Reynolds and Secretary, Department of Family and Community Servic es [2003] AATA 829 (26 August 2003)

Last Updated: 9 September 2003

DECISION AND REASONS FOR DECISION [2003] AATA 829

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N2002/645

GENERAL ADMINISTRATIVE DIVISION	)
	Re	MOIRA REYNOLDS

Applicant

And

SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES

Respondent

DECISION

Tribunal

Dr J D Campbell, Member

Date 26 August 2003

Place Sydney

Decision

The decision under review is affirmed.

[SGD] Dr J D Campbell

Member

CATCHWORDS

SOCIAL SECURITY - family assistance - overpayment - administrative error - severe financial hardship - special circumstances

LEGISLATION

Family Assistance Administration Act 1999, ss 71, 91, 97, 101 and 102

Family Assistance Tolerance (Transition) Determination 2001

CASE LAW

Re Beadle and Director General of Social Security (1984) 6 ALD 1

REASONS FOR DECISION

26 August 2003

Dr J D Campbell, Member

1. In this application Mrs Reynolds ("the Applicant") seeks a review of the decision of the Social Security Appeals Tribunal ("SSAT") dated 17 April 2002, which affirms the decision of an authorised review officer dated 26 February 2002. This latter decision had varied an earlier decision of a delegate of the Secretary, Department of Family and Community Services ("the Respondent") dated 28 August 2001 to raise and recover a debt of Family Tax Benefit ("FTB") of $2808.70 by application of the tolerance waiver of $1000, resulting in a debt to be recovered from the Applicant of $1808.70.

2. A hearing was held before the Tribunal on 18 July 2003 at which the self-represented Applicant presented oral evidence. The Respondent was represented by Ms Schuster, an advocate from the Centrelink Recovery Team.

3. The following material was placed into evidence before the Tribunal:

Exhibit No	Description	Date
T1-25 pp1-65	Documents prepared pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 ("the T documents")
R1	Respondent's Statement of Facts and Contentions	6 August 2002

ISSUES

4. The relevant issues in this matter are:

(a) whether a debt to the Commonwealth in the amount of $1769.70 was correctly raised in respect of FTB paid during the period 1 July 2000 to 30 June 2001;

(b) whether the Applicant would suffer severe financial hardship as a consequence of repaying the debt; and

(c) whether the Applicant's particular circumstances can be considered special circumstances that make it desirable to waive the debt.

LEGISLATION

5. The relevant legislation is the Family Assistance (Administration) Act 1999 ("the Act") and in particular sections 71, 96, 97, 101 and 102.

BACKGROUND

6. On 29 August 2001 the Applicant wrote to the recovering officer, Ms Prince, detailing family tax payments for her daughter Jessica. In this letter (T15) the Applicant states the following:

* On 22 June 2001 she received a letter from the Family Assistance Office outlining benefits for the 2000-2001 payment period.

* On 15 September 2000 the Applicant rang the Respondent (reference number 5368) to inquire as to whether Jessica, a year 11 student, would still be entitled to payment as she had a part-time job. The Applicant told the Respondent that she was not sure how much Jessica would earn in the relevant financial year. The Applicant was advised that as Jessica was still in high school, she would be entitled to the FTB and that the Applicant did not have to worry about her income.

* On 23 June 2001 the Applicant received a letter from the Family Assistance Office detailing payments for Jessica for the coming financial year.

* On 17 July 2001 the Applicant notified the Respondent that Jessica's group certificate recorded earnings of $9039 for the previous financial year. The Applicant was informed that she would be further advised on the issue of repayment.

* On 22 August 2001 the Applicant was requested to supply a copy of Jessica's group certificate, which she did on 28 August 2001 by way of fax.

7. On 28 August 2001 the Respondent determined that the Applicant had received an excess payment of $2829 of Family Tax Benefit for the period 1 July 2000 to 5 July 2001 and that a debt of this amount was to be raised and recovered from the Applicant. The waiver option was considered but was deemed inappropriate (T10).

8. On 11 September 2001 the Respondent reviewed the earlier decision and again concluded that the decision was correct. The Respondent also advised that the overpayment amount would be reduced by $1000, once the legislation passed, pursuant to the waiver provision (T16).

9. On 26 February 2002, the authorised review officer confirmed the earlier decision, but reduced the amount owing to $1808.70 having applied a tolerance waiver of $1000 pursuant to section 102 of the Act, the debt being for the period 1 July 2000 to 5 July 2001 (T22).

10. On 17 April 2002 the SSAT affirmed the decision of the authorised review officer to raise and recover a Family Tax Benefit debt of $1808.70 for the period 1 July 2000 to 5 July 2001 (T2).

11. In the Respondent's Statement of Facts and Contentions ("Exhibit R1), the Respondent concedes that there was an error in the calculation of the debt of $39, in that the debt period should end on 30 June 2001, not 5 July 2001. Accordingly the quantum of debt owing is $1769.70, a tolerance waiver of $1000 pursuant to section 102 of the Act having been applied, with the debt being for the period 1 July 2000 to 30 June 2001.

APPLICANT'S EVIDENCE

12. The Applicant described to the Tribunal her history of receiving family allowance from 1995, with her receiving such allowance for her two daughters from 1996. In July 2000, the Applicant received FTB for Jessica, and because of her concerns she called Centrelink on 15 September 2000. The Applicant again stated the details as she had recorded in her letter to Centrelink on 29 August 2001 (T15).

13. The Applicant stated that she continued to receive FTB for Jessica until the end of the financial year 2000/01, and when the group certificate for Jessica was received she rang Centrelink and later sent them a copy of the group certificate.

14. The Applicant acknowledges that she was overpaid FTB, but in so doing she had relied upon the advice of Centrelink, particularly the phone call on 15 September 2000. The Applicant considered that if she had been properly advised during the call on 15 September 2000, she would have cancelled and waited until the end of the financial year to claim.

15. In evidence as to her financial circumstances, the Applicant stated that she was employed as a schoolteacher, earning some $58,000 per annum. The Applicant stated that she owned a three bedroom home with an approximate value of $250,000 and that she had an outstanding mortgage of $75,000. Other assets included a private super fund (contribution $147 per fortnight), 1400 shares in AMP, $2000 in the bank and two cars (1991 Pulsar and 1989 Gemini).

16. The Applicant stated that apart from the mortgage, she had no debts and that she was of a mindset that believed in balancing the budget. The Applicant stated that her yearly income of approximately $60,000 (salary, share dividend, daughters contribution) managed to cover her expenditure on mortgage, insurance, health fund, private super contributions, medication, bills, tax and household expenditure with a minimal surplus remaining.

17. The Applicant stated that her younger daughter was currently travelling and that her older daughter was repaying a HECS debt. The Applicant stated that she suffered form a connective tissue disorder and a hiatus hernia.

SUBMISSIONS

18. The Applicant acknowledges that she was overpaid, but this was solely due to the wrong advice given to her during the phone call on 15 September 2000. The Applicant stressed to the Tribunal that it was not within her nature to spend money she did not have, and that she valued financial certainty. The Applicant stated that she had relied upon the advice given. She stated that if the correct advice had been given, she would have cancelled the FTB at that time and waited until the end of the financial year to assess her position for such benefit, once the gross earnings of her daughter had been established.

19. The Respondent, in acknowledging that the Applicant made a phone call on 15 September 2000, and that there is no question of the Applicant's credibility, concedes that the Applicant was incorrectly advised regarding the impact Jessica's income would have on her entitlement to FTB. The Respondent concedes that this portion of the debt is attributable solely to administrative error.

20. In relation to the period prior to the phone call of 15 September 2000, the Respondent contends that this portion is not attributable to any administrative error. The reason being that the Applicant had been advised on 22 June 2000 that the income earned by Jessica must be less than $7663 for the financial year for the Applicant to receive FTB.

21. The Respondent, in conceding that on and after 15 September 2000 the Applicant received such FTB in good faith, contends that the Applicant would not suffer severe financial hardship if the debt were to be repaid and that there are no special circumstances adduced in the matter. Accordingly the Respondent maintains that there are no grounds for waiver in this matter.

CONSIDERATION AND FINDINGS

22. The particular facts in this matter are not in dispute. The Tribunal acknowledges the concessions made by the Respondent and the frankness demonstrated by the Applicant in the presentation of her evidence and her position.

23. In terms of the factual circumstances the Tribunal finds that:

* the Applicant was advised on 22 June 2000 that the income earned by Jessica must be less than $7663 for the financial year 2000/01, if the Applicant was to receive a FTB for Jessica for that period;

* the Applicant did make inquiries of the Respondent on 15 September 2000 and it has been conceded by the Respondent that the Applicant was wrongly advised by the Respondent on issues relating to Jessica and the entitlement arising therefor to FTB;

* the group certificate for Jessica indicates that she earned $9039 for the financial year 2000/01 (T11);

* as a consequence of the amount earned by Jessica the Applicant was not entitled to FTB for the year 2000/01, which resulted in an overpayment of $2869.70 for the period 1 July 2000 to 30 June 2001;

* as a consequence of section 102 of the Act and the Family Assistance Tolerance (Transition) Determination 2001 the tolerance waiver of $1000 has been applied, resulting in a debt outstanding and owed by the Applicant of $1769.70.

24. The Tribunal notes the following statutory framework, which is relevant in determining whether a further waiver of the debt should occur:

"71 Debts arising in respect of family assistance other than child care benefit and family tax benefit advance.

No entitlement to amount

71(1) If:

(a) an amount has been paid to a person by way of family tax benefit, maternity allowance or maternity immunisation allowance (the assistance) in respect of a period or event; and

(b) the person was not entitled to the assistance in respect of that period or event;

the amount so paid is a debt due to the Commonwealth by the person.

...

97 Waiver of debt arising from error

97(1) The Secretary must waive the right to recover the proportion (the administrative error proportion) of a debt that is attributable solely to an administrative error made by the Commonwealth if subsection (2) or (3) applies to that proportion of the debt.

97(2) The Secretary must waive the administrative error proportion of a debt if:

(a) the debtor received in good faith the payment or payments that gave rise to the administrative error proportion of the debt; and

(b) the person would suffer severe financial hardship if it were not waived.

97(3) The Secretary must waive the administrative error proportion of a debt if:

(a) the payment or payments were made in respect of the debtor's eligibility for family assistance for a period or event (the eligibility period or event) that occurs in an income year; and

(b) the debt is raised after the end of:

(i) the debtor's next income year after the one in which the eligibility period or event occurs; or

(ii) the period of 13 weeks starting on the day on which the payment that gave rise to the debt was made;

whichever ends last; and

(c) the debtor received in good faith the payment or payments that gave rise to the administrative error proportion of the debt.

...

101 Waiver in special circumstances

The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:

(a) the debt did not result wholly or partly from the debtor or another person knowingly:

(i) making a false statement or a false representation; or

(ii) failing or omitting to comply with a provision of the family assistance law; and

(b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and

(c) it is more appropriate to waive than to write off the debt or part of the debt."

25. In addressing section 97 of the Act the Tribunal notes that the circumstances in this matter should be considered in the light of subsections 97(1) and (2). The Tribunal has concluded that the advice rendered to the Applicant on 15 September 2000 was incorrect and constituted an administrative error with any debt arising thereafter being solely due to this error. For the period up to 15 September 2000, the incorrect advice and hence administrative error did not apply, as the Applicant had been correctly advised of the applicable taxable income limits that Jessica could earn and FTB payable for the financial year 2000/01.

26. In noting that subsection 97(2) of the Act requires the Applicant to have received in good faith the payments that give rise to the administrative error proportion of the debt and that the Applicant would suffer severe financial hardship if it were not waived, the Tribunal concludes:

(a) that the evidence before the Tribunal is that the Applicant did receive the payments arising from the administrative error proportion of the debt in good faith, as she relied upon the advice given and had no personal knowledge that the payments were being made other than correctly;

(b) that the evidence pertaining to the Applicant's financial circumstances clearly portrays an individual who manages the financial resources of the household in a disciplined and thoughtful manner. An examination of both financial capital and annual operating expenses of the Applicant by the Tribunal demonstrate that while the Applicant will have to make budget corrections, if the debt is to be paid and not waived, it is clear to the Tribunal that failure to waive will not create severe financial hardship for the Applicant.

27. In summary the Tribunal concludes that waiver of the debt pursuant to section 97 of the Act is not appropriate in this case.

28. In addressing section 101 of the Act, the Tribunal notes the subsection 101(a)(i) is not in contention between the parties, as there is no issue of the Applicant knowingly making false statements or a false representation. Nor is there any contention that the Applicant failed or omitted to comply with provision of the family assistance law.

29. With regard to subsection 101(b), the Tribunal, in acknowledging that the term "special circumstances" has been subject to much examination by both Courts and Tribunals, notes the explanation of the term by Toohey J in Re Beadle and Director General of Social Security (1984) 6 ALD 1:

"...An expression such as "special circumstances" is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional...This is not to say that the circumstances must be unique, but they must have a particular quality of unusualness that permits them to be described as special."

30. The Tribunal in examining the circumstance outlined in this matter concludes that there is nothing unusual, uncommon or exceptional in this matter that would allow the Tribunal to find that special circumstances exist.

31. Accordingly the Tribunal concludes that waiver of the debt pursuant to section 101 of the Act is not appropriate in this case.

DETERMINATION

32. The Tribunal affirms the decision under review.

I certify that the 32 preceding paragraphs are a true copy of the reasons for the decision herein of Dr J D Campbell, Member

Signed: A. Krilis

Associate

Date/s of Hearing 18 July 2003

Date of Decision 26 August 2003

Applicant Self-Represented

Solicitor for the Respondent Ms H Schuster