Perillo; Secretary, Department of Family and Community Services a nd [2003] AATA 1039 (26 September 2003)

Last Updated: 17 October 2003

DECISION AND REASONS FOR DECISION [2003] AATA 1039

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N2003/694

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

Applicant

And

MARY ANN PERILLO

Respondent

DECISION

Tribunal

Ms N Bell, Member

Date 26 September 2003

Place Sydney

Decision

For the reasons given orally at the conclusion of this hearing, the Tribunal sets aside the reviewable decision made by the Social Security Appeals Tribunal dated 27 March 2003 and substitutes therefor a decision that the debt owed by the Respondent to the Commonwealth should be recovered.

N Bell

Member

CATCHWORDS

SOCIAL SECURITY - family tax benefit reconciliation over payment debt - waiver - difficulty in estimating income

LEGISLATION

Social Security Act 1991 - s 97, 101

REASONS FOR DECISION

26 September 2003

Ms N Bell, Member

1. At the conclusion of the hearing of the above matter the terms of the decision intended to be made and the reasons therefor were stated orally.

2. The oral reasons for decision have been transcribed by Auscript, the Commonwealth Reporting Service.

3. The said transcript is annexed hereunto and furnished to the Applicant and to the Respondent as it is the reasons for the Tribunal's decision.

I certify that this and the preceding pages are a true copy of the decision and reasons for decision herein of:

Ms N Bell, Member

Signed:

.........................................................................................................................

Associate

Date of Hearing 26 September 2003

Date of Decision 26 September 2003

For Applicant Mr J Kenny, advocate

For Respondent Mr M Perillo

DRAFT JUDGMENT

ADMINISTRATIVE APPEALS TRIBUNAL

Matter No N03/694

By MS N.P. BELL, Member

SECRETARY, DEPARTMENT OF

FAMILY AND COMMUNITY SERVICES

v PERILLO

SYDNEY, FRIDAY, 26 SEPTEMBER 2003

MS BELL: The issue for the Tribunal to consider in this application was purely whether a debt of over payment of Family Tax Benefit should be recovered. The debt arose out of Mr and Mrs Perillo giving estimates of income under the Family Tax Benefit system and there is no dispute that Mr and Mrs Perillo gave regular updates to Centrelink in relation to their income. There is also no dispute that it was very difficult for both Mr and Mrs Perillo to accurately estimate their income because of the nature of their work and particularly the nature of Mrs Perillo's work.

One ground on which a debt may be waived is under section 97 of the A New Tax System (Family Assistance) (Administration) Act 1999 ("the Act") which allows waiver where a debt is attributable solely to the Commonwealth's administrative error. That cannot be the case here because there is no dispute that Mr and Mrs Perillo did under estimate their income because of the difficulties associated with accurately estimating. Consequently it was inevitable under the present system that an over payment would be made, regardless of any act or omission of the Commonwealth..

Another ground of waiver is where, pursuant to s101 of the Act, the Tribunal is satisfied that there are, among other things, special circumstances that make it desirable to waive the debt.

In this regard I accept Mr Perillo's evidence that he and his wife had great difficulty in accurately estimating their income. I accept his evidence that Mrs Perillo suffers from ulcerative colitis which causes her pain and for that reason she has not worked since December 2002. Her condition has settled somewhat and today she was able to attend her child's school as a volunteer but it is a condition that continues, as I understand his evidence.

I also accept Mr Perillo's evidence that he and Mrs Perillo own outright a property at Huskisson purchased in 1991 for $107,000 and that that property has a caveat on the title in respect of Mr Pirello's brother who has a psychiatric condition. I also accept that Mr Pirello, for a range of reasons, has no intention of selling the property in the near future. I accept his evidence that the proceeds of any sale would be divided between Mr Pirello and his brother and some $15,000 would be repaid to Mr Pirello's parents.

I accept Mr Pirello's evidence that he and his wife purchased their home in 1997 for $240,000 and currently owe some $49,000 on their original mortgage of $85,000. The four bedroom house is as yet unfinished, requiring most importantly an equipped kitchen and an en-suite bathroom and some other features of the house need to be addressed as well. They currently pay $1400 per month in mortgage payments which is $600 in excess of the minimum payment required.

I accept Mr Pirello's evidence that he owes some $20,000 to relatives who are skilled tradesmen and contributed their services to the renovation of his house. These debts are the subject of handshake agreements and he is not required to discharge them at any set time.

In Mrs Pirello's dealing with Centrelink she received advice in September 2001 to over estimate her income by some $2000 and this coincided with her having begun a three month contract for work under which she would earn some $3000.

Mrs Pirello then obtained further work unexpectedly after that time and increased her estimate accordingly. However, up until that time she had been paid according to her earlier estimates and was consequently over paid. I find no error in the payment of Mrs Pirello on that basis and although the system of Family Tax Benefit Payments is a source of confusion to many people I can find no evidence of misleading advice to Mrs Pirello by Centrelink officers.

My final finding is that Mr Pirello remains in employment.

I have had regard to a number of decisions of the Full Federal Court and of the Tribunal as to what constitutes special circumstances within the meaning of the Act. In particular I have had regard to the decision of the Full Federal Court in Riddell v Secretary, Department of Social Security ((1993) 42 FCR 443) and of the Tribunal in Re Beadle v Director General of Social Security ((1984) 6 ALD 1) and Re Ivovich v Director General of Social Services ((1981) 3 ALN N95).

While Mr and Mrs Pirello's circumstances may be difficult, they have substantial assets. Mrs Pirello's health appears to not currently incapacitate her to the same extent as it did although the future is uncertain. The financial pressures on them appear to be substantially less than those facing the vast majority of people who have dealings with the social security system. I find that their dealings with Centrelink gave rise to no more confusion than is usually faced by those who benefit from the Family Tax Benefit System and in particular I find no evidence of advice from Centrelink that promoted an underestimate or contributed to an over payment. For these reasons I conclude that Mr and Mrs Pirello's circumstances are not unusual, exceptional or uncommon and are therefore not special within the meaning of the Act. I consider that the debt should be recovered.

For those reasons I set aside the decision under review and substitute therefor a decision that the debt should be recovered.