Wagner and Secretary, Department of Social Services (Social services second review) - [2024] AATA 3599

Wagner and Secretary, Department of Social Services (Social services second review) [2024] AATA 3599 (11 October 2024)
Division:GENERAL DIVISION
File Number: 2023/7389
Re:Mr Tim Wagner
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Ms A E Burke, Member
Date:11 October 2024
Place:Melbourne

The Tribunal affirms the decision under review.
.....................................[sgd]...................................
Ms A E Burke, Member
Catchwords
FAMILY TAX BENEFIT – whether applicant entitled to family tax benefit – late lodgement of income tax return – whether special circumstances exist – decision under review affirmed
Legislation
Administrative Appeals Tribunal Act 1975 (Cth)
A New Tax System (Family Assistance) Act 1991 (Cth)
A New Tax System (Family Assistance) (Administration) Act 1999 (Cth)
Social Security Act 1991 (Cth)
Cases
Angelakos and Secretary Department of Employment and Workplace Relations [2007] FCA 25
Beadle and Director-General of Social Security (1984) 6 ALD 1
Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Dranichnikov v Centrelink [2003] FCAFC 133
Groth and Secretary Department of Social Security (1995) FCA 1708
Hooker and Secretary, Department of Social Services [2015] AATA 732
Nicholson and Secretary, Department of Social Services [2016] AATA 630
Onody and Secretary, Department of Social Services [2018] AATA 4990
Secretary, Department of Social Services and Hollis [2015] AATA 941
Secretary, Department of Education and Hng [2024] AATA 36
Secretary, Department of Social Services and McNamara [2016] AATA 189
Shanhun and Secretary, Department of Social Services [2016] AATA 675
Singleton and Secretary, Department of Social Services [2019] AATA 766
Secondary Materials
Guide to Social Security Law, Family Assistance Department of Social Services
REASONS FOR DECISION
Ms A E Burke, Member
11 October 2024
INTRODUCTION

Mr Wagner (the Applicant) is seeking a second-tier review by the General Division of the Administrative Appeals Tribunal (AAT2) of the decision made by the Secretary, Department of Human Services (the Respondent) that he was not entitled to Family Tax Benefit (FTB) for the 2020/2021 year pursuant to the A New Tax System (Family Assistance) (Administration) Act1999 (Cth) (the Act).
The application was heard via telephone on 9 September 2024, Mr Wagner was self-represented and Ms Vincci Chan, a senior lawyer in the Litigation Team of Services Australia appeared for the Respondent.
BACKGROUND
Mr Wagner has been in receipte of FTB since 2004; during the 2020/2021 financial year Mr Wagner had 3 eligible FTB children in his care and had elected to receive his FTB payment as a lump sum at the end of the financial year. Mr Wagner had also not received FTB for the 2019-2020 period.
On 20 May 2019, Centrelink advised Mr Wagner by letter that he needed to update his family income estimate by 14 June 2019. The letter advised Mr Wagner he could provide his own estimate or use the family income estimate calculated by Centrelink. Centrelink calculated Mr Wagner and his wife’s income by increasing their 2018/2019 financial year income estimates in line with changes to the Australian Average Weekly Earnings:
Your income estimate: $67,963.00
Your partner's income estimate: $62,298.00
Centrelink advised Mr Wagner if he did not update his family income estimate by 14 June 2019, they would use the estimates they had calculated. Mr Wagner did not contact Centrelink by 14 June 2019.
On 19 June 2019, Centrelink advised Mr Wagner by letter his FTB had been cancelled, because he and his wives’ income that his income estimate was too high, stating:
If your and/or your partner’s income changes
Please call us to provide a new income estimate if you want us to reassess your eligibility for Family Tax Benefit for the current financial year.
If your and/or your partner’s income changes and you do not tell us before the end of the current financial year, you can still ask us to reassess your eligibility for the periods you have not received Family Tax Benefit. You can do this by making an annual lump sum claim for Family Tax Benefit online or calling us on 136 150. You must do this within 12 months of the end of the financial year you are claiming for.
On 17 July 2019, Centrelink records note Mr Wagner called to advise of a change in his FTB income estimate. The record states:
Cust called to advise that children didn't have study details recorded. Have updated this using the child education workflow. Cust also asked about changing FTB income estimate. Unable to code as cust not receiving payments and cust will need to apply for end of year lump sum payment.
On 15 July 2022, Mr Wagner’s accountant lodged his and his wives’ tax returns for the 2020/21 financial year.
On 20 September 2022, Centrelink records note Mr Wagner called regarding his FTB payment for the 2020/2021 financial year. The record states:
Discussion details: Cust has lodged paper claim for for LSC for FTB 02/09/2022 at Swan hill office, scanned documents are showing TNA file but not the paper claim form. called Swan hill office and spoke to Sue who will follow up and claim form located. I will then contact will message back on teams if cust to advise outcome.
LSC paper claim form to be issued from Swan hill office for customer to fill in and return.
Discussed special circumstances and appeal process.
Cust stated he understood from a phone call on 17/07/2019 that his FTb was restores with a lower est of $100000 and understood that reco would issue occur automatically when Tax lodged. Tax was lodged late due to with accountant.
On 27 September 2022, Mr Wagner lodged for an annual lump sum payment for FTB for the 2020/2021 financial year.
On 24 November 2022, Centrelink advised Mr Wagner by letter his FTB could not be paid, because they had not received his claim by 30 June 2022.
On 15 March 2023, an internal review by a departmental Authorised Review Officer (ARO) affirmed the earlier Centrelink decision that Mr Wagner was not entitled to FTB for the 2020/2021 financial year. The Reasons for Decision states:
For the 2020-21 financial year the cut-off date for submitting a claim, and for a customer and their partner to lodge tax returns, was 30 June 2022.
If a person’s lump sum claim is lodged after the allowable timeframe, their claim is determined to be not effective.
If a person’s lump sum claim has been lodged within the timeframe, but their tax returns are lodged after the allowable timeframe, their claim is determined to be not effective.
If there are circumstances that are unusual, uncommon or exceptional that prevent a person lodging a claim or their tax returns by this date, the cut-off date can be extended by a further 12 months.
You advised, and your tax agent letter details, that you had provided information for the preparation of tax returns however the lodgement was impacted by the agent practice having a fulltime partner resign, the increased workloads due to COVID-19 and JobKeeper applications and staff availability with lockdowns.
These circumstances are not unusual, uncommon or exceptional for the purpose of the criteria of granting an extension for lodgement of income tax returns.
Your claim was not effective so Family Tax Benefit cannot be paid for the 2020-21 financial year.
I acknowledge your contact with Centrelink on 17 July 2019 and your understanding from that contact, that your lower estimated income had been updated and once the actual family income was reported you would be paid a lump sum with Family Tax Benefit reconciliation.
I also note that:
• the procedure where Family Tax Benefit has been cancelled due to high estimated income (such as your 19 June 2019 cancellation) outlines that a new claim is required, and
• the document of that 17 July 2019 contact details that the lower estimate could not be recorded as your Family Tax Benefit was cancelled and you would need to submi a Family Tax Benefit lump sum claim.
On 20 September 2023, the Social Security and Child Support Division of the Administrative Appeals Tribunal (AAT1) affirmed the decision of the ARO, finding there was insufficient reason to extend the deadline beyond 30 June 2022 for lodgement of the claim. The Member stated at [16-18]:
I find that Mr Wagner gave his evidence in a frank and credible manner and found him to be a witness of credit. Having considered his submissions, I accept Mr Wagner’s submissions that he informed Centrelink on 17 July 2019 of new estimates, and this is supported in the hearing papers. As a result, Mr Wagner expected that he would receive FTB as he had done in previous years since 2004, and he waited for his income tax return to see how much he was to receive. When he did not receive any FTB in his 2020/2021 tax return, he realised that there was an issue.
However, the legislation requires that in order to be able to receive FTB for the 2020/2021 year, Mr Wagner would need to have his and his partner’s tax returns lodged by 30 June 2022 as well as make his claim by this time.
As such, even if I accept that there were reasons preventing Mr Wagner from lodging his claim by this time (due to his mistaken understanding that he had in fact done so on 17 July 2019, as he had contacted Centrelink and provided an updated estimate), I would also need to be satisfied that his and his partner’s tax returns were lodged before 30 June 2022. As it is accepted that this did not occur, I need to then consider whether a further 12-month period should be allowed. In order for this to occur, I would need to be satisfied that there were special circumstances that prevented Mr Wagner from making that income tax notification before 30 June 2022.
On 6 October 2023, Mr Wagner requested a review of the AAT1 decision by AAT2 as he disagreed with the AAT1 decision, stating:
I believe the covid 19 pandemic affected many business all in different ways, from staffing problems, which resulted in tasks taking longer to fulfil. I know I had this problem working on a farm we own. To not getting shearer in to shear sheep, to chemicals not in Australia to use. All this was out of the ordinary. We have used our accountant for over 10 years and been submitting Centrelik Family Tax since 2004 when we first had our child. Not once we had a late lodgement until covid 19 affected these business. There is a great deal of detail to our tax and we couldn’t do it without an accountant. Referring to Collins & SDSS (2022) to do so would of be an innorrect lodgement.
THE ISSUES IN CONTENTION
The issue in contention is whether Mr Wagner was entitled to FTB for the 2020/2021 financial year.
THE LEGISLATIVE CONTEXT
FTB is worked out as an annual entitlement, based on the combined adjusted income of the recipient and their partner. In the financial years in question, recipients could elect to receive FTB by fortnightly instalments based on their income assessments. Alternatively, they could elect to receive their full FTB entitlement as a lump sum after the end of the financial year.
The Tribunal is assisted by the Guide to Social Policy Law: Family Assistance (the Guide). The Guide provides assistance to those who administer the Act. While it is not bound to apply policy guidelines, the Tribunal will usually do so unless there are cogent reasons in a particular case not to do so (Refer to Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634).
The Guide outlines the complex system for an individual to apply for their full entitlement to FTB. The guide relevantly states at 4.2 there are 3 main types of claims for FTB:
past period claim (1.1.P.60)
bereavement claim (1.1.B.20), and
instalment claim (1.1.I.100).
A claim for FTB can include any combination of these claim types, but separate claim forms do not have to be lodged, provided the individual has provided all the necessary information in the claim to make the determination for each type of claim and the claim relates to one financial year.
The Guide at 1.1.P.60 defines a Past period claim (FTB):
For the purposes of FTB, a past period claim is a claim that relates to a past period of time in:
the current income year, and/or
a previous income year.
Lodgement timeframe
Individuals have 12 months after the relevant income year (1.1.I.75) to lodge a past period claim for that income year.
Example: Vicki wants to lodge a past period claim for the 2023-24 financial year. She has 12 months after the income year to lodge the claim. Therefore, she has until 30 June 2025 to lodge her claim.
The claim lodgement timeframe may be extended if special circumstances have prevented an individual from lodging a past period claim by the end of the lodgement year (1.1.L.30). However, any extension provided must end no later than the end of the second income year after the relevant income year.
The Guide at 1.1.I.75 defines Income year:
Income year is the year in which a person is entitled to receive FTB. The income year is a full financial year beginning on 1 July and ending 30 June.
The Guide at 4.2.1.10 outlines the requirements for claim lodgement & verification:
Need for a claim
An individual must lodge a claim to become entitled to FTB.
Act reference: FA(Admin)Act section 5 Need for a claim
Who can claim
Only individuals and ACOs can claim FTB.
Act reference: FA(Admin)Act section 6 Who can claim
How to claim
To be effective (1.1.E.10), a claim must be lodged in a form and manner as required by the Secretary. It must:
be on an approved claim form
include all relevant information and supporting documents
be lodged electronically or in person with Centrelink.
The Guide at 4.2.2.10 outlines the common FTB claim requirements:
To be effective (1.1.E.10) a claim must meet all of the basic claim conditions set out in the following table. If any condition is not met, the claim is not effective.
Claim is made in the form and manner specified by DSS
Applicant has answered all relevant questions
Applicant has provided all requested supporting documentation
Applicant provided for each TFN claim person (1.1.T.50) or TFN substitution person:
a TFN, or
a TFN statement, or
is eligible for an exemption from the TFN requirements.
The Guide at 4.2.2.20 outlines the specific requirements for past period claim:
Specific restrictions for past period claims
Note: Individuals have 12 months after the income year (1.1.I.75) to lodge a past period claim.
Example: Vicki wants to lodge a past period claim for the 2023-24 income year. Therefore, she has until 30 June 2025 to lodge her claim.
There are several restrictions, which affect whether a past period claim (1.1.P.60) for FTB can be effective (1.1.E.10). These include:
whether a previous claim has been made or determined
the income year the claim relates to, and
whether the individual or their partner (1.1.P.30) receives an income support payment (1.1.I.50).
The Guide at 4.2.3.10 provides a summary on restrictions on determining FTB claims and notes that if any conditions in the table below are not met, the taxable income cannot be assessed:
If the claim is made by an individual (1.1.I.90) for a past period, and
the past period falls in an income year before the income year in which the claim is made
the individual and/or their partner is required to lodge an income tax return for the year in which the past period falls, and
on the date of the claim, an assessment of their taxable income (1.1.T.20) has not been made for that year.
Explanation: A past period claim lodged in the year following an entitlement year, cannot be based on the individual's estimated income for that year where a tax return is required to be lodged.
Note: The individual's partner will also need to lodge a tax return, where required by the ATO.
Act reference: FA(Admin)Act section 14 Restriction on determining claim where income tax assessment not made, section 14A Restriction on determining claim where income tax return not lodged
Division 1 Sections 5 and 7 of the Act relevantly state:
5 Need for a claim
(1) The only way that a person can become entitled to be paid family tax benefit is to make a claim in accordance with this Subdivision…
7 How to claim
1) An individual or approved care organisation (a claimant) may make a claim:
(a) for payment of family tax benefit by instalment; or
(b) for payment of family tax benefit for a past period; or
(c) in the case only of a claimant who is an individual—for payment of family tax benefit by single payment/in substitution because of the death of another individual.
Form etc. of claim
(2) To be effective:
(a) a claim must:
(i) be made in a form and manner; and
(ii) contain any information; and
(iii) be accompanied by any documents;
required by the Secretary; and
(aa) in the case of a claim for family tax benefit by instalment—the bank account requirement set out in section 7A must be satisfied in relation to the claim; and
(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
(c) in the case of a claim by an individual for payment of family tax benefit in substitution because of the death of another individual—the tax file number requirement in section 8A must be satisfied in relation to the claim.
(3) A claim is not effective if it is made before the early claim day.
Subsection 10(2) of the Act states:
(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.
Section 14A Restriction on determining claim where income tax return not lodged of the states:
(1) If, in relation to a claim for payment of family tax benefit made by an individual:
(a) the claim is for payment of that benefit for a past period; and
(b) the past period falls in an income year (the past period income year) that is one of the 2 income years before the one in which the claim is made; and
(c) one or more of subsections (2) to (3A) apply;
then the claim is taken never to have been made.
(2) This subsection applies if:
(a) the claimant is required to lodge an income tax return for the past period income year; and
(b) the claimant has not lodged the return before the end of:
(i) the first income year after the past period 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 lodging the return before the end of that first income year.
(3) This subsection applies if:
(a) at the time the claim is made, a person is the claimant’s partner, and that person was the claimant’s partner at any time during the past period; and
(b) that person is required to lodge an income tax return for the past period income year; and
(c) that person has not lodged the return before the end of:
(i) the first income year after the past period 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 person from lodging the income tax return before the end of that first income year.
(3A) This subsection applies if:
(a) the claimant, or any other individual whose adjusted taxable income is relevant in working out the claimant’s entitlement to, or rate of, family tax benefit for the past period, is not required to lodge an income tax return for the past period income year; and
(b) the claimant does not notify the Secretary of the amount of the claimant’s adjusted taxable income for the past period income year before the end of:
(i) the first income year after the past period 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 that notification before the end of that first income year.
(4) The further period referred to in subparagraph (2)(b)(ii), (3)(c)(ii) or (3A)(b)(ii) must end no later than the end of the second income year after the past period income year.
CONTENTIONS
Applicant

Mr Wagner did not dispute he and his wife had lodged their 2020/2021 after 30th June 2022, and understood they would need to demonstrate that special circumstances had prevented them from submitting their tax return 15 days past its due date to be eligible for the lump sum FTB payment.
Mr Wagner disputed he had submitted his claim for FTB out of time.
Special Circumstances
Mr Wagner in his written submission contended special circumstances applied as:
·We are a family farming business consisting of my wife, three children and myself. We are located in a rural remote location in Yarrawalla, northern Victoria.
·In June 2022 I had serious ankle and foot injury that had me bed ridden for a significant time, and my wife and children had to do all the farm duties. I required surgery in Melbourne four hours away. More surgery was required again February this year at the Avenue hospital with Doctor David Shepperd.
·We have supplied supporting documentation from our accountant as to why the tax return was submitted late, and to explain how our family trust tax return is quite involved, and we did not have the ability to submit it ourselves as individuals, due to the complexities of our business.
·After speaking to legal Aid, they pointed out that the accountant provided reasons why the tax return wasn’t submitted on time, but that the reasons may not be classed as special circumstances. However, he thought Centrelink may not have considered we are located in a rural area, and it is not possible to swap accountants. There was also the personal injury sustained by myself that impacted on our business that prevented our tax return from being submitted on time. With the accountant’s letters and my personal injuries, these factors should allow for special circumstances.
·Our family is asking that you see our case as special as I know it is. Our family has worked hard to get over these stressful times of me not being able to work with my injuries, having my wife doing the duties I normally would have done. I know the attention to detail of the due date of our tax return passed us, but with the unusual situation we were dealing with at the time we were doing the best we could.
·I ask you to see the special circumstances of a family farm with the main worker injured and that all the jobs still need to be done. Living in a rural remote area where the closest accountant is 85km away, and with the complexities of a family trust and all the assets, depreciation etc., no other accountant could have taken over our books at the end of June. Additionally, and there is no way that we, as individuals, could lodge a tax return that could be deemed as true and correct. We simply do not have the skills and knowledge to do a tax return due to the complexities of our business.
·There are photos of my foot and ankle surgery that has been supplied through the AAT portal.
·There must be something that distinguishes this case from an ordinary case. I would hope this is far from ordinary case for everyone with a family that has a low income and requires help. When we first started this case, I believed that the account reasons were enough to show there were circumstances for an extension with the fact we are live in rural remote area and another account to complete our return in June was impossible. I know it is our responsibility to lodge our income return even as how complex as our family trust business is.
·Special Circumstances that prevented from submitted before 30th June 2022 our income tax was a fully rupture peroneus longus tendon. It required major ankle surgery from David Shepherd (Melbourne Orthopaedic Group) at the Avenue hospital Windsor. While at the hospital plantar fascia release and heel shift and a metatarsal lift was done. This ankle accident started on 08/06/2022 when I went to Loddon Podiatry for soreness which led to needing major ankle surgery and not be able to fully work in my position 6 months later, with my ankle failing again and needed more surgery. This was completed February 2024.
Mr Wagner submitted the following letter dated 12 June 2024 from his accountant:
We note that their 2021-22 Family Tax Benefit was not provided to them due to the late lodgement of their 2021 income tax returns. We have previously advised that it was through no fault of their own that these returns were lodged late and have advised of some of the factors which impinged on our ability to prepare financial reports and income tax returns in a timely manner for them.
We would also like to note the following on our client’s behalf:
1. In relation to the suggestion that another accountant should have been sought to assist with these matters, we note Tim and Jeannie operate a primary production business in a rural environment. Not only do we believe that most other regional firms would have had work load issues at this time, but they would not have the knowledge of Tim & Jeannie’s business to allow them to complete the required reports and tax returns in a short time frame.
2. Tim and Jeannie would not have the necessary expertise to prepare their income tax returns themselves. Given the specialised nature of their business and the entity that their business is conducted in (a discretionary y trust), they would not have been able to prepare detailed financial reports and a trust income tax return for their business. They could not have completed their individual income tax returns without this, as the primary source of income for both of them was their distribution from their family trust.
3. Our inability to prepare their tax returns in time stemmed primarily from issues with our firm’s workload. We are a small firm operating in a regional area with a client base consisting primarily of primary production businesses. Following the loss of key personnel from our firm, we experienced great difficulty in sourcing appropriately qualified accounting staff with the necessary knowledge and skills for our practice. We usually find this difficult enough, but the Covid-19 pandemic made this especially so.
4. It should also be noted that at this time, Tim and Jeannie would have been in the midst of their winter cropping program with Tim suffering a physical disadvantage with his ankle/foot injury.
Mr Wagner’s evidence enforce his written submissions emphasising his contention that his case is unusual as his circumstances as a farmer living in a remote location are such that it takes his case out of the ordinary situation. Mr Wagner’s evidence was:
·He lives in a remote location, where there are limited services, and he has no options other than using the accountant he does and has for many years.
·That he and his wife had submitted all the documentation to their accountant well in advance of the lodgement date of 30 June 2022.
·His lodgement was only late by 15 days.
·His taxation situation is complex as both a small business owner and primary producer, requiring the input of an accountant who is across his situation as it is beyond his own ability; even if there were other account/tax agents nearby, it would have been difficult for them to lodge his return due to its intricate nature.
·His injury to his ankle had a devastating impact on his farm and family, he was bedridden and unable to perform work (cropping and lambing) on the farm at its busiest time.
·His wife and children had to take on the work and they even removed their son from school to assist with the cropping.
·His injury occurred prior to 30 June 2022; he had been unable to pay enough attention to his taxation affairs and had not followed up his accountant to ensure his return was submitted on time.
·He elected to receive lump sum payments and overestimated their incomes to ensure they were never in a position of having to pay back FTB.
·That he had expected to receive payment in the order of $14,000 to $15,000 FTB and it was a huge financial impost on his family to miss out on a benefit for which they are eligible to receive.
Lodgement of claim for FTB
Mr Wagner disputed that he had submitted his claim for FTB late and contended that he had made a valid claim for FTB when he called Centrelink on 17 July 2019 to advise of his and his wife’s updated income estimate.
Mr Wagner submitted he had been in receipt of FTB since 2004, had not been required at any point to lodge a separate claim form for FTB, that his FTB had been paid annually when his tax rerun had been lodged, and that he had not queried anything with Centrelink between 17 June 2019 and 15 August 2022 as he was unaware that his FTB claim had not been submitted.
Mr Wagner contended he was only aware there was an issue with his 2020/2021 FTB when he did not receive a lump sum payment after his tax return had been lodged. He had not queried a lack of FTB payment for the 2019/2020 financial year as he was still receiving tax benefits and had assumed his FTB had been reinstated when he had called Centrelink on 17 July 2019.
Mr Wagner submitted he was unaware he was required to submit any additional forms to claim for FTB, believing his phone call to Centrelink on 17 July 2019 was sufficient to reactivate his claim for FTB and at no stage was he advised by Centrelink he was required to submit an actual claim form.
Mr Wagner contented Centrelink had compounded his situation, as he had to travel a significant distance to deal with Centrelink directly and had to make 2 separate trips to lodge forms for FTB, to which he was unaware were required and had never been requested in the past.
Respondent
The Respondent contended that Mr Wagner’s lump sum claim for the 2020/2021 financial year was not effective and was taken not to have been made, on the basis that:
a. he did not lodge his lump sum claim by 30 June 2022;
b. there were no special circumstances that prevented him from lodging the lump sum claim by 30 June 2022;
c. he and his partner did not lodge their tax returns by 30 June 2022; and
d. there were no special circumstances that prevented him and his partner from lodging their tax returns by 30 June 2022.
The Respondent submitted Mr Wagner lodged the lump sum claim for the 2020/2021 financial year on 27 September 2022 and therefore was considered to be a 'past period claim' as defined by Instruction 1.1.P.60 of the Family Assistance Guide.
The Respondent submitted Mr Wagner was required to lodge his claim and his income tax return for the 2020/2021 financial year by 30 June 2022, or by 30 June 2023 if there were special circumstances that prevented lodgement by 30 June 2022, in order for his lump sum claim to be considered effective.
The Respondent submitted it is not in dispute that Mr Wagner did not meet the effective claim requirements as he failed to lodge his lump sum claim and the income tax returns by 30 June 2022, as:
(a)the Applicant's and his partner's income tax returns were lodged on 15 July 2022; and
(b)the lump sum claim was lodged 27 September 2022.
Special Circumstances
The Respondent submitted the phrase “special circumstances that prevented” where it appears in sections 10 and 14A is not defined in the Act or related legislation. However, the meaning of the phrase has been subject to considerable review by the Administrative Appeals Tribunal and Federal Court.
The Respondent submitted the Tribunal in Hooker and Secretary, Department of Social Services [2015] AATA 732 (Hooker) stated:
14. In order for the time for making a claim to be extended, the Secretary (and so the Tribunal) must be satisfied, firstly, that circumstances existed that were special and, secondly, that those special circumstances prevented the claimant from making his or her claim within time
19. …In the case of a late claim for FTB, the special circumstances must prevent a person from making a claim on time. That is a more stringent, two-part test.
The Respondent submitted Deputy President Humphries in Secretary, Department of Social Services and Hollis [2015] AATA 941 cited the above extract from the Hooker decision with approval:
30. However, Dr Hollis needs to show more than that the circumstances she faced were special. In Hooker and Secretary, Department of Social Services [2015] AATA 732 Senior Member Toohey considered the test in s 10(2) of the Act, which imposes a similar test for late lodgement of a claim for family tax benefit to the test in s 49J(2). She observed (at [19]):
In the case of a late claim for FTB, the special circumstances must prevent a person from making a claim on time. That is a more stringent, two-part test.
31. Thus, in order for the time for making a claim to be extended, the Secretary (and in turn the Tribunal) must be satisfied of two things: first, that circumstances existed that were special and, secondly, that those special circumstances prevented the claimant from making her claim within time.
The Respondent submitted:
·The 'stringent two-part test' referred to by the Tribunal in Hooker has been consistently applied by the Tribunal.
·The words “special circumstances” are not defined in the Family Assistance Administration Act or related legislation.
·Previous Federal Court and Administrative Appeals Tribunal decisions have established that the circumstances must be “unusual, uncommon or exceptional”.
·In Beadle and Director-General of Social Security (1984) 6 ALD 1, the Administrative Appeals Tribunal stated:
12. An expression such as "special circumstances" is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.
·In Groth and Secretary Department of Social Security (1995) FCA 1708, the Federal Court stated:
12.The phrase "special circumstances", it has been said, although imprecise is sufficiently understood not to require judicial gloss...it is sufficient to observe that it would require something to distinguish Mr Groth's case from others, to take it out of the usual or ordinary case. That was, I consider, the only enquiry to be undertaken in this 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 Dranichnikov v Centrelink [2003] FCAFC 133, the Full Federal Court stated (emphasis added):
33. …what is required will be circumstances which distinguish the case in consideration from the usual case. There will be a requirement that the circumstances are such that takes the case out of the ordinary…
·In Angelakos and Secretary Department of Employment and Workplace Relations [2007] FCA 25, the Federal Court stated (emphasis added):
33. …There is less 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…
The Respondent submitted the Tribunal has also considered the term “special circumstances” in the context of late lodgement of tax returns:
·In Onody and Secretary, Department of Social Services [2018] AATA 4990, the Tribunal held that mere unusual circumstance alone is not special if it does not produce injustice in the circumstances. Member Hallwood stated that:
The challenges faced by Ms Onody were far from trivial, however her circumstances did not represent anything particularly out of the ordinary for people in her position. They did not include unexpected circumstances considered in Willersdorf as contributing to the “perfect storm” such as: the death of a brother; termination of staff; estrangement from family members; and not receiving the Centrelink notice.
There are a number of decisions of the Federal Court and the Tribunal that indicate unusual circumstances are not enough to be considered special circumstances. The circumstances must be unusual so as to produce an injustice in a situation where the sections were applied rigidly.[19] In particular the Full Federal Court has observed:[20]
Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet a great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other.
One of the reasons s 32C of the Administration Act exists in the legislation is to set the timeframe for lodging tax returns in order for the Department of Human Services to reconcile estimated income with actual income. There appears to be no injustice if the only penalty for failing to lodge tax returns on time is the penalty intended in the legislation.
·In Shanhun and Secretary, Department of Social Services [2016] AATA 675, Member Morris explained, at [37]-[38]:
...the two essential ingredients to be satisfied, to my mind, must be that (1) the special circumstances exist; and (2) that these special circumstances acted to prevent the individual – the taxpayer claiming the benefit – from lodging his or her return on time. 38. In looking at the meaning of this complete clause in the Administration Act, in the absence of a statutory definition, the Tribunal must look at the ordinary, everyday meaning of the word “prevent”. The Oxford English Dictionary definition of “prevent” is: ‘stop [someone] from doing something. The Macquarie Dictionary defines “prevent” as: “to keep from occurring; to hinder (a person, etc.) from doing something”.
·In Singleton and Secretary, Department of Social Services [2019] AATA 766 (Singleton) stated at [42] that:
The special circumstances must have been such that they served as an insurmountable block, hindrance or impediment to the lodgement taking place within the required time frame.
The Respondent submitted Mr Wagner’s claimed special circumstances were:
·He was not aware that his FTB had not been restored until he received his tax return for the 2020/2021 financial year in June 2022.
·He suffered an ankle and leg injury in June 2022 for which he required surgery.
·His accountant and tax agent were unable to lodge his and his partner’s tax returns on time due to numerous factors, most particularly he lives in the rural/remote area, and it is difficult to find another accountant who specialises in farm accountancy.
The Respondent contended Mr Wagner’s circumstances were not special:
(i)His FTB had been lawfully cancelled under section 31 of the Act.
(ii)That it was implausible he was unaware his FTB had not been restored, until he received his 2020/2021 tax return. Given he had been advised, on 17 July 2019, he was required to make a new lump sum claim at the end of the financial year. Additionally, Mr Wagner did not receive FTB for the 2019/2020 financial year and there was no evidence that he queried his FTB payments between 17 July 2019 and 15 August 2022.
(iii)His ankle injury was not uncommon, out of the ordinary, or unusual to the extent that it should be considered a special circumstance for the purposes of sections 10 and 14A of the Act, as it is not uncommon for FTB recipients, or their family members to experience medical conditions or injuries. Further, the evidence supplied did not explain why he could not lodge a lump sum claim by 30 June 2022 as it was dated in or after June 2022.
(iv)Further, as Mr Wagner’s accountant and tax agent had assumed full responsibility for the late lodgement of his and his partner’s tax returns, it was not his ankle injury which “prevented” lodgement of his and his partner’s tax returns, as defined in various Tribunal cases.
(v)Ordinarily, accountant error or delay in the late lodgement of tax returns does not constitute special circumstances. Mr Wagner’s accountant’s delay due to lockdowns and staff shortages are issues ordinarily faced by taxpayers who choose to operate businesses and is not an unusual or uncommon circumstance.
(vi)It is the responsibility of the individual to ensure their income tax returns were lodged on time. If his accountant failed to lodge the income tax returns on time, then Mr Wagner may have means of redress against them. However, as the Tribunal decisions mentioned above make clear, it is not for tax payers to bear the cost of Mr Wagner’s failure to lodge the income tax returns on time and the failure cannot be characterised as unusual, uncommon or out of the ordinary.
(vii)While Mr Wagner’s accountant had stated that a partner/full-time accountant had resigned in November 2020 and existing staff were unable to work their regular hours, they were not the only accountant at the practice at the time.
(viii)There is no evidence that Mr Wagner’s accountant had any medical issues which were uncommon, unusual or out of the ordinary.
(ix)The impact of COVID-19 on Mr Wagner’s ability to lodge his income tax returns was not special. Whilst Mr Wagner may have experienced financial difficulties and their accountant may have had staff shortage or pressure due to COVID-19, these challenges were general in nature and were experienced by many taxpayers who were required to lodge tax returns.
(x)There was no evidence that Mr Wagner attempted to lodge his income tax returns by other means.
(xi)Although the Agency did not send Mr Wagner a notice requiring him to lodge his tax returns by 30 June 2022 (as he was not in receipt of FTB), he knew, or ought to have known, that he and his partner had to lodge their tax returns by 30 June 2022, given their receipt of FTB since 2004 and his accountants were aware of the tax return lodgement deadline.

The Respondent contended Mr Wagner’s lump sum claim for the 2020/2021 financial year was not effective as there were no special circumstances that prevented him lodging the claim by 30 June 2022, pursuant to subsection 10(2) of the Act.
The Respondent contended Mr Wagner’s lump sum claim for the 2020/2021 financial year was taken never to have been made as he did not lodge his and his partner's income tax returns by 30 June 2022 and there were no special circumstances that prevented him from doing so, pursuant to subsection 14A(1) of the Act.
CONSIDERATION
Mr Wagner did not dispute he had not lodged his tax return within 12 months of the 2020/2021 financial year to seek a lump sum payment for FTB. The Tribunal therefore finds that Mr Wagner lodged his personal tax return for the 2020/2021 financial year on 15 July 2022, 15 days outside the allowable time.
Mr Wagner did dispute that he had lodged his claim for FTB for the 2020/2021 financial year late.
The Tribunal concurs with the Respondent that Mr Wagner’s FTB had been cancelled lawfully on 19 June 2019 as he had failed to update his family income, and when assessed on the notional rate of income, he was determined to have a nil rate of FTB. The Tribunal also concurs with the Respondent that Mr Wagner was required to reapply for his FTB and was advised by Centrelink of this requirement.
However, the Tribunal notes the advice from Centrelink to Mr Wagner about how to make a new claim for FTB was confusing, the letter of 19 June 2019 advised Mr Wagner he could call: You can do this by making an annual lump sum claim for Family Tax Benefit online or calling us on 136 150. You must do this within 12 months of the end of the financial year you are claiming for. Mr Wagner asserts his subsequent call to Centrelink on 17 July 2019, within the 12 months, was his application for the lump sum FTB payment for 2020/2021 financial year. The record of Mr Wagner’s call on 17 July 2019 does not indicate if the Centrelink officer advised Mr Wagner that he still needed to apply for the end of year lump sum; it merely records Mr Wagner’s claim was unable to be coded. Mr Wagner had requested the audio of the phone conversation, but the recording was no longer available.
The Tribunal notes that Mr Wagner has been in receipt of FTB payments since 2004, except for the 2019/2020 and 2020/2021 financial years. The Tribunal notes that the Service Australia websites advises families that they need to confirm their income and lodge a FTB lump sum claim before the deadline, as well as directing them to claim for an annual lump sum payment of FTB. Mr Wagner asserted prior to 2019 he had been receiving FTB payments with his tax returns, but had not been required to submit a new claim each year.
The Tribunal did not find Mr Wagner had failed to lodge his FTB claim in time as he had clearly called Centrelink on 17 July 2019. Given the confusing advice about how to lodge an annual claim, the Tribunal accepted Mr Wagner’s evidence he believed this was his application for a lump sum FTB payment.
Whilst the Tribunal has found Mr Wagner’s FTB claim was in time, this does not resolve his impediments with accessing his FTB lump sum for the 2020/2021 period as he clearly lodged his income tax return out of time.
As such, the Tribunal has found that Mr Wagner was not entitled to an FTB lump sum payment for the 2020/2021 financial year. It must next determine if there were special circumstances that prevented him and his wife from lodging their tax returns on time.
As the Respondent has clearly outline in its submission, the expression “special circumstances” has not been defined in the Act. However, the meaning of “special circumstances” has been considered extensively by the Federal Court and the Tribunal:
(c)In Re Beadle and Director-General of Social Security (1984) 6 ALD 1 where the Tribunal stated:
...An expression such as “special circumstances" is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special...
(d)In Groth v Secretary Department of Social Security (1995) 40 ALD 541, Kiefel J (as she was then) said at 545:
[…] for present purposes it is sufficient to observe that it requires something to distinguish Mr Groth’s case from others, to take it out of the usual ordinary case. That was, I consider, the only enquiry to be undertaken in this case. It would of course follow if one was to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.
(e)In Dranichnikov v Centrelink (2003) 75 ALD 134, the Full Federal Court stated at [66]:
… Other cases which have considered analogous words such as “special reasons” has tended to conclude, albeit in different contexts, that what is required will be circumstances which distinguish the case in consideration from the usual case. There will be a requirement that the circumstances are such that takes the case out of the ordinary…
(f)In Angelakos and Secretary Department of Employment and Workplace Relations (2007) 100 ALD 9 where the Federal Court stated at [33]:
… 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.
The Tribunal also concurs with the Respondent that the law has made it abundantly clear, the failure of an accountant to lodge their client’s tax return on time does not constitute special circumstances, as the Member in Nicholson aptly stated:
A taxpayer is responsible for ensuring that they lodge returns on time, regardless of what their accountant does or does not do. It is for the taxpayer to ensure their accountant is doing what he or she is being paid to do and on time.
The Tribunal found Mr Wagner to be a credible witness and accepted his evidence that his and his wife’s tax returns were not run of the mill because they were self-employed primary producers in a remote location. The Tribunal also accepted Mr Wagner’s evidence that he would have difficulty lodging his own return or finding another accountant who could easily undertake the work required to submit his and his wife’s tax returns.
However, the Tribunal concurs with the Respondent the late lodgement of tax returns due to the accountant not completing the tax returns as a result of staff changes, and COVID-19 restrictions would not be unusual, uncommon or exceptional, such as to amount to ‘special circumstances’ as that term has been interpreted in relation to the Act.
The Tribunal did not consider Mr Wagner’s submission that his situation was analogous to that in the matter of Secretary, Department of Education and Hng. In that case, Ms Hng was unaware her accountant had been hospitalised with a serious heart condition resulting in her being unable to contact him to ensure her and her husband’s income tax returns were lodged on time.
The Tribunal considered Mr Wagner’s situation was more aligned to that of Ms McNamara’s, where the Member in that matter of (Secretary, Department of Social Services and McNamara [2016] AATA 189), found:
Whilst it is regrettable that Ms McNamara’’s accountant was responsible, by his own admission, for Ms McNamara and her partner’s 2013 tax returns not being lodged on time (by 30 June 2014) that also does not amount to “special circumstances” that prevented Ms McNamara lodging her and her partner’s 2013 income tax returns on time: Cannon; Fedigan; Andre and Shanhun and see paragraph 29 above.
Further, consistent with the findings of the Tribunal in Cannon, Fedigan, Andre and Shanhun, Ms McNamara ’s accountant’s mistake, apparently due to his wife’s ill health, does not amount to “special circumstances” as that expression has been held to mean: refer to paragraphs 29 and 33 above. As the Secretary contended, Ms McNamara’s means of redress is against her accountant, not the public purse.
The Tribunal accepted Mr Wagner’s evidence that his ankle injury had left him in a very difficult position, bed-bound during the busiest part of his farming production. However, the supporting documentation did not demonstrate Mr Wagner’s ankle injury had prevented him from lodging his tax returns on time.
Indeed, the evidence from Mr Wagner’s accountant was “We have previously advised that it was through no fault of their own that these returns were lodged late … with Tim suffering a physical disadvantage with his ankle/foot injury”. The evidence did not demonstrate Mr Wagner’s circumstances hindered his lodgement of his tax return. The Tribunal did not consider Mr Wagner’s situation reached the level as outlined in the matter of Singleton:
The special circumstances must have been such that they served as an insurmountable block, hindrance or impediment to the lodgement taking place within the required time frame.
The Tribunal was very sympathetic to Mr Wagner’s situation, as the remoteness of his property from services such as Centrelink offices and accountants, does make normal transactions difficult. The Tribunal also accepts without question Mr Wagner and his family could benefit from the FTB, as they have also suffered significant financial hardship as a result of flooding.
However, the Tribunal on the evidence, was not persuaded Mr Wagner’s situation was unusual, uncommon or exceptional, as many Centrelink recipients live in regional and remote locations, and many Centrelink recipients too suffer from injuries yet still manage to submit the necessary documentation on time to be eligible for payment of benefits.
Whilst Mr Wagner may well feel that this decision is unfair, unintended, or unjust, sadly it is not out of the ordinary for FTB recipients to miss out on payments because they failed to lodge their tax returns on time.
DECISION
The Tribunal affirms the decision under review.

I certify that the preceding 70 (seventy) paragraphs are a true copy of the reasons for the decision herein of Ms Anna Burke, Member

...........[sgd]............................
Associate
Dated: 11 October 2024

Date of hearing:

9 September 2024

Applicant:

Self-represented – by telephone

Advocate for the Respondent:

Ms Vincci Chan

Solicitors for the Respondent:

Services Australia

Date of hearing:	9 September 2024
Applicant:	Self-represented – by telephone
Advocate for the Respondent:	Ms Vincci Chan
Solicitors for the Respondent:	Services Australia