YSQD and Secretary, Department of Social Services (Social security second review)
[2025] ARTA 1192
•31 July 2025
YSQD and Secretary, Department of Social Services (Social security second review) [2025] ARTA 1192 (31 July 2025)
Applicant:YSQD
Other Party: Secretary, Department of Social Services
Tribunal Number: 2024/0708; 2024/0732
Tribunal:Senior Member T Hamilton-Noy (second review)
Place:Melbourne
Date:31 July 2025
Decision:The Tribunal affirms the decision under review.
Statement made on 31 July 2025 at 1:05pm
Names used in all published decisions are pseudonyms. Any references
appearing in square brackets indicate that information has been removed from this
decision and replaced with generic information so as not to identify involved
individuals as required by subsections 161(1B)–161(1C) of the A New Tax System (Family
Assistance) (Administration) Act 1999.
Catchwords
Family tax benefit top-ups – time frames not met for lodging income tax returns – no special circumstances that prevented the Applicant and her partner from lodging – untested evidence due to non-appearance of Applicant at the hearing
Legislation
Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024
A New Tax System (Family Assistance) Act 1999
A New Tax System (Family Assistance) (Administration) Act 1999
Cases
Afghani and Secretary, Department of Social Services [2017] AATA 410
Berges and Secretary, Department of Social Services [2020] AATA 3507
Confidential and Commissioner of Taxation [2013] AATA 112
Engineer and Secretary, Department of Social Services [2023] AATA 948
Estafanous and Minister for Immigration and Multicultural Affairs (Citizenship) [2025] ARTA 8
Fedigan and Secretary, Department of Social Services [2016] AATA 211
Hooker and Secretary, Department of Social Services [2015] AATA 732
Khadem and Secretary, Department of Social Services [2022] AATA 218
Nicholson and Secretary, Department of Social Services [2016] AATA 630
Onody and Secretary, Department of Social Services [2018] AATA 4990
Re Drake v Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Secretary, Department of Social Services and Elrington [2016] AATA 169
Secretary, Department of Social Services and Hollis [2015] AATA 941
Secretary, Department of Social Services and McNamara [2016] AATA 689
Secretary, Department of Social Services and Willersdorf [2016] AATA 535
Shanhun and Secretary, Department of Social Services [2016] AATA 675Singleton and Secretary, Department of Social Services [2019] AATA 766
Statement of Reasons
Background
This application relates to a refusal by the Respondent to pay the Applicant reconciled amounts (“top ups”) of family tax benefit for the 2019/20 financial year.
The Applicant is the parent of two children and, during the 2019/20 financial year, was paid family tax benefit by way of fortnightly instalments based on her and her partner’s estimates of income.
The Applicant and her partner lodged their 2019/20 income tax returns with the Australian Taxation Office (ATO) on 6 July 2021.
On 7 July 2021, a decision was made by an employee of the Respondent that top ups of family tax benefit were not payable to the Applicant. This decision was affirmed by an authorised review officer within Centrelink on 12 October 2022 and by the Administrative Appeals Tribunal (the AAT) at first review on 8 January 2024.
On 8 February 2024, the Applicant sought second review of the decision at the AAT.
From 14 October 2024, the AAT became the Administrative Review Tribunal (the Tribunal). Under the transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (the Transitional Act), applications for review to the AAT that were not finalised before 14 October 2024 are taken to be an application for review to the Tribunal. The Transitional Act gives the Tribunal the authority to continue and finalise any aspect of the review not already completed by the AAT. This decision and statement of reasons is made by the Tribunal.
The Tribunal hearing was conducted on 30 June 2025. The Applicant did not participate in the hearing. Her representative attended the hearing via telephone. A representative of the Respondent participated also by telephone. Documents had been provided to the Tribunal and were exchanged between the parties prior to the hearing, and relevant parts of these documents are discussed further below.
Relevant law
The legislation relevant to the administration of family assistance payments is contained in the A New Tax System (Family Assistance) Act 1999 (Cth) (the Family Assistance Act) and the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (the Family Assistance Administration Act).
The qualification requirements for family tax benefit are set out in Part 3 of the Family Assistance Act and, at subsection 21(1), provide that an individual is qualified for family tax benefit where they have at least one FTB child or at least one regular care child who is also a rent assistance child, meets residency requirements and their rate of family tax benefit is greater than nil.
Section 16 of the Family Assistance Administration Act states that if the Secretary is satisfied that a claimant is eligible for family tax benefit, the Secretary must determine the claimant is entitled to be paid family tax benefit for each day on which the determination is in force at the daily rate at which the Secretary considers the claimant to be eligible.
Section 20 of the Family Assistance Administration Act allows for a reasonable estimate of income to be used where their actual adjusted taxable income is not known and, at subsection 20(1), provides that:
(1) If:
(a) an individual's eligibility for, or rate of, family tax benefit is required to be determined for the purposes of this Division or Division 3; and
(b) information about the amount of adjusted taxable income needed for the determination of the eligibility or rate is not available (for example, because the taxable income of the individual or another individual cannot be known until after the end of the relevant income year); and
(c) the individual or, if the individual has died, another individual making a claim under this Division or Division 3 gives the Secretary an estimate of the amount needed; and
(d) the Secretary considers the estimate to be reasonable; and
(e) since the estimate was given, the Secretary has not given the individual a notice under subsection 20A(2) or 20B(2) with a start day that has arrived or passed;
the Secretary may determine the individual's eligibility for, or rate of, family tax benefit on the basis of the estimate.
Subdivision C of Division 1 of Part 3 of the Family Assistance Administration Act deals with variations to determinations of family assistance payments. Section 28 of the Family Assistance Administration Act provides for variations of instalments and past period entitlement determinations where an income tax return has not been lodged. Subsection 28(1) states that:
(1) This section applies if:
(a) a determination under section 16 or 17 is in force at, or was in force before, a particular time; and
(b) there are one or more days (the cancellation days) before the particular time in respect of which the following conditions are satisfied:
(i) the cancellation days occur in the income year (the cancellation income year) that began 2 years before the beginning of the income year in which the particular time occurs;
(ii) the claimant is entitled to be paid family tax benefit under the determination for the cancellation days;
(iii) the claimant, or the claimant's partner at the particular time (if he or she was also the claimant's partner at some time in the cancellation income year), or both, are required to lodge an income tax return for the cancellation income year but have not done so by the particular time;
(iv) by the particular time, an assessment has not been made under the Income Tax Assessment Act 1936of the taxable income for the cancellation income year of everyone to whom subparagraph (iii) applies.
Subsection 28(2) of the Family Assistance Administration Act states that if the section applies, the Secretary must vary the determination so that it has the effect that the claimant is not, and never was, entitled to family tax benefit for the cancellation days.
Subsection 32C of the Family Assistance Administration Act is relevant where the “first individual” is required to lodge an income tax return. Subsections 32C(3) and (4) provide that the relevant reconciliation time for the first individual is:
(3) The relevant reconciliation time is the time when an assessment is made under the Income Tax Assessment Act 1936of the first individual's taxable income for the relevant income year, so long as the first individual's income tax return for the relevant income year was lodged before the end of:
(a) the first income year after the relevant income year; or
(b) such further period (if any) as the Secretary allows, if the Secretary is satisfied that there are special circumstances that prevented the first individual from lodging the return before the end of that first income year.
(4) The further period under paragraph (3)(b) must end no later than the end of the second income year after the relevant income year.
Section 32D of the Family Assistance Administration Act applies where a person is a member of a couple and their partner is required to lodge an income tax return, and provides that, in these circumstances the relevant reconciliation time is:
(1) This section applies to the first individual for a same - rate benefit period if:
(a) the first individual was a member of a couple throughout that period; and
(b) the other member of the couple (the partner) is or was required to lodge an income tax return for the relevant income year; and
(c) the first individual continues to be a member of the couple until 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 partner from lodging the return before the end of that first income year.
(2) The relevant reconciliation time is the time when an assessment is made under the Income Tax Assessment Act 1936of the partner's taxable income for the relevant income year, so long as the partner's income tax return for the relevant income year was lodged before the end of:
(a) the first income year after the relevant income year; or
(b) such further period (if any) as the Secretary allows under subparagraph (1)(c)(ii).
(3) The further period under subparagraph (1)(c)(ii) must end no later than the end of the second income year after the relevant income year.
The Applicant’s position
The Applicant has provided a Statement of Issues to the Tribunal. As the Applicant did not attend the hearing to give evidence to the Tribunal, the Tribunal sets these out in full below (capitals, bold and underlining in original):
There are three issues:
1. The covid environment, the main issue, was ignored in the decision
2. The delay in lodgement of our tax returns was not material, 6 days
3. Centrelink’s 30 June deadline is not consistent with ATO lodgement requirements.
Special circumstances, distinguished from the ordinary, usual circumstances, uncommon, exceptional…all describe the environment in which events unfolded.
1. Firstly, we are not suggesting there is any one party responsible for our tax returns for the 2019/20 year being lodged on 6 July 2021 as opposed to 30 June 2021. It was circumstances related to the covid environment which caused delays that year and resulted in Centrelink denying our family assistance adjustment payment. The amount was $6398.58 which would be invaluable to our family. My partner’s income is inconsistent, particularly since covid, hence we opt for the end of year adjustment rather than do an early, potentially inaccurate, estimate of income.
During 2020/21, at the time of year when the 2019/20 tax returns would usually have been prepared, people were not allowed freedom of movement due to covid so a visit to the accountant’s office was prohibited for us and other clients. We proceeded to get our tax returns processed as per the usual time frame but subsequently found that there were unusual delays and difficulties.
The accountant introduced strategies to assist including an electronic lodgement program which unfortunately did not assist us. They relied more heavily on electronic media and follow up phone calls that in previous years but this did not adequately replace the usual face to face meeting when all relevant data was presented and matters discussed to finalisation. Some matters needed clarification and further work.
2. Our tax returns were lodged 6 days after the 30 June Centrelink deadline. The accountant was not aware of the amount of money involved in the adjusted family allowance payment due to us, neither were we until a letter was received from the ATO after the returns had been lodged. There was no apparent reason for the accountant to give us priority over other clients.
Preparation and lodgement of clients’ returns by accountants is staggered as per their lodgement program. There are variations in lodgement due dates depending on the ATO categorisation of the entity. May, the final category for individuals, is the relevant category for us, the category being ‘all individuals and trusts not required earlier…’ See attachment, 1 July 2023, Lodgement Due Dates (same as previous years). However, the reality is that the published dates for lodgement are not firm and a significant number of returns are deferred beyond 30 June.
The Deputy Commissioner of Taxation spoke in an article published in Accountants Daily, 18 June 2021, regarding concessions available. There is also a footnote on the first page referencing accounting professionals reinforcing that in the covid environment previous norms were not achievable. This article was provided in the appeal papers and is attached here also.
3. The Centrelink deadline for tax lodgement, 30 June, is not consistent with the negotiable ATO deadline. As per 2., the ATO do not insist on a 30 June deadline for all taxpayers. This is provided a tax agent has progressively submitted a percentage of their lodgements. This matter was explored at length at the hearing but barely got a mention in the Reasons for Decision.
Comments re paras of interest from the Reasons for Decision:
18 … it is not the intention of parliament that special circumstances be confined to the ‘exceptional’ case but rather that there be something that distinguishes the case from the ordinary or usual… YES PEAK OF COVID, ATTENDANCE AT THE ACCOUNT’S OFFICE PROHIBITED AND IMPACTED ON THEIR LODGEMENT PROGRAM TO OUR DETRIMENT, not ordinary or usual.
20 …circumstances in question must have prevented lodging tax returns on time… YES THE COVID ENVIRONMENT DID THAT.
…unusual circumstances such that it would be unjust, unreasonable or inappropriate to strictly apply the legislated time limit…balance the interests of the community… YES THE PEAK OF THE COVID ENVIRONMENT REPRESENTED UNUSUAL CIRCUMSTANCES AND THE INTERESTS OF THE COMMUNITY WOULD BE TO PROVIDE FOR THE CHILDREN.
23 … the only circumstance (attributing blame solely to the accountant and not acknowledging the covid environment, the real issue)… NO THERE WERE CIRCUMSTANCES (COVID) BEYOND THE ACCOUNTANTS CONTROL ALSO. AS ACKNOWLEDGED BY THE DEPUTY COMMISSIONER OF TAXATION, ACCOUNTANTS GENERALLY WERE FALLING BEHIND IN THEIR LODGEMENT PROGRAMS DUE TO COVID.
25 …an applicant must do more than merely establish fault of their accountant… YES, AND WE HAVE NEVER MADE AN ACCUSATION OF FAULT AS REGARDS THE ACCOUTNANT, SIMPLY REPORTED RELEVANT FACTORS DUE TO THEIR INVOLVEMENT AND PROCESSES, MATTERS BEYOND OUR CONTROL… THE PRIMARY CAUSE WAS COVID.
26 … the circumstances under which tax returns of [the Applicant] and [the Applicant’s partner] were not lodged with the ATO by 30 June 2021 were beyond their control… YES AGREED.
We believe that the situation arose in an unprecedented environment and that it was UNJUST, UNREASONABLE and INAPPROPRIATE to deny the family allowance payment to our family.
Summary of Relevant factors
The covid environment, the main issue, was ignored in the AAT decision. See para 23.
We believe that we acted and the accountant acted in an appropriate manner to attempt to adhere to norms in adverse conditions. Cast your mind back to that time, the community were struggling to meet basic needs. Businesses were going under, people were losing their jobs. Undoubtedly accountants were under additional pressure to assist struggling businesses and deal with covid.
As documented, the Assistant Commissioner of Taxation advised that additional concessions for delayed lodgements were necessary in the peak covid years.
We understand that Centrelink made the original decision not to pay us per their usual deadlines but these were unusual times. Paying us our entitlement would not be at odds with any community interest. The interests of the community would be served by providing for the children, as is intended in the family allowance provisions. See para 20.
The lack of consistency between the Centrelink and ATO tax lodgement deadlines has the potential to cause continued adverse outcomes for clients.
A copy of the ‘Accountants Daily’ article, referred to in the above submissions, was provided to the Tribunal. Dated 18 June 2021, the article referred to tax practitioners not being expected to meet the 85% on-time lodgement requirement “this year” and stated the following:
Speaking on the ATO tax professionals webcast on Thursday, ATO assistant commissioner Sylvia Gallagher revealed that tax agents would not lose access to the lodgement program if they failed to meet the 85 per cent on-time benchmark for the 2020-21 lodgement year.
The 85 per cent on-time lodgement requirement is a performance benchmark that tax agents are expected to meet, with access to the lodgement program revoked if practitioners repeatedly post poor lodgement results.
“We know the stress it provides and it is not the intent of the program,” Ms Gallagher said.
“This year, we’re not looking at the 85 per cent lodgement, so please don’t worry about it this year. It does not impact any lodgement.”
The Tribunal noted that the matters raised in the above written submissions by the Applicant were consistent with matters raised in a second set of written submissions prepared by the Applicant.
In the second set of submissions, the Applicant also asserted that the delay was “not ‘material’ as it was six days” and that, applying the “reasonable man test”, queried whether the Centrelink response was proportionate. The Applicant also queried whether, “applying the ‘reasonable man’ test again”, the interests of the community would have been best served by providing for the child. In addition, the Applicant’s second set of submissions provided the following information under the heading of “Other Relevant Points” (bold in original):
a.A Centrelink letter reminding us of the 30 June deadline for tax return lodgement would have been interpreted as the same deadline as the ATO. ‘Reasonable man test’ once again: Who would suspect that when it came to the crunch Centrelink would differ and not allow the same leeway as the ATO.
b.We were unaware of how significant the amount of the end of year adjusted Family Allowance would be until the tax returns had been lodged and assessed by the ATO. Had we been aware we would have represented the urgency to the accountant managing the lodgement. Apart form that we had no reason to ask the accountant to prioritise us ahead of other clients.
c.[The Applicant] is unwell. She is constantly stressed and anxious dealing with the child who is Autistic, has suffered from seizures and has speech difficulties. She would not have had the luxury of the time and energy to have researched the denial of payment as a potential (remote) scenario and is stunned at the severity of the Centrelink stance.
d.In a timely manner, we took all the steps we would usually take, from submitting the tax information at the appropriate time to dealing with queries, arranging signatures, making payment etc. Incidentally, Australia Post were offering a compromised service at the time. Tax returns that were forwarded to us and returned to accountant via Australia Post took longer than previously.
e.Once again, the accountant was not to blame for the late lodgement of the returns and the subsequent repercussions. He was unknowingly involved, no more. There are many references in the Respondent’s papers to accountant delays not being a valid reason for late lodgement. We are not arguing this was the issue. Covid and covid restrictions were clearly, undeniably the issue.
The Respondent’s position
The Respondent submits that there are no special circumstances in this case and there is no evidence that the Applicant was prevented, because of any special circumstances, from lodging her and her partner’s income tax returns by 30 June 2021.
The Respondent provided extensive written submissions to the Tribunal in this matter and included extensive reference to relevant case law, including the following.
In Hooker and Secretary, Department of Social Services [2015] AATA 732 (‘Hooker’), the AAT noted that (at [14]-[15] and [19]):
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.
The meaning of special circumstances for the purposes of social security law has been considered by the Tribunal and the courts on many occasions. It is an expression “by its very nature incapable of precise or exhaustive definition” and its meaning will depend on the context in which the circumstances occur. The circumstances need not be unique “but they must have a particular quality of unusualness that permits them to be described as special”: Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3; see also, for example, Groth v Secretary, Department of Social Security[1995] FCA 1708; (1995) 40 ALD 541.
…..
In such cases, it is sufficient for the Tribunal to be satisfied that special circumstances exist. 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.
In Secretary, Department of Social Services and Hollis [2015] AATA 941, the AAT cited Hooker and commented, in respect of the circumstances in the case, that (at [30]-[31]):
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.
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.
In Onody and Secretary, Department of Social Services [2018] AATA 4990 (‘Onody’), the AAT commented on special circumstances that (at [47]-[48]):
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. In particular the Full Federal Court has observed:
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 the AAT noted that (at [37]-[38]):
I accept that it was beyond the control of the Respondent that the firm did not lodge her tax return for the 2012-2013 financial year until 1 July 2014. But it was not beyond her control to have signed the authority to lodge her return earlier than the very last day of the relevant period. So while there may be specific cases where the ‘special circumstances preventing lodgement’ provisions as provided by section 32C of the Administration Act may be enlivened, 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.
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”.
The AAT in Singleton and Secretary, Department of Social Services [2019] AATA 766 (‘Singleton’), the applicant’s lodgement of her and her partner’s income tax returns were delayed due to having to seek a private ruling from the ATO, seeking advice from two different accountants to do so, the lodgement of an objection to the private ruling and subsequent appointment with an accountant to prepare income tax returns when the objection was successful. In finding that the applicant had not demonstrated special circumstances that prevented the applicant from lodging the income tax returns by the required date (based on the above circumstances in addition to other matters raised by the applicant), the AAT commented that (at [42]):
As indicated by this Tribunal in Re Synnes and Secretary, Department of Social Services[2019] AATA 338, the wording of s 14A(2)(b)(ii) and s 14A(3)(c)(ii) of the Administration Act also requires that the “special circumstances”, once identified, have “prevented” the lodgement of the tax returns within the required time frame. The Tribunal considers this to be an onerous requirement, as it is not enough for a claimant to merely show that the special circumstances made it difficult or challenging for the tax returns to be lodged within the required time frame. 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.
In Afghani and Secretary, Department of Social Services [2017] AATA 410, the AAT was required to consider whether the applicant’s husband had been prevented from lodging his income tax return within the relevant time. The AAT observed (at [61]-[62]) that:
In considering this application for review, I must look at the whole of this particular limb of section 32C(3)(a) of the Administration Act together in its statutory context. The Parliament has enacted this section to allow discretion in a limited field with the phrase that there “...are special circumstances that prevented...” the taxpayer from lodging his or her return before the end of the relevant financial year. There is no definition of the word ‘prevented’ in the Administration Act, so the Tribunal must look at the ordinary dictionary meaning.
The Concise Oxford Dictionary of Current English (5th Edition, 1972 print) defines ‘prevent’ as to “hinder, or stop”. I find that Mr Afghani was not hindered or stopped from lodging his tax return before 30 June 2015 by some special circumstance. He forgot. Forgetfulness is not uncommon, nor out of the ordinary: it is a common human frailty. But it did not amount to special circumstances ‘preventing’ the lodgement of the tax return.
The Respondent noted in its written submissions that an accountant’s failure to lodge income tax returns on time is not considered to be “special”. The Respondent submitted the following case law is of relevance on this point.
In Secretary, Department of Social Services and Elrington [2016] AATA 169, the applicant had provided all required information to his accountants prior to 30 June 2014 in the year following the year in question, and had advised the accountants that the tax return had to be lodged by 30 June for family tax benefit purposes. The tax return was not lodged in that time frame due to the accountants moving from one location to another. In finding that there were no special circumstances that prevented the applicant from lodging his income tax return in time, the AAT held (at [28]) that:
There is no evidence that Mr Elrington had received notice from his accountants asking him to make a declaration that the information in the income tax return was true and correct and that he had authorised the accountants to lodge the approved income tax return. Although it may be made by email or in hard copy, a taxpayer cannot give a blanket declaration but must make a fresh one each time an income tax return is lodged by accountants or a tax agent on his or her behalf. If he had not been asked for a declaration, that should have made him question whether his accountants had lodged his return. Mr Elrington has not said that he contacted his accountants as 30 June 2014 drew near to enquire about whether they had lodged his income tax return. Given the notices he had been given by the Department as to the consequences of his not lodging his income tax return by 30 June 2014, Mr Elrington could, I find, be expected to have contacted his accountants to check whether his income tax return had been lodged. As he did not, I find, there is nothing in Mr Elrington’s circumstances that enable them to be characterised as special circumstances. Therefore, I find that Mr Elrington has not met the reconciliation condition in s 32C(1)(c)(ii) of the FA Administration Act and he is not entitled to the FTB supplement and top up of FTB for the 2012/2013 year of income.
In Nicholson and Secretary, Department of Social Services [2016] AATA 630, the AAT provided the following comments about accountant error (at [54]-[56]):
The law is clear that a taxpayer cannot rely on blaming an accountant for not lodging returns on time or for misplacing documents or for not telling the taxpayer of changes to the law or reminding them to put in the necessary documents and rely on this as unusual, uncommon or exceptional circumstances. Unfortunately these types of issues arise not infrequently.
These are not acts out of the ordinary occurrence (see Secretary, Department of Social Services and Elrington [2016] AATA 169, Dann and Secretary, Department of Social Services [2016] AATA 196, Fedigan and Secretary, Department of Social Services [2016] AATA 211 and Secretary, Department of Social Services and Cannon [2015] AATA 1028). It is also not a defence to a prosecution for late lodgement of tax returns.
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.
In Secretary, Department of Social Services and McNamara [2016] AATA 689, the AAT considered the role of a serious illness of the applicant’s accountant’s wife and its impact on lodgement of the applicant’s income tax return, in addition to other factors raised by the applicant, and commented (at [45]-[48]) that:
Consistent with the decisions of the Tribunal in Cannon, Dann and Field, the Tribunal finds that ignorance of the law is no excuse for Ms McNamara’s failure to comply with the 30 June 2014 deadline and there is no legal obligation on the Department (Centrelink) to advise potential claimants of changes to the law that may affect them. Further, any ignorance that Ms McNamara had of her and her partner’s income tax return lodgement requirements does not constitute “special circumstances”.
Further, the Tribunal finds the fact that Ms McNamara and her partner were caring for a difficult foster child does not constitute “special circumstances” in circumstances where it is clear that they entrusted the lodgement of their 2013 tax returns to their accountant and that accountant has accepted responsibility for the failure to lodge the returns on time.
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.
In Fedigan and Secretary, Department of Social Services [2016] AATA 211, the applicant’s accountant had been provided the relevant documents to lodge the applicant’s income tax return in time, but had not done so due to personal issues for which he was seeking treatment from a psychologist or psychiatrist. The AAT stated (at [31]-[32]) that:
Although Miss Fedigan considers the decision to be unfair, the requirements of the Act apply equally to her and all other recipients of FTB. Indeed, a decision to favour Miss Fedigan could be considered unfair to all others whose benefits have been withheld in accordance with the provisions of the Act. I also see no fairness in other taxpayers bearing the burden of the failure, for whatever reason, of the accountant not lodging the tax returns in time.
Time limitations within the provisions of the legislation are clearly a measure to effectively manage the general administration of the social security system. Over-ruling those time limits without compelling reasons could be considered as unfair to the management of the system.
In Berges and Secretary, Department of Social Services [2020] AATA 3507, the applicant claimed that the following range of circumstances prevented timely lodgement of her and her husband’s income tax returns (set out at [40]):
I am not saying that any one of the above circumstances alone caused us to lodge our 2016 tax returns late. It was the combination of all the issues we had that caused it to happen. It was the combination of first my husband being injured followed up by our dealings with workcover, the subsequent starting of his own business and the increase in my workload while struggling with my health, 3 preschool children, the virus that encrypted all of our data on two computers, and an accountant that did not do what he was supposed to do and my declining health while my husband was trying to start up his fledgling business that caused the issue.
The AAT in Berges, in finding that the circumstances outlined by the applicant were not special circumstances that prevented lodgement of the income tax returns, commented (at [51]-[52]) that:
The Tribunal found that the following elements:
(a) The applicant’s increased paperwork workload relating to her partner’s small business; (b) The workload relating to the applicant and her partner’s seven investment properties;
and
(c) The complexity of the applicant’s and her partner’s tax affairs with a trust, a small
business and a self- managed superannuation fund;
are not relevant considerations as special circumstances in relation to the applicant managing their FTB obligations because they are the normal obligations of any taxpayer who chooses to operate such entities.The length of time taken by an accountant to complete tax returns is not normally treated by social security decision makers as a special circumstance….
As to the impact of the COVID-19 pandemic, the AAT in Engineer and Secretary, Department of Social Services [2023] AATA 948 noted (at [11]-[13]) that:
The Tribunal whilst accepting that it needs to look at each case individually is also guided by the interpretation and application of the words in the subsection 32C(3)(b) of the Act. There is a clear line of decisions that an accountant’s failure to lodge income tax returns on time is not a circumstance that is unusual, uncommon or sufficiently out of the ordinary to constitute special circumstances. It is an obligation on the taxpayer that income tax returns be lodged on time.
It is also clear from previous decisions that an ATO extension does not provide a sufficient special circumstance that prevents the return from being lodged pursuant the requirement under section 32C of the Act. There is a different test involved so far as ATO extensions of time are concerned, compared to the requirement under the Act which requires unusual, uncommon or out of the ordinary circumstances that prevented an Applicant from lodging their income tax return on time. The granting of the extension in this instance did not prevent the Applicant from lodging the tax return on time.
That leaves the consideration of COVID and, as Mr Engineer has quite correctly said, the challenges were very great indeed and he and his wife were under severe financial hardship. But without more, that and the other factors outlined by the Applicant do not take the position away from what all taxpayers, including taxpayers with small businesses, were facing during the COVID epidemic. In particular, the fact that the Applicant was able to engage a new accountant at some time during the period prior to 30 June 2021 means that it could not be said that the Applicant was prevented from lodging the relevant returns. The Tribunal finds that the factors outlined by the Applicant did not prevent the relevant tax returns from being lodged on time.
While the Respondent accepted that the ATO’s reason for granting an extension of time to lodge an income tax return can be relevant to a special circumstances consideration, the ATO requirements are different to the requirements under the family assistance legislation. The granting of a deferral by the ATO has been held to not constitute special circumstances by the AAT (Onody). The Respondent noted, however, that it is unclear whether the Applicant in the present matter was granted an extension by the ATO.
The Respondent submitted that the accountant’s delay due to lockdowns and restrictions were issues ordinarily faced by taxpayers and were not unusual or uncommon and, further, that it was the responsibility of the Applicant to ensure income tax returns were lodged on time. The Respondent submitted that the impact of the pandemic on the Applicant’s ability to lodge income tax returns was not special as there was no evidence she was in a different position to everyone else who was operating a business or who was required to lodge income tax returns during the pandemic. A delay by the accountant in lodging until an invoice was paid was a challenge general in nature and experienced by many taxpayers. The Respondent submitted that any difference between ATO and Centrelink requirements, on its own, does not constitute special circumstances.
The Respondent submitted that, even if the above circumstances were found to constitute special circumstances, none of these factors prevented the Applicant and her partner from lodging their income tax returns on time. The Applicant had received family tax benefit since 2004 and had several options available to ensure the tax returns were lodged before 30 June 2021. The Respondent noted that this approach is consistent with the findings of the AAT in Khadem and Secretary, Department of Social Services [2022] AATA 218 (at [31]-[37]):
Whilst Mrs Kadem has made the case for she and Mr Kadem experiencing a difficult and stressful period, there is a dearth of evidence that indicates they were prevented from submitting their ITRs by the due date. The difficulties that they experienced as a result of the pandemic were no doubt unfortunate and stressful, but it is not clear how the loss of their employment at the beginning of 2020 prevented the lodgement of the ITRs by the due date.
Without seeking to diminish the difficulties that Mrs Khadem and her husband experienced, I am not satisfied that the circumstances prevented the submission of the ITRs. They may have caused delay and made the process of lodgement more onerous in the context of the health and other challenges that were being experienced, but the evidence does not support a conclusion that the circumstances prevented them from meeting a due date which was a full year after the end of the financial year to which they related.
In considering the evidence I am not satisfied that special circumstances existed such that the first part of the requirement is met. The circumstances were unfortunate and doubtless stressful, but they were not unusual or out of the ordinary such that they would be described as special.
Were special circumstances to have existed, the evidence supports a finding that the lodgement of the ITRs competed with other pressing priorities. It does not, however, support a finding that Mrs Khadem and her husband were prevented from lodging the ITRs.
For these reasons, I find that the requirements in sections 32C and 32D of the Administration Act are not met, there are no grounds for extending the deadline for reconciliation and the decision under review will be affirmed.
The Respondent’s representative made oral submissions at the Tribunal hearing that were consistent with the position put in its written submissions.
Findings of the Tribunal
The Tribunal observes at the outset that, given the Applicant did not make herself available to speak to the Tribunal on the day of the scheduled hearing, the assertions she has made in her written submissions were unable to be tested before the Tribunal. In Confidential and Commissioner of Taxation [2013] AATA 112 (at [549]) the AAT stated that:
That aside, the principles established by the courts under s135 of the Evidence Act would seem to be equally applicable to merits review. If evidence is relevant, it should generally be admitted even if it has not been tested by cross-examination. Admission, however, is one thing and the weight to be accorded to evidence another. Matters that may affect the weight that the evidence is given will include the opportunity given to the other party to cross-examine the maker of a statement or to know the matters contended in that evidence and to produce contrary evidence. They will include the inherent consistency and integrity of the evidence, its consistency with and corroboration by evidence from other sources and the interest of its maker in giving the evidence at all. Also relevant will be the purpose for which the evidence is given. So, for example, if the evidence is in the nature of a receipt for money received, it may be evidence that the receipt was given at all and/or evidence that the money was received in the first place. The weight that is given to the document may vary from one instance to the other.
Further, in Estafanous and Minister for Immigration and Multicultural Affairs (Citizenship) [2025] ARTA 8 at [79] the Tribunal stated that:
Nevertheless, I accept the proposition put for the Minister that, generally, little weight should be given to the relevant content of unsworn references or statements given by witnesses who were required but not made available for cross examination, and whose evidence has not been tested. Even though the Tribunal is not a court, and it is not bound by the rules of evidence, it must ensure procedural fairness to each party. It is for this reason the general proposition can be accepted, but it does not follow that the untested character references or statements should be disregarded entirely or given no weight. To the extent they are relevant, they must be considered and given appropriate weight.
The Tribunal also observes that the threshold set out in the legislation sets a particularly high bar for an applicant. The Tribunal must be satisfied not only that there are special circumstances in this matter – that is, circumstances that are unusual and are distinguishable from other family tax benefit recipients – but also that those circumstances prevented the Applicant and her partner from lodging their income tax returns by 30 June 2021.
While the Tribunal is not bound by cases cited by the Respondent, it is mindful that inconsistency “is not merely inelegant: it brings the process of deciding into disrepute, suggesting an arbitrariness which is incompatible with commonly accepted notions of justice” (Re Drake v Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 per Brennan J at [639]). The test set out in the legislation is not insurmountable (as evidenced, for example, in the matter of Secretary, Department of Social Services and Willersdorf [2016] AATA 535, where the AAT found that a range of circumstances faced by the applicant in that matter constituted a “perfect storm” which, when considered in cumulation, established circumstances such that the discretion should be exercised). It has, however, been described as a “stringent” test (Hooker) and one that places an “onerous requirement” on an applicant (Singleton). The case law, taken as a whole, suggests that historically, tribunal decision makers have not accepted that accountant delay or the pandemic environment, without more, are sufficient to meet the threshold set out in the legislation. The Tribunal sees no reason to depart from this approach, given the legislative test it is required to consider.
Turning to the present matter, the Tribunal finds that the Applicant was sent correspondence by Centrelink on 22 March 2021. This correspondence was headed “Family Tax Benefit – you need to confirm your family income for 2019-20” and noted the following, in relevant part:
You need to confirm your family income for the 2019-20 financial year. To do this you and your partner need to lodge your tax returns or you need to tell us you are not required to lodge, by 30 June 2021.
If you and your partner do not do this, you will have to pay back any Family Tax Benefit paid for the 2019-20 financial year. Your fortnightly Family Tax Benefit payments may also stop.
You may get top ups and supplement payments if your family income is confirmed by 30 June 2021.
What you and your partner need to do
Check if a tax return needs to be lodged by going to ato.gov.au
The correspondence then noted that if a tax return was needed, the Applicant was to lodge it with the ATO “or make sure a tax agent does it on your behalf. The ATO will then tell us your income”. If a tax return was not needed, the correspondence set out a range of options for the Applicant to advise of the non-lodgement requirement.
The Applicant’s representative told the Tribunal that the Applicant had received the letter in March 2021, she thinks by post. The Applicant’s representative submitted that the Centrelink letter reminding the Applicant of the 30 June deadline would have been interpreted as “the same as the ATO using the reasonable man test”. The Applicant’s representative submitted that the Applicant would have assumed the letter was reminding her of the “normal submission date”. As discussed with the Applicant’s representative at the hearing, considerations by the Tribunal in this matter do not include a requirement to consider a “reasonable man” test.
In the absence of any evidence to the contrary, the Tribunal finds that the Applicant received and read the letter sent to her by Centrelink in March 2021. The letter clearly set out the requirements to lodge income tax returns by 30 June 2021 and the consequences if the Applicant did not do so. The Tribunal did not accept that any misinterpretation by the Applicant about the letter amounts to a special circumstance that prevented the Applicant and her partner from lodging their income tax returns in time. Nor did the Tribunal accept that any inconsistency between lodgement requirements for ATO purposes compared to Centrelink requirements amounts to a special circumstance that prevented the Applicant and her partner from lodging their income tax returns in time.
The Applicant has raised a range of issues in her written submissions as to why she states she was prevented from lodging her income tax returns by 30 June 2021. The Applicant’s representative attended the hearing on her behalf to make submissions to the Tribunal but did not give sworn evidence at the hearing. The Applicant’s representative referred to the written submissions that had been prepared by the Applicant and reiterated many of the matters from the written submissions at the hearing. The Applicant’s representative also referred to the Applicant’s child now living with her and to the Applicant having been constantly stressed and anxious.
The Applicant has submitted that, due to lockdowns during the COVID-19 pandemic, she had been unable to physically access her accountant’s office, and that her accountant had put electronic arrangements in place that had contributed to delays and difficulties with lodgement of income tax returns. The Applicant has not specified how the accountant’s move to an online system led to delays and caused an inability for the Applicant and her partner to lodge their income tax returns by 30 June 2021. Her evidence at the AAT first review hearing was that the income tax returns were prepared prior to 30 June 2021 and the delay was due to the Applicant being required to pay her accountant before the tax returns were lodged by the accountant. On the evidence before it, the Tribunal did not accept that the accountant’s move to an online system due to the COVID-19 pandemic, or the pandemic itself, is a special circumstance that prevented the Applicant and her partner lodging their income tax returns within time. Given the income tax returns were prepared before the 30 June 2021 deadline, the Tribunal also did not accept that any delays by Australia Post during the pandemic meant the Applicant and her partner were prevented from lodging their income tax returns within time.
The Applicant has asserted in her written submissions that accounting norms were not achievable in the pandemic environment and that accountants were generally falling behind. She provided a media article in support of these submissions. She has not, however, provided information about how such difficulties affected her and her partner personally, or how the pandemic environment specifically caused an inability for her and her partner to lodge their income tax returns by 30 June 2021. Her submissions on this point were unable to be tested in evidence at the hearing and have been given little weight by the Tribunal. As a result, the Tribunal did not accept either factor was a special circumstance that prevented the Applicant and her partner from lodging their income tax returns within time.
The Applicant asserts that the six-day delay in lodging the income tax returns is “not material”. The Tribunal notes that the legislation sets out a deadline for lodgement of income tax returns for the reconciliation of family tax benefit amounts (“top ups”) and that this deadline can only be extended where it is appropriate to exercise a discretion to find special circumstances, and where the Tribunal is satisfied that those circumstances prevented the lodgement of income tax returns. The six-day delay is not such a circumstance.
The Applicant has noted in her submissions that her accountant was not aware about the amount of family tax benefit involved. She has also, in written submissions, specifically asserted that it was not her accountant’s conduct that was the cause of the delay. This was inconsistent with the AAT first review decision which reflected (at paragraph 22) that “the Tribunal was urged to consider the behaviour of the accountant”. The inconsistencies in the Applicant’s assertions were unable to be tested at hearing. On the evidence before it, the Tribunal did not accept that the accountant’s behaviour, or the accountant or the Applicant’s lack of awareness of the amount of family tax benefit involved, amount to special circumstance that prevented the lodgement of the income tax returns.
In her written submissions, the Applicant referred to having been unwell and to her child having been diagnosed with autism spectrum disorder. These factors do not appear to have been raised by the Applicant during the AAT first review proceedings. The Applicant was unable to be questioned at hearing about the relevance of these factors to the delay in lodgement of the income tax returns and there was otherwise no medical or other evidence about these matters. The Tribunal placed no weight on assertions made by the Applicant in her written submissions about her health and her child’s diagnosis.
For the reasons set out above, the Tribunal did not consider that any of the factors raised by the Applicant prevented the Applicant and her partner from lodging their income tax returns by 30 June 2021. While the pandemic environment may have led to different methods of communication between the Applicant and her accountant, the income tax returns were finalised prior to 30 June 2021. The evidence presented for the AAT first review matter suggests that the further delay past 30 June 2021 was due to the Applicant’s delay in paying the associated fee to her accountant and to the accountant’s failure or refusal to lodge the income tax returns prior to the payment being made.
Even when the matters raised by the Applicant are considered cumulatively, the Tribunal did not accept that there were special circumstances that prevented the Applicant and her partner from lodging their income tax returns by 30 June 2021. The Applicant did not meet the reconciliation conditions for the 2019/20 financial year on the basis that she and her partner did not meet the required time frames set out in sections 32C and 32D of the Family Assistance Administration Act. In consequence, the Tribunal finds that it was correct to refuse to pay top-ups of family tax benefit to the Applicant for the 2019/20 financial year and the decision under review is affirmed.
DECISION
The Tribunal affirms the decision under review.
Date of hearing: 1 July 2025 Representative for the Applicant: Mrs KK Solicitors for the Respondent: Ms Jacky Vetter
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