Kerferd and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 389 (18 May 2010)

Last Updated: 27 May 2010

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 389

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2009/6018

GENERAL ADMINISTRATIVE DIVISION		)
	Re		DAVID KERFERD

Applicant

And

SECRETARY. DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal

G. D. Friedman, Senior Member

Date 18 May 2010

Place Melbourne

Decision

The Tribunal affirms the decision under review.

...............[signed]...........
Senior Member

ADMINISTRATIVE

APPEALS TRIBUNAL

MR G. D. FRIEDMAN, Senior Member

No. 2009/6018

KERFERD

and

SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

EXTRACT OF TRANSCRIPT OF PROCEEDINGS

MELBOURNE

TUESDAY, 18 MAY 2010

MR D. KERFERD appears in person

MR D. PERDON appears for the respondent

EXTRACT OF TRANSCRIPT OF PROCEEDINGS

MR FRIEDMAN: The matter before the Tribunal is a decision made by Centrelink on 15 September 2009 to raise and recover a family tax benefit debt of $8,232.90 for the period 1 July 2007 to 30 June 2008. On 10 November 2009 the Social Security Appeals Tribunal affirmed the decision that Mr Kerferd has a family tax benefit debt in that amount and that the debt should not be written off or waived. The issues before me are whether, firstly, there is a debt for overpayment of family tax benefit and, if so, the amount of debt and, secondly, if there is a debt, whether the debt should be written off or waived. There is no dispute that Mr Kerferd and his wife have children and that he has an ongoing eligibility for family tax benefit subject to provision of bank account details.

Mr Kerferd said that he was not entitled to family tax benefit in the period in question – that is, 2007 and 2008 – because the benefit had previously been cancelled and that the letter sent to him, on 16 September 2008, by Mr Keith Stephens, business manager of Centrelink, in which Mr Stephens advised about payment of family tax benefit for the years 2004/2005, 2005/2006, 2006/2007 and an interim calculation for 2007/2008 based on an income estimate was that that letter really was sent in error because, in fact, Mr Kerferd, in fact, had no entitlement to family tax benefit. It is clear that Mr Kerferd has a difficult relationship with Centrelink and that he feels that Centrelink has not done the right thing by him over a number of years. The situation has arisen where Centrelink has not permitted Mr Kerferd to make direct contact with Centrelink officers, as I understand it, except by written communication.

Mr Kerferd conceded that, although he may have received a number of letters from Centrelink advising him of the amount of income upon which it was basing his entitlement to family tax benefit, he said that he did not respond to a number of those letters, including advising of any change in income. He did not advise of bank details and had, in fact, closed a number of bank accounts until 20 May 2008 when he telephoned Centrelink and updated his combined 2007/2008 estimate which had been $26,150 and that was used by Centrelink from 1 July 2007 and was the basis of several letters to Mr Kerferd saying that that amount, $26,150, was the amount they were using unless he advised them otherwise.

On 15 May 2008, Centrelink sent him a notice saying it was proposing to maintain an indexed estimate of combined taxable income for 2007/2008 in the assessment of his family tax benefit rate from 5 June 2008. The proposed combined indexed estimate was $39,607 which represented the combined 2006/2007 taxable income of himself and his wife that had been reported to the Tax Office and was increased in line with average weekly earnings. He was sent a further letter saying that, If your income changes, you need to notify Centrelink. It is on that basis that on 20 May 2008 he telephoned Centrelink and advised that his 2007/2008 income would be $35,000, the combined income. On that basis from 20 May 2008 the assessment of his rate of family tax benefit was based on his combined estimate of $35,000.

Mr Kerferd agreed that on 20 May 2008 he contacted the Brisbane office of Centrelink, by telephone, regarding the review of entitlement for family assistance and he provided updated income which was: taxable income $19,000 for himself and $16,000 for his wife, giving the total of $35,000. On 29 September 2008, the letter to which I have already referred, Centrelink paid a sum which it said was for 2007/2008 family tax benefit to a bank account which had been nominated by him. That payment was not returned to Centrelink by the bank, which had happened on previous occasions. That payment comprised $11,934.66 which was a net amount for family tax benefit for 2007/2008 based on the income estimates and $90 which was withheld in recovering but unrelated debt, giving a total of $12,024.66.

On 18 May 2009 the Tax Office advised Centrelink that Mr Kerferd’s taxable income in 2007/2008 was $39,368 and on 1 June 2009 the Tax Office advised Centrelink that the taxable income of Mr Kerferd’s partner, for that year, was $34,834 which means the combined taxable income in 2007/2008 was $74,203, a figure that has not been disputed by Mr Kerferd in evidence before me today. Following receipt of that information, Centrelink calculated the actual 2007/2008 family tax benefit, based on a combined taxable income of $74,203, was $3,791.76 and that he, in fact, had received an amount of $12,024.66 in respect of 2007/2008, and after a reconciliation the amount of $8,232.90 was the difference between the amount received and the entitlement, and he was advised in writing and that decision, made and affirmed by an authorised review officer, was subsequently upheld by the Social Security Appeals Tribunal.

Mr Kerferd has argued today that because his family tax benefit was cancelled, he said in June 2005 by Centrelink, he was not entitled to any payment of family tax benefit for 2007/2008. When asked why he kept the money and did not return it, he said that he believed it was, in part, compensation for, basically, the way he had been treated by Centrelink and for various errors that Centrelink had made regarding family tax benefit, and other matters, and that was money that Mr Kerferd believed he was entitled to. When asked whether this was part of a formal compensation agreement by Centrelink under the CDDA, or the claim for compensation for defective administration, he said, No, it was not a formal agreement and that Centrelink had never admitted that they had done anything wrong.

It was really Mr Kerferd saying, Look, I have received the money; even though I am not entitled to it I am going to keep it because Centrelink owes me compensation and I am considering this to be part of compensation. I do not accept the argument by Mr Kerferd. If I were to accept that argument that would mean that any person who was aggrieved by Centrelink or any government agency would be able to just say, Well, you have done me wrong; I am going to keep the money and you owe me some more, and that clearly cannot be the case. If there was a formal claim that was accepted by Centrelink then I would accept that argument but for the reasons I have just given, I do not accept that the money was validly kept as part of any compensation agreement or any valid claim.

I have no idea, and no way of knowing, whether any compensation was payable, but for Mr Kerferd to take it upon himself to keep the money as compensation, I do not accept that he had any legal right to do so. He may feel, and I am sure he does feel, that he has a moral right to it but I can only go by what the law is in regard to compensation. In my view, he had no valid claim to that money as compensation. In respect of Mr Kerferd’s claim that he had no entitlement to family tax benefit from 2005 because it was cancelled, I do not accept that argument. Mr Kerferd has not demonstrated, to my satisfaction, that in sending the letter dated 16 September 2008, enclosing or telling him that he was receiving money for family tax benefit for a number of years including 2007/2008, I am not persuaded that Centrelink was acting outside the law.

When invited to do so today, Mr Kerferd was not able to point to anything that satisfies me that Centrelink was acting unlawfully in making payment of family tax benefit for the period 2007/2008. I am also satisfied, on the material before me, that Mr Kerferd had ample opportunity to tell Centrelink of changes in his or his wife’s income, that he failed to do that and it was only when a reconciliation was made with the Australian Tax Office records that the revised taxable income amount was noted by Centrelink and was applied to the entitlement for family tax benefit. For those reasons, I am satisfied that the reconciliation amount – that is, the difference between the entitlement to family tax benefit for 2007/2008 and the amount received by Mr Kerferd for that year was $8,232.90 and, accordingly, I am satisfied that that represents a debt to the Commonwealth under the family tax legislation.

The next question for me to decide is whether the amount should be written off. The provisions of s 95 of the Administration Act [A New Tax System (Family Assistance) (Administration) Act 1999] provide that if a debt is recoverable at law, it should not be written off. There is no evidence before me that the debt is irrecoverable at law; in fact, withholdings are being made and there is no evidence of bankruptcy or an incapacity to pay the debt, and there is no evidence that writing off the debt is decidable on the grounds that to not do so would cause severe financial hardship. For those reasons, I am not going to write off the debt.

The final consideration is whether the debt should be waived under s 97 of the Administration Act. Section 97 allows the waiver of a debt which is solely attributable to administrative error, was received in good faith and the person would suffer severe financial hardship if it were not waived.

For the reasons that I have already outlined in terms of the validity of the payment of the family tax benefit for 2007/2008, I find that there was no error by Centrelink in calculating that amount or raising the debt so, on that basis, I find that the debt was not solely attributable to administrative error and, therefore, it cannot be written off under s 97. Even if that were not the case and it were later to be found that the payment of family tax benefit for 2007/2008 was not paid lawfully by Centrelink to Mr Kerferd, it is clear from his evidence today that he received the money, he decided to keep the money, he knew that he was not entitled to the money because his argument was that the family tax benefit had been cancelled, and I have already decided that his action in claiming the money to be part of compensation was not appropriate.

For those reasons, I find that he did not receive the money in good faith, so that, even if there was any error attributable to Centrelink then s 97 is not satisfied and waiver of the debt is not appropriate, and for those reasons there is no need for me to consider whether he would suffer financial hardship if it were not waived but I do note that he said today that his income is around $75,000 per year, and Mr Perdon pointed out to the Tribunal that if he and his wife were solely on social security benefits, their income would about $21,000 so he would not satisfy that part of the provision even if it was relevant to my decision.

Finally, s 101 of the Administration Act provides for a waiver of a debt where there are special circumstances other than financial hardship alone, which make it desirable to waive the debt.

The waiver of a debt for special circumstances has been considered in a number of decisions: Re Davy [[2007] AATA 1114] before this Tribunal, Re Angelakos [(2007) [2007] FCA 25; 100 ALD 9] and Re Beadle [(1985) [1984] AATA 176; 7 ALD 670] in the Federal Court. Those decisions, basically, provide that the special circumstances, which is not defined in the Act, applies to circumstances which are unusual, exceptional or uncommon, that make it desirable to waive. When invited to provide reasons why this provision should be applied in his case, Mr Kerferd did not really have much to say to the Tribunal but it appears that when he was before the Social Security Appeals Tribunal he said that the way he had been treated by Centrelink was, basically, a reason why any debt should be waived.

In my view, having found that in this occasion that the debt was appropriately calculated and imposed by Centrelink, I do not have any information before me that would suggest that any dealings with Centrelink would come within the provision of special circumstances and having considered the evidence before me today, there is nothing in anything that Mr Kerferd has said that would encourage me to apply the special circumstances waiver to this particular case so under s 101 of the Administration Act I find that there are no special circumstances that apply to Mr Kerferd’s case.

For all those reasons, I am going to affirm the decision of the Social Security Appeals Tribunal.

END OF EXTRACT