Wright; Secretary, Department of Family, Community Services and Indigenous Affairs and
[2007] AATA 1013
•10 January 2007
WRITTEN REASONS FOR ORAL DECISION
[2007] AATA 1013
Administrative
Appeals
Tribunal
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2006/1145
GENERAL ADMINISTRATIVE DIVISION ) Re SECRETARY, DEPARTMENT OF FAMILY, COMMUNITY SERVICES & INDIGENOUS AFFAIRS Applicant
And
GAIL WRIGHT
Respondent
DECISION
Tribunal Senior Member, Mrs Josephine Kelly Date of oral decision 10 January 2007
Date of written reasons 16 January 2007
PlaceSydney
Decision The decision under review, being the decision by the SSAT dated 1 August 2006, is set aside and the matter remitted for reconsideration in accordance with my findings that:
1. The portion of the debts arising from 15 April 2005 until 3 June 2005 is to be waived as it arose because of an administrative error, as conceded by the Secretary.
2. The balance of the debts not recovered as of 1 August 2006 are also to be waived because there are special circumstances.
[sgd] Senior Member Mrs Josephine Kelly
WRITTEN REASONS FOR ORAL DECISION
1.At the conclusion of the hearing of this matter in Sydney, the terms of the decision made and the reasons for that decision were stated orally. The Applicant requested the Tribunal to furnish a statement in writing of the reasons for its decision pursuant to sub-section 43(2A) of the Administrative Appeals Tribunal Act 1975.
2.The oral reasons for decision have been transcribed by Auscript, the Commonwealth Reporting Service, and edited only to the extent necessary to ensure clarity of expression, without in any way changing the reasons. The edited transcript comprises the reasons for the Tribunal’s decision and is annexed, and is furnished to the Applicant and to the Respondent.
CATCHWORDS
SOCIAL SECURITY – debt raised in relation to Family Tax Benefit & Child Care Benefit – debts properly raised – special circumstances found – debts waived.
LEGISLATION
Ss 95 & 101, A New Tax System, (Family Assistance) (Administration) Act 1999
CASES
Beadle v Director‑General of Social Security (1985) 7 ALD 670
Ryde v Secretary, Department of Family and Community Services [2005] FCA 866
WRITTEN REASONS FOR ORAL DECISION
Senior Member, Mrs Josephine Kelly 1. The Secretary seeks a review of the decision made by the Social Security Appeals Tribunal (“SSAT”) to waive part of two debts raised against Mrs Gail Wright relating to Family Tax Benefit ($3,749.87) and Child Care Benefit of ($871.26). The debts relate to the 2004-2005 financial year.
2. The Secretary conceded at the hearing that the debt arising from 15 April 2004 to 3 June 2004 should be waived because it arose as a consequence of administrative error. I therefore do not need to consider that aspect of the case further but that must be included as a finding in these proceedings to bring about the desired consequence for Mrs Wright. I note that because of the uncertainty about the final debt position of Mrs Wright I cannot affirm the SSAT’s decision but will rather set it aside and remit the matter for reconsideration.
3. There is no issue in these proceedings about whether the debt was properly raised. I am satisfied that it was. The questions for me are whether, all or part of the debts should be written off (section 95) or waived (section 101) of A New Tax System (Family Assistance) (Administration) Act 1999 (“the Act”).
4. In summary, the special circumstances Mrs Wright relied on were as follows. Her 2-year-old son suffered an accident in January 2004 when he launched himself off a lounge and crashed his head into a fish tank causing cuts to his face and neck which required surgery. He has several scars, one of which is keloidal.
5. Mrs Wright is of the opinion that the operation carried out at the time was botched because the family did not have medical insurance and an inappropriately qualified person undertook the operation when they had been assured a qualified doctor would do it. She believes that her family was treated as second-class citizens because they did not have medical insurance. Legal advice was sought but legal proceedings were not pursued.
6. Mrs Wright described the care she has given to her son’s scarring which she feels has helped that to improve to the extent it has. She described the various consultations and opinions given by her family doctor and three plastic surgeons and why the family did not proceed with corrective surgery at that time.
7. She also related expert advice from a plastic surgeon that her son should be reviewed when he reaches puberty as it is possible that a scar above his left jaw extending under his left ear may require surgery at that time. Photographs of her son’s injuries at the time of injury and of the scar just referred to in December 2004 were in evidence. She said that the emotional impact of this event and the aftermath were horrific.
8. Mrs Wright also referred to her health. She suffered acute disseminated encephalomyelitis in 1998. In September of that year her neurologist expected a complete recovery in the following 1 to 2 months. His most recent report was that of 14 May 1999 which does not describe the symptoms that she was suffering at that time but says that generally she was managing reasonably well. He was going to make an appointment for an MRI scan later that year. Mrs Wright believes that that is to investigate the possibility of multiple sclerosis. Mrs Wright has not yet had that scan but has an appointment to see her neurologist again on 19 January this year.
9. She explained that she had not done anything in the intervening years because she had two pregnancies in 2000 and 2001. I infer that she was also extremely preoccupied with bringing up two young children during that period and was able to cope and therefore did not pursue her own health needs at that time.
10. Mrs Wright said that she has suffered brain damage as a result of her 1998 illness. Her condition plateaued, she said, about 12 to 18 months after its onset. She described her symptoms as affecting her right side. She has no feeling in the right side of her face and the back of her head and has loss of feeling generally on the right side of her body. She suffers muscle spasms and constant pins and needles in her right foot and hand.
11. When she has muscle spasms she says she falls into a heap. She cannot feel hot and cold on the right side. She has problems with her memory and with her concentration. She was an accounting administration manager but could not do that work now because of her symptoms. She has to write every single detail down. She has taken medication in the past but it left her unable to do anything, she said.
12. She does carry out her household tasks and incorporates activities she was told to do following her 1998 illness to get her moving again, such as using pegs to hang out washing, and a broom instead of a vacuum cleaner. She intends to undertake an assistant nurse course but has to work school hours as both her young sons will be at school this year.
13. She is also involved with her sister in caring for their brother who is a paranoid schizophrenic. In essence, she ensures that he has his medication. She also described the difficulties in getting appropriate care for him. She also has assisted in the care of her 91-year-old father-in-law, although recently she has not because she cannot afford to travel to his home.
14. Her own father has had serious health problems beginning in the middle of 2006 when he was hospitalised after a hernia operation and later had surgery on his bowel. He suffers from depression and is not caring properly for himself. She went to Coffs Harbour near where he lives when his problems began but has not been able to return, which is of concern to her. It was not clear but I understood she has not returned because of difficulties in ensuring her continuing care for her two young sons and also financial constraints. Her father’s health is a continuing worry for her.
15. Mrs Wright described how her husband has been trying to re-establish his business as a beer plumber since their marriage in about 1999. His business was adversely affected after his previous marriage ended in about 1994. Since Mrs Wright and he married he has done various jobs including through an agency which he then began to work for in an administrative capacity and he has also worked as an Australia Post contractor.
16. Mrs Wright has not worked outside the home as I understand it since she has had her two young sons. She and her husband also have children from their previous marriages. In all they have seven children.
17. In about July 2004 Mrs Wright and her husband refinanced their home. Before the refinancing they had a mortgage of $230,000. The refinancing involved using the equity in their home of approximately $185,000 to fund an investment to generate income which could be used to pay their monthly interest payments on their new loans, which I understand were lines of credit. Mrs Wright said that they considered this investment their superannuation, that is, the $185,000 aspect of that loan.
18. When the decision was made to pursue that course her husband was in a permanent job. However, at the time of the refinancing being actually entered into he had left that employment because his pay and conditions of work had been reduced. Mrs Wright described how her husband’s work as a beer plumber was developing recently and at the end of the last year he believed he was going to be given a permanent position. However, it was given to someone else and consequently her husband feels he is a failure. His drinking has increased, the family is near breaking point and she is trying to keep it together.
19. Mrs Wright said that her husband is outstanding in his field and that unqualified people undercut his quotes. He continues to work as a subcontractor whose work is uncertain as he waits to be called out. She does not know what his income was for the last six months.
20. She was desperate at the time of the SSAT decision and followed the advice she was given and saw a financial adviser who advised drawing down from the investment part of their loan. Consequently, $5,000 was paid off the $185,000 part of the loan, and $45,000 off the $230,000 part of the loan. A further $50,000, approximately, was drawn down on the $185,000 line of credit and used to pay off about $35,500 of credit card debt, to connect to the sewer and to pay for expenses at Christmas time.
21. Consequently, the income from the reduced investment part of the loan which is now only $85,000, does not meet the loan repayment requirement although the total debt has been reduced to $365,000 from $415,000. The income from that source is reduced from about $31,450, as best I understand Mrs Wright’s evidence, to about $14,000. This income is what she has declared as her income as the investment is apparently in her name. Her 19-year-old son is also living with Mrs Wright and her family and pays weekly board of, I understand, about $50 per week. Her husband is also owed $3,500 for work done before Christmas. Other income is the benefits which are the subject of these proceedings.
22. In December of 2006 Mr and Mrs Wright supported her husband’s 19-year-old son when he was charged and convicted of an offence. It was the first time he had been in such trouble. His sentence included loss of his licence and community service. He appealed and his licence was not cancelled which allows him to continue his apprenticeship. The Wrights paid $1,250 for the hearing. The son has repaid $600.
Consideration
23. In relation to section 95 of the Act I accept the Secretary’s submission that the requirements of the section, particularly section 95(2), are not satisfied in this case and therefore the debt may not be written off. The only question therefore is whether section 101 may apply.
24. I have set out above a summary of the special circumstances Mrs Wright relies upon. I bear in mind the decision brought to my attention by Mr Gersten of Ryde v Secretary, Department of Family and Community Services [2005] FCA 866, a decision of Branson J on 28 June 2005. As Mr Gersten properly conceded the test in relation to special circumstances is perhaps somewhat less than has been previously accepted in this jurisdiction in relation to the AAT’s decision in Beadle v Director‑General of Social Security (1985) 7 ALD 670.
25. Bearing that decision in mind I have come to the opinion that the circumstances facing Mrs Wright at the present time are relevantly special circumstances. They are not just financial circumstances but in particular I take into account her health and her continuing symptomatology, her concern about a possible diagnosis of multiple sclerosis, the pressures on her from caring for her brother, her concern about her father’s health and her immediate family’s future in the context that she feels that it is about to break up. This is all on the background of their strained financial circumstances.
26. I am unable to determine on the evidence precisely the family’s income at present mainly because it is completely unpredictable but I am able to find that their expenditure exceeds their income because they are having to draw on the investment line of credit.
27. It is this confluence of circumstances, and not just one of them, which in my opinion constitutes special circumstances. The Secretary argued that financially they were just suffering the consequences of a risky decision to refinance and the increased interest rates suffered by all mortgage holders, and that the other circumstances are not special circumstances. However, as I have indicated I did not accept that submission.
28. As previously indicated, my decision will be to set aside the decision of the SSAT and remit the matter for reconsideration in accordance with my findings, as set out at the beginning of this document, to ensure that the concession made by the Department is properly taken into account in determining what the debt situation relevantly is, but, in essence, I am affirming that the debt should be waived as of 1 August as the SSAT determined.
I certify that the 28 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member,
Mrs Josephine KellySigned: Ms Preethi Nimmagadda
AssociateDate of Hearing 9 January 2007
Date of Oral Decision 10 January 2007
Date of Written Reasons 16 January 2007
Solicitor for Applicant Applicant self-represented
Advocate for the Respondent Centrelink Legal Services Branch
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