitlement to the 2012/13 FTB payments under sections 10 and 13 of the FA Admin Act.  This is because you did not meet the lodgement requirements by 30 June 2014” (T9/109).

15. VQSL sought AAT1 review of the decision not to grant her FTB for 2012-2013, and on 13 January 2016, the AAT1 affirmed the decision under review (T2/3-9).

16. On 12 February 2016, VQSL lodged an Application for Second Review of Decision with this Tribunal. VQSL stated that she believed the decision to be wrong because it had not considered her health and stress, her husband’s health and stress, her daughter’s illness and the family’s financial hardship (T1/2).

    ISSUE

17. It is common ground between the parties that VQSL’s application for FTB for the 2012-2013 financial year was out of time. The issue before the Tribunal is the applicability of s 10(2A) of the FAA Act, which limits the period by which a claim for FTB can be extended on the basis of special circumstances.

    LEGISLATION

18. Section 42B(1) of the AAT Act provides that:

    The Tribunal may dismiss an application for the review of a decision, at any stage of the proceeding, if the Tribunal is satisfied that the application:

    (a) is frivolous, vexatious, misconceived or lacking in substance; or

    (b) has no reasonable prospect of success; or

    (c) is otherwise an abuse of the process of the Tribunal.

19. The principles relevant to the statutory test in s 42B are set out in Paraponiaris and Secretary, Department of Employment [2015] AATA 895 at [19] to [34], and detailed in the respondent’s submissions (Exhibit 6 para 6).

20. The provisions relevant to VQSL’s substantive application are found in the FAA Act, where s 5(1) makes it clear that a valid FTB claim must be in accordance with the relevant provisions of the FAA Act.

21. Subsections 10(2) and 10(2A) of the FAA Act read as follows:

    (2)       A claim for payment of family tax benefit for a past period is not effective if:

    (a)       the period does not fall wholly within one income year; or

    (b) the period does fall wholly within one income year (the relevant income year) but the claim is made after the end of:

    (i)        the first income year after the relevant income year; or

    (ii)       such further period (if any) as the Secretary allows, if the Secretary is satisfied that there are special circumstances that prevented the claimant from making the claim before the end of that first income year.

    (2A)The further period referred to in subparagraph (2)(b)(ii) must end no later than the end of the second income year after the relevant income year.

22. Section 13(1) provides:

    If an effective claim is made, the Secretary must determine the claim in accordance with this Subdivision.  If a claim is not effective, it is taken not to have been made.

    EVIDENCE

23. The evidence before the Tribunal in this interlocutory hearing comprised:

    ·Applicant’s Application for Second Review of Decision dated 11 February 2016 (Exhibit 1);

    ·Respondent’s request for Dismissal dated 18 August 2016 (Exhibit 2);

    ·Respondent’s Statement of Facts, Issues & Contentions dated 7 July 2016 (Exhibit 3);

    ·Applicant’s Submissions, under cover of email dated 7 August 2016 (Exhibit 4);

    ·Applicant’s Response to Respondent’s Application for Dismissal dated 28 August 2016 (Exhibit 5);

    ·Respondent’s Submissions dated 9 November 2016 (Exhibit 6);

    ·The “T Documents” (T1-T13, pp 1-126) (Exhibit 7); and

    ·The oral evidence of the applicant.

    CONSIDERATION

24. Before the Tribunal, VQSL presented as responsible, honest and solicitous for the welfare of her family.

25. VQSL’s reasons for her application to the Tribunal are summarised at paragraph 16 above.  AAT1 recorded VQSL’s case as “consideration should be given to her and her husband’s circumstances, and an extension allowed” and that “VQSL disputes that Centrelink notified her of the deadline of 30 June 2014” (T2/8 para 21, T2/9 para 29). The Tribunal considers that the AAT1 consideration of these issues was fair and thorough, and that having regard to the material before it and the relevant legislation, any further consideration would be nugatory.

26. Having regard to the evidence before it, the Tribunal is satisfied that VQSL submitted her 2012/13 claim for FTB on 15 July 2015 (T7/45-98, T9/109, T13/122). Subsection 10(2A) of the FAA Act is unequivocal that the Secretary may only exercise the special circumstances discretion for a twelve month period, that is from the beginning of the second year after the end of the relevant financial year to the end of that second year. The Tribunal, standing in the shoes of the Secretary, is similarly constrained. Accordingly, there is no provision by which the lodgement period can be extended on account of special circumstances, regardless of how compelling those circumstances might be.

27. Relevantly, the respondent submits:

    The limitation on the discretion of special circumstances pursuant to section 10(2A) was considered in the matter of Tanoski and Secretary, Department of Social Services [2016] AATA 353 (30 May 2016).  At [15], it was discussed that in circumstances where an applicant had failed to apply for FTB for the 2012-13 financial year by 30 June 2014, the Secretary could only exercise the special circumstances discretion for the one year period from 1 July 2014 up to 30 June 2015 (Exhibit 3 para 24).

28. VQSL cites the Tribunal’s decision in the matter of Gavranic and Secretary, Department of Social Services [2015] AATA 934 in support of her application (Exhibit 4 para 28). However, in Gavranic the Tribunal relevantly and correctly stated at paragraphs  12 to 14:

    Subsection 10(2) paragraph (b) subparagraph (ii) of the FAA Act does give the Secretary of the Department of Social Services (the Secretary) a discretion to accept claims for FTB beyond the one year period if “such further period (if any) as the Secretary allows, if the Secretary is satisfied that there are special circumstances that prevented the claimant from making the claim before the end of that first income year”.

    However subsection 10(2A) of the FAA Act makes it clear that the Secretary may only exercise the special circumstances discretion for a twelve month period, that is from the beginning of the second year after the end of the relevant financial year to the end of that second year.

    For example, where an applicant failed to apply for FTB for the 2012-2013 financial year by 30 June 2014, the Secretary may only exercise the special circumstances discretion for the one year period from 1 July 2014 to 30 June 2015.

29. In regard to the Secretary’s discretion, the example given immediately above is analogous to VQSL’s circumstances in the present proceedings, where VQSL submitted an application for FTB for 2012-2013 on 15 July 2015 which was beyond the end of the second year.

30. The Tribunal is sympathetic to VQSL and her circumstances, and cognisant of the significant financial ramifications of the 2012-2013 FTB claim being lodged out of time.  However, there is no discretion that can be enlivened in the circumstances prevailing in this matter.

31. The Respondent contends that “there is a “high degree of certainty” that the application would not succeed if it proceeded to final hearing, given there is no basis to extend the lodgement period required by the Administration Act” (Exhibit 6 para 8). The Tribunal agrees.

    CONCLUSION

32. Subsection 10(2A) of the FAA Act makes it clear that the Secretary may only exercise the special circumstances discretion from the beginning of the second year after the end of the relevant financial year to the end of that second year. The Tribunal is satisfied that VQSL lodged her 2012/13 FTB claim after the end of the second year and accordingly the discretion cannot be exercised. The Tribunal concludes that VQSL’s substantive application should be dismissed pursuant to s 42B of the AAT Act as the application has no reasonable prospects of success.

    DECISION

33. The respondent’s section 42B dismissal application is successful.

34. For the above reasons, the Tribunal dismisses application 2016/0808 (being an application by VQSL for review of an AAT1 decision dated 13 January 2016) pursuant to s 42B(1) of the AAT Act.

I certify that the preceding 34 (thirty-four) paragraphs are a true copy of the reasons for the decision herein of Brigadier AG Warner, Member

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Administrative Assistant

Dated: 3 March 2017

Date of hearing:	9 January 2017
Applicant:	In person
Representative for the  Respondent:	Ms A Wong

Solicitors for the Respondent:          Mills Oakley Lawyers