Wilkie; Secretary, Department of Family and Community Services

[2004] AATA 886

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 886

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          N2004/78

GENERAL ADMINISTRATIVE DIVISION		)
Re		SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Applicant

And LEX WILKIE

Respondent

DECISION

Tribunal Mr S. Webb, Member

Date23 August 2004

PlacePort Macquarie

Decision The decision under review is set aside.  In substitution thereof the Tribunal decides that Mr Wilkie is not entitled to payment of Family Tax Benefit for the 2000-2001 financial year.

[Sgd] Mr S. Webb, Member

CATCHWORDS

SOCIAL SECURITY - family tax benefit - claim for lump sum payment of benefit - claim not lodged within specified period - tax system claim - separate claim for family tax benefit not lodged - erroneous advice - tax return not a valid form of claim - decision set aside

A New Tax System (Family Assistance) (Administration) Act 1999 s.5, 7, 10

A New Tax System (Family Assistance) Act 1999 s.3, 21

Formosa v Secretary, Department of Social Security (1988) 46 FCR 117

Re Secretary, Department of Social Security and McAvoy (1996) 44 ALD 721

REASONS FOR DECISION

23 August 2004 Mr S. Webb, Member         

1.      This application by the Secretary, Department of Family and Community Services (“the Applicant Secretary”) is for review of a decision of the Social Security Appeals Tribunal (“SSAT”) on 17 December 2003.  The SSAT were persuaded by Mr Wilkie’s submissions to set aside a primary decision to reject his claim for lump sum payment of Family Tax Benefit (“FTB”) for a past period.  Remitting the matter to Centrelink the SSAT directed that Mr Wilkie “be paid a lump sum of family tax benefit for the 2000/2001 tax year calculated in accordance with his Australian Taxation Office Notice of Revised Assessment dated 17 June 2003”.

2.      The matter came on for hearing in Port Macquarie on 31 May 2004.  At the hearing Mr Wilkie represented himself.  He and his wife, Mrs Jane Wilkie gave oral evidence.  The Applicant Secretary was represented by Mr A. Zang, Centrelink Service Recovery Team.  After taking evidence and receiving submissions from the parties, the matter was adjourned in order for the Applicant Secretary to specify the manner and form required for an FTB claim to be effective.  Written submissions by each party were received thereafter.

factual context

3.      The following material facts are not in dispute.

4.      On or about December 2001 Mr Wilkie lodged a tax return for the 2000-2001 financial year electronically from his accountant’s office.

5.      On 30 May 2002 the Deputy Commissioner of Taxation issued Notices of Assessment for Mr and Mrs Wilkie for the year ending 30 June 2001, with the effect that tax refunds were payable.

6.      On or about December 2002 Mr Wilkie engaged a new accountant who identified an error in his tax return for the 2000-2001 financial year.  Subsequently, an amended taxation return was lodged and Mr Wilkie was issued with a Notice of Amended Assessment on 17 June 2003.

7.      On 12 August 2003, Mr Wilkie lodged a claim for lump sum payment of FTB for the 2000-2001 financial year.  That claim was made using a Family Assistance Office claim form for that purpose.  On the same day a delegate of the Applicant Secretary rejected the claim because it was lodged outside the specified period.

8.      Mr Wilkie sought review of that decision, which was initially affirmed, and pursued the matter to the SSAT.  The SSAT found in Mr Wilkie’s favour and set aside the original decision to reject his claim.  It is that matter which is before this Tribunal for determination on the merits.

legal principles

9.      The application rises under the A New Tax System (Family Assistance) (Administration) Act 1999 (“the Administration Act”).

10.     Eligibility for FTB is determined pursuant to the relevant sections of the A New Tax System (Family Assistance) Act 1999 (“the FA Act”), relevantly s.3 and s.21. However, entitlement for payment of FTB is subject to the Administration Act. The only way a person can be entitled to payment of FTB is to make a claim in accordance with Part 3, Division 1, Subdivision A of the Administration Act (s.5). An individual can make a claim but to be effective that claim must, inter alia, be in a form and manner as required by the Secretary (s.7).

11.     A claim for payment of FTB for a past period must include a statement of the claimant’s tax file number (s.8).  Such a claim will be ineffective if it relates to one income year and is not lodged within the following year (s.10).  If an effective claim is made the Secretary must make a determination in accordance with the Subdivision (s.13) but can only do so if a tax assessment for the relevant year has been made (s.14).  If the claimant is eligible for payment of FTB during the period in question, the Secretary must determine that the person is entitled to payment of FTB (s.17).  However, if the claim is not effective it is taken not to have been made (s.13).

issue for determination

12.     The sole issue for determination in this case is whether Mr Wilkie made an effective claim for payment of FTB during the 2000-2001 financial year on or before 30 June 2002. 

summary findings

13.     Mr Wilkie did not lodge an FTB claim form with his tax return for the 2000-2001 financial year or with his amended tax return for that year.

14.     In or about September 2001 Mrs Wilkie sought information from Centrelink about how to claim FTB.  She was given a Family Assistance Office claim form and was informed she could claim FTB using the claim form or through the tax system.  She was not given a form to claim FTB through the tax system.

15.     In or about October 2001, Mr Wilkie telephoned the Australian Taxation Office (“ATO”) general help line and was advised that he could apply for FTB payment using his tax return.  The SSAT telephoned the ATO Family Tax Office general help line and received similar advice when considering Mr Wilkie’s case.  That advice from the ATO was in error.

16.     Merely lodging a tax return for the 2000-2001 financial year does not satisfy the requirement for an effective claim for payment of FTB during that period.

17.     Verbal communication of intention to claim FTB does not satisfy the requirement for an effective claim for FTB.

18.     Mr Wilkie lodged a claim for payment of FTB during the 2000-2001 financial year on 12 August 2003. That claim was not an effective claim pursuant to s.10 of the Administration Act.

decision

19.     This Tribunal has no power to waive the time limit on claiming payment of FTB for a past period.  Nor is there power to grant an ex gratia payment to Mr Wilkie.

20.     The decision under review is set aside.  In place of that decision the Tribunal decides that Mr Wilkie is not entitled to payment of FTB for the 2000-2001 financial year.

reasons for the decision

21.     Making this decision I have carefully considered all of the evidence, the submissions of the parties, the relevant case law and legislation.

22.     At the heart of this case is the form and manner of a claim for FTB that is required for the claim to be effective.

23.     In Mr Wilkie’s submission his tax return for the relevant period was sufficient.  That submission is given weight by his assertions, which I accept, that Mrs Wilkie was told FTB could be claimed through the tax system and he was given advice by the ATO that he could effect a claim using his tax return for the 2000-2001 financial year.  The SSAT made enquiries of the ATO and was given similar advice.

24. I do not agree with Mr Wilkie’s submission that lodgement of his tax return was sufficient. I accept that he relied on advice he was given. However, that advice was in error. Merely lodging a tax return for the 2000-2001 financial year was not sufficient to establish an effective claim for payment of FTB during that period under the Administration Act. That Act invests a broad discretion in the Applicant Secretary concerning the requirements for an effective FTB claim. The form and manner of an effective FTB claim, and the information to be provided therefore, are not prescribed or established by determination, declaration, approval or other formal mechanisms under the Administration Act.

25.     Mr Wilkie relied on the case of Formosa v Secretary, Department of Social Security (1988) 46 FCR 117, submitting that his 2000-2001 tax return “substantially complied” with the statutory requirements for an effective claim.  Mrs Formosa’s case concerned the requirements for an effective claim for the Age Pension under the Social Security Act 1947.   Mrs Formosa asserted that her oral claim was sufficient to be an effective claim.  The majority (Davies and Gummow JJ) considered the given requirements for an effective claim “may be mandatory as to some of the integers therein and directory as to others” and said:

“34.  … In this way the claimant would not fail because the claim had

been lodged at what it transpired was not an approved place or with a person

not approved by the Secretary because these integers in s. 159 (1) were

directory rather than mandatory.

35.  However, that is not to say that the requirement that the claim be in

writing and on a form is not mandatory.   The subject matter of the claim is

the disbursement of public moneys consequent upon the satisfaction of various

criteria laid down in the statute for the payment of particular pensions,

benefits and allowances.   It would be to attend the administration of the

legislation with the greatest uncertainty both for alleged claimants and for

those charged with administration of the legislation if oral applications were

to be treated as sufficient for the making of a claim.

…

37. … The requirement that claims shall be made in

writing is not to be characterised as a "mere matter of machinery for carrying

out the undoubted purposes of the Act : cf. Grunwick Processing Laboratories

Ltd. v Advisory, Conciliation and Arbitration Service [1978] AC 655 at 690.”

26.     It is necessary to carefully consider the form of Mr Wilkie’s tax return for the 2000-2001 financial year.  The relevant document is to be found at T6 pp.11-32, in the form on an “Electronic Lodgement Declaration”.  Mr Wilkie made submissions about the information in that form “substantially complying” with the information required for an effective FTB claim.  It is true that his 2000-2001 tax return contains information that may be relevant to establish his eligibility for FTB. 

27.     The applicable requirements for FTB claims during the 2000-2001 financial year were given expression in published documents that are in evidence before me.  The “Family Tax benefit – tax claim form and instructions 2001” (Exhibit A1) sets out the ways in which a person may claim FTB:

“You have 2 choices in the way you can claim an FTB entitlement.

1.    As a direct payment – through the Family Assistance Office (FAO).

...

2.    Through the tax system.

…

You can claim FTB through the tax system – but you cannot claim it as part of your tax return.  You must complete a separate form.  You can then lodge it with you tax return.

…

You have until 30 June 2002 to lodge your FTB tax claim for the 2000-01 income year.” 

28.     The “Tax Pack 2001” (Exhibit A4) sets out similar information about methods of claiming FTB and states in relation to a claim through the tax system:

“You can claim FTB through the tax system – but you cannot claim it as part of your tax return. You must complete a separate form, the 2001 family tax benefit (FTB) tax claim (NAT 4117-6.2001) and then lodge it with your 2001 tax return.  You will need to read the Family tax benefit (FTB) tax claim instructions (NAT 4108 – 6.2001) before you complete your FTB tax claim.” [original emphasis]

29.     Mr Wilkie sought to rely on information that was published on the ATO website that was dated 20 June 2001 (Exhibit R1, Attachment A):

“Families who have not already claimed their Family Tax Benefit can now claim it through their tax return.  More information on the Family Tax Benefit is in the Tax Pack.”

30.     That information does not compel me to conclude that a tax return, alone, may constitute an effective claim for FTB.  I accept, however, that the wording used is not clear and may be open to misinterpretation.

31.     The SSAT was persuaded by the advice it received from the ATO concerning Mr Wilkie’s 2000-2001 tax return, especially in relation to the information contained under the heading “Tax Offsets and Medicare”, to accept that the tax return was sufficient to be an effective FTB claim.  I am compelled to a different conclusion by the simple fact that the tax return is not and does not contain a claim for FTB payment.  There is nothing in Mr Wilkie’s 2000-2001 tax return form that communicates his purported claim for an FTB payment.  It is true that there are references to FTB in the form.  For example, the cover sheet of the tax return form includes the following sentence:

“I authorise my tax agent to electronically transmit my income tax return and/or Family Tax Benefit claim or application for amendment.”

Page 6 of the form contains the following sentence:

“We, NORTHROP ACCOUNTANTS, declare that this tax return has been prepared in accordance with information supplied by the taxpayer…and the taxpayer has authorised me to lodge the tax return.”

32.     Those sentences point to the lodgement of Mr Wilkie’s tax return.  They do not point to the lodgement of a claim for FTB.  The first sentence clearly indicates that there is a distinction to be made between a tax return and a claim for FTB, either or both of which may be lodged by authority of the tax payer or claimant.  The second sentence clearly indicates the lodgement of a tax return and makes no reference to an FTB claim. 

33.     I am satisfied that Mr Wilkie’s 2000-2001 tax return is not a claim for FTB.  The essential prerequisite for FTB entitlement is that a claim must be made.  A claim, by definition, involves a demand for something as due or an assertion of a right to something (see Oxford English Dictionary, 2^nd edition 1989). A claim, therefore, is a demand or assertion in relation to a subject. Setting to one side the question of form and manner, it follows that the making of a claim for FTB essentially requires a written request for payment of FTB or other written communication to that effect. That is a mandatory requirement pursuant to s.5 of the Administration Act without which there can be no certainty or proper accountability in the administration of the FTB scheme and the disbursement of public funds by that means. The form and manner of such written request or communication is within the broad discretion of the Applicant Secretary to which I have referred above.

34.     Mr Wilkie’s tax return for the 2000-2001 financial year does not conform to the essential requirement of a claim for FTB.  It contains no request for FTB payment and does not, therefore, constitute a claim for FTB, even though it does contain some information that is relevant to his eligibility for FTB.  

35. That being the case, I am compelled to conclude that Mr Wilkie did not make a claim for FTB payment until 12 August 2003, on which day he lodged a claim form for that purpose. However, that claim is not an effective claim pursuant to s.10 of the Administration Act and is taken not to have been made. I note in passing, following Formosa v Secretary, Department of Social Security (above) that Mrs Wilkie’s request for information about claiming FTB in or about September 2001 does not constitute a claim for FTB.  However, I do not comprehend Mr Wilkie’s submissions to rely on that point.

36.     I am also compelled to conclude that the advice given by the ATO was in error.  Mere lodgement of a tax return for the 2000-2001 financial year does not constitute a claim for payment of FTB.  The broad discretion concerning the requirements attaching to an effective claim resides in the Applicant Secretary.  It is not a discretion that is within the ambit of the ATO. 

37.     In my opinion a person such as Mr Wilkie should be able to rely on specific advice that he is given by the government (see Re Secretary, Department of Social Security and McAvoy (1996) 44 ALD 721). In this case the advice given by the ATO was in error. Mr Wilkie relied on that advice and failed to make an effective claim for FTB as a result. That failure means his eligibility and entitlement, if any, for FTB during the 2000-2001 financial year cannot be realised.

38.     There is no mechanism or discretion available to me to address the unfairness of the situation in which Mr Wilkie finds himself. 

39.     I note in conclusion that the public interest in the proper administration of the FTB scheme is not served by the persistence of uncertainty concerning the requirements that attach to an effective claim for that Benefit.  That is especially so, and must be carefully considered, in cases such as this where a person may be caused to suffer as a consequence of such uncertainty through no fault of his own and without any mechanism for relief.

40.     I remit the matter to the Applicant Secretary to consider Mr Wilkie’s request for an ex gratia payment.

I certify that the 40 preceding paragraphs are a true copy of the reasons for the decision herein of Mr S. Webb, Member

Signed:         A. Krilis
  Associate

Date/s of Hearing  31 May 2004
Date of Decision  23 August 2004
Advocate for the Applicant  Mr Andrew Zhang
Representative for the Respondent          self-represented