Beaton and Secretary to the Department of Family and Community Se rvices [2003] AATA 809 (8 August 2003)

Last Updated: 17 October 2003

DECISION AND REASONS FOR DECISION [2003] AATA 809

ADMINISTRATIVE APPEALS TRIBUNAL Nº V2003/359

GENERAL ADMINISTRATIVE DIVISION

Re: FIONA CHRISTINE BEATON

Applicant

And: SECRETARY TO THE

DEPARTMENT OF FAMILY AND

COMMUNITY SERVICES

Respondent

DECISION

Tribunal: G.D. Friedman, Member

Date: 8 August 2003

Place: Melbourne

Decision: For reasons given orally at the hearing, the Tribunal affirms the decision under review.

(sgd) G.D. Friedman

MemberSOCIAL SECURITY - family tax benefit - eligibility for payment of arrears - lodgment of tax return after due date

A New Tax System (Family Assistance) (Administration) Act 1999 s28(1), 28(3)

REASONS FOR DECISION

8 August 2003 G.D. Friedman, Member

1. This is an application by Fiona Christine Beaton (the applicant) for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 24 February 2003. The SSAT affirmed a decision of an authorised review officer of Centrelink dated 6 November 2002 to refuse payment of arrears of family tax benefit because the applicant's husband failed to lodge a tax return for 2000/2001 by the due date.

2. At the hearing on 8 August 2003 Ms K. Treyvaud, a director of Pile Partners Pty Ltd, Accountants and Business Advisers, represented the applicant and Ms R. Bradley, a Centrelink advocate, represented the Secretary to the Department of Family and Community Services (the respondent).

3. The Tribunal received into evidence the documents lodged under s37 of the Administrative Appeals Tribunal Act 1975 (T1-T15).

BACKGROUND

4. In 2000/2001 the applicant received family tax benefit, paid by instalments, in respect of her three children. The amounts were calculated on the basis of estimates of income provided by the applicant for herself and her husband. On 3 May 2002 Centrelink sent a letter to the applicant informing her that payment of any arrears of family tax benefit could be made only if she and her husband lodged tax returns for 2000/2001 by 30 June 2002. On 7 June 2002 Centrelink sent a similar letter. The applicant was not required to lodge a tax return for 2000/2001. Her husband lodged his tax return on 5 July 2002.

5. On 12 October 2002 Centrelink informed the applicant that on the basis of a comparison between estimated and actual income for 2000/2001, her entitlement to family tax benefit was $4,718.61 ($10,614.82 less $5,896.21 already received). However, she was not eligible to receive this amount because her husband's 2000/2001 tax return was lodged after 30 June 2002. On 6 November 2002 an authorised review officer affirmed the decision.

6. On 31 December 2002 the applicant sought review by the SSAT. Following the decision by the SSAT, the applicant lodged an application with the Tribunal on 7 April 2003.

EVIDENCE

7. In documents available to the Tribunal the applicant said that the she was aware from the letters of 3 May 2002 and 7 June 2002 that her husband's 2000/2001 tax return had to be lodged by 30 June 2002. She stated that she brought the matter to the attention of her accountant, who told her that her husband's tax return could not be submitted until his employer provided information on his earnings, because her husband had not received payslips or a statement of earnings for 2000/2001. The applicant stated that her husband's tax return was eventually lodged on 5 July 2002.

CONSIDERATION OF THE ISSUES

8. Section 28 of the A New Tax System Family Assistance (Administration) Act 1999 (the Act) provides:

28.(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 1936 of the taxable income for the cancellation income year of everyone to whom subparagraph (iii) applies.

28.(2) If this 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.

28.(3) If:

(a) after the Secretary varies the determination under subsection (2), an assessment is made under the Income Tax Assessment Act 1936 for the cancellation income year for everyone:

(i) who was required to lodge an income tax return as mentioned in subparagraph (1)(b)(iii); and

(ii) in respect of whom an assessment had not been made before the determination was varied; and

(b) the Secretary is satisfied that the claimant was eligible for an amount of family tax benefit for the cancellation days;

the Secretary must again vary the determination so that it has the effect that, for the cancellation days, the claimant is entitled to be paid the lesser of:

(c) that amount of family tax benefit; and

(d) the amount that the claimant was entitled to be paid before the variation under subsection (2) was made.

9. Ms Treyvaud informed the Tribunal that previously there had been no requirement that recipients of family tax benefit lodge tax returns by a specific date to receive arrears, and that Centrelink had not publicised the change sufficiently. She said that she only became aware of the change when a client drew the matter to her attention, and she believed that Centrelink had similar provisions to the Australian Taxation Office regarding late lodgment. She stated that she made every effort to comply with the time limit, but was unable to do so because the applicant's husband's employer had not provided adequate information despite numerous requests by the applicant and her husband. Ms Treyvaud said that she could not prepare and lodge an incomplete or inaccurate tax return on behalf of the applicant merely to comply with the time limit.

10. Ms Treyvaud submitted that in the circumstances the applicant was entitled to the arrears, she needed the money and should not be penalised for any failure to comply with the legislation beyond her control. Ms Treyvaud added that some of the arrears as calculated as family tax benefit Part B could be paid to her.

11. In reaching its decision the Tribunal takes into account the oral and written evidence and submissions made at the hearing.

12. There was no dispute that the calculations by Centrelink of the estimated and actual entitlements to family tax benefit were correct. The Tribunal finds that in 2000/2001 the applicant's adjusted taxable income was $5,203 and her husband's adjusted taxable income was $19,192. On the basis of the combined and individual family income the applicant would have been entitled to family tax benefit of $10,614.82, and as the amount paid to her by instalment was $5,896.21, the potential "top-up" amounted to $4,718.61.

13. Section 28(1) of the Act applies in this case because the applicant has received family tax benefit and she, or her husband, was required to lodge a tax return for 2000/2001. Her husband had not done so by 30 June 2002. Under s28(3) of the Act the applicant was eligible to receive the lesser of (a) the amount of family tax benefit received or (b) the amount she was entitled to receive. The Tribunal finds that the lesser amount is $5,896.21, being the amount she received, so the applicant is not entitled to the "top-up" of $4,718.61. There is no discretion in the Act for payment of the"top-up", and there is no persuasive material to convince the Tribunal that any arrears under Part B should be split from the other amounts and paid to the applicant.

DECISION

14. For reasons given orally at the hearing, the Tribunal affirms the decision under review.

I certify that the fourteen [14] preceding paragraphs are a true copy of the reasons for the decision of:

G.D.Friedman, Member

(sgd) Catherine Thomas

Clerk

Date of hearing: 8 August 2003

Date of decision: 8 August 2003

Advocate for applicant: Ms K. Treyvaud

Advocate for respondent: Ms R. Bradley, Centrelink