Munda and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 699 (14 September 2010)

Last Updated: 15 September 2010

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 699

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2010/1831

GENERAL ADMINISTRATIVE DIVISION		)
	Re		Franco Munda

Applicant

And

Secretary, Department of Families, Housing, Community Services and indigenous Affairs

Respondent

DECISION

Tribunal

Senior Member A K Britton

Date 14 September 2010

Place Sydney

Decision

1. That part of the decision under review in relation to the period pre-6 June 2006 is set aside and remitted to the Secretary for reconsideration in accordance with the recommendations made in these Reasons for Decision. 2. The remainder of the decision under review is affirmed.

.....................[SGD].................
Senior Member

CATCHWORDS

SOCIAL SECURITY - Family Tax Benefit – restriction on backdating of claims – notice of decisions

A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) – ss 109E, 224

REASONS FOR DECISION

14 September 2010

Senior Member A K Britton

1. Mr Franco Munda applies for review of a decision made by the respondent Secretary and affirmed by the Social Security Appeals Tribunal not to back-date the payment of Family Tax Benefit (FTB) beyond 1 July 2008.
2. Mr Munda has two children whose care is shared with his former partner. He is accordingly entitled to receive FTB. FTB is calculated in accordance with a statutory formula, central to which is the concept of the “percentage of care” provided by the FTB recipient to any child.
3. Between July 2005 and December 2009, Mr Munda’s FTB payments were calculated on the assumption that his percentage of care was 22%. In October 2009, he advised Centrelink that his percentage of care throughout that period was in fact 31%, resulting in an underpayment.
4. On review, Centrelink accepted that Mr Munda’s percentage of care had been 31% — consistent with the terms of court orders lodged by him in September 2005. Accordingly, payments to Mr Munda based on the higher percentage of care were backdated to 1 July 2008. Centrelink decided that payments could not be backdated beyond that date because the A New Tax System (Family Assistance) (Administration) Act 1999 (the Administration Act) effectively barred the making of any earlier payments.
5. Whether an amended rate of payment of FTB instalments to Mr Munda can be backdated beyond 1 July 2008 turns on the following issues:

(i) Did Centrelink properly notify Mr Munda of the decision or decisions to calculate his FTB payments on a 22% percentage of care?
(ii) If so, when was Mr Munda notified?
(iii) What is the correct date from which any varied payment can be made?

WAS MR MUNDA PROPERLY NOTIFIED OF THE SUBJECT DECISIONS?

6. During the period mid-2005 to October 2009, Centrelink made seven decisions about Mr Munda’s FTB payments. As different issues arise in relation to the first of those decisions, I will deal with it separately.

(i) The first decision

7. On 12 August 2005, Centrelink gave Mr Munda written notice of his FTB rate, advising that it was based on the assumption that his percentage of care for both children was 22%. Mr Munda rang Centrelink the following month to query that calculation. A Centrelink officer subsequently considered his request, and advised that the rate had been correctly calculated.
8. As properly conceded by Centrelink, Mr Munda’s actions in querying his rate of FTB constituted an application for review of the decision made on 12 August 2005.

(ii) Subsequent decisions

9. On 6 June 2006, Centrelink wrote to Mr Munda and advised that his FTB rate was again based on the assumption that his percentage of care was 22%. Mr Munda was also advised that he had a right to have that decision reviewed under the Administration Act and was provided with various details about the review process. Centrelink wrote to Mr Munda in similar terms on 23 June 2006, 19 June 2007, 19 July 2007, 16 August 2007 and 30 August 2007.
10. All letters were sent to an address provided by Mr Munda to Centrelink in Mt Annan, NSW. Mr Munda testified that he had moved from that address on 13 May 2006 and did not receive any of these letters. I accept these claims.
11. Where a notice of a decision of a person’s entitlement to FTB is sent by prepaid post to the address of the person last known to the Secretary, notice of the decision is taken to have been given to the person: s 224(1) of the Administration Act. Notice may be given to a person by properly addressing, prepaying and posting the document as a letter: s 224(2). If notice of a decision is given in accordance with sub-section (2), notice of the decision is taken to have been given to the person at the time at which the notice would be delivered in the ordinary course of the post, unless the contrary is proved: s 224(3).
12. Mr Munda concedes that he did not notify the Secretary of his change of address. The Mt Annan address accordingly constitutes the address last known to the Secretary, throughout the period 6 June 2006 to 30 August 2007. Mr Munda is therefore taken to have been notified of all FTB decisions made throughout that period, notwithstanding that he did not “receive” — in the commonly understood sense of the word — any of the notices: s 224 of the Administration Act.

CAN FTB PAYMENTS BE BACKDATED FOR THE PERIOD 6 JUNE 2006 TO 1 JULY 2008?

13. Apart from the first decision Mr Munda did not apply for review of any of the subject decisions until October 2009.
14. Section 109D of the Administration Act provides that an application for review of a FTB decision must be made within 52 weeks of the person being notified of the decision. It is plain that the application for review made by Mr Munda in October 2009 was out of time in respect of all subject decisions other than the first.
15. Section 109D(2) gives the Administrative Appeals Tribunal, acting as substitute decision maker, a discretionary power to extend the time an application for review can be made providing it is satisfied that there are special circumstances that prevented Mr Munda from making an application for review within 52 weeks. While I accept that Mr Munda did not in fact receive notice of the decision, I do not accept that he was prevented from seeking review because of special circumstances. The genesis of the problem was Mr Munda’s failure to notify the Secretary of his change of address. In my opinion, this does not constitute special circumstances.
16. Under s 109E of the Administration Act, where an application for review is made out of time, and a decision is made on review to vary that decision, the effective date of the new decision will be:

(e) unless paragraph (f) applies — the date that would give full effect to the review decision; or
(f) if the date referred to in paragraph (e) is earlier than the first day of the income year before the income year in which the application was made — that first day.

17. As noted, on review the Secretary decided to vary the earlier decisions and to calculate Mr Munda’s FTB payments based on a higher percentage of care. The date that would give full effect to that decision is arguably July 2005. However, as that predates the first day of the income year before the income year in which Mr Munda’s application for review was made — 1 July 2008 — by the operation of s 109E of the Administration Act the effective date of the decision to vary Mr Munda’s FTB rate is, as the Secretary determined, 1 July 2008.

CAN FTB PAYMENTS BE BACKDATED BEYOND 1 JULY 2008?

18. As Mr Munda sought review of the first decision within 52 weeks, the restrictions imposed by s 109E of the Administration Act concerning the date of effect of does not apply.
19. Accordingly it is open to the Tribunal to vary that part of the decision that relates to the period pre-6 June 2006. However, for the reasons set out above, it is not open to the Tribunal to vary the rate for the period 6 June 2006 to 30 June 2008.

SHOULD MR MUNDA’S FTB RATE TO 6 OCTOBER 2006 BE VARIED?

20. Before addressing this issue, it is necessary to consider the position of Mr Munda’s former partner, who will be affected by any decision to increase Mr Munda’s FTB rate. Centrelink advises that if Mr Munda’s rate is increased the former partner may be required to repay some FTB payments.
21. In its reasons for decision the SSAT noted that Mr Munda’s former partner had declined the invitation to be joined to those proceedings and did not attend the hearing (Munda and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs (Unreported, Presiding Member Barker and Member Timbs, 29 April 2010) at [15]). Nor did she attend the case conference or hearing listed before the AAT. At the request of the Registrar on 9 July 2010, Centrelink wrote to the former partner and advised that her interests might be affected by the AAT decision, and asked whether she wished to be joined as a party. She did not respond. On 30 August 2010 — the day before the substantive hearing — an officer of the Tribunal contacted the former partner by telephone. She indicated that she was satisfied with the SSAT decision and did not wish to participate in the proceedings before the AAT.
22. It is plain that the former partner is a person whose interests will be affected by any decision made about Mr Munda’s FTB rate for the period before 6 June 2006. I am satisfied that she was notified of these proceedings but not that she appreciates the implications of the decision to proceed to review Mr Munda’s FTB rate paid for the period pre-6 June 2006. My preliminary view based on the material before me that Mr Munda’s percentage of care for the period 1 July 2005 to 5 June 2006, is 31%. That is consistent with the terms of the Family Court orders and Mr Munda’s claim for FTB lodged on 16 June 2005.
23. In my opinion, the interests of fairness demand that before any final decision is made to vary Mr Munda’s rate for that period, the former partner must be put squarely on notice. For that reason, I have decided to remit the decision in relation to the period up to 5 June 2006 to the respondent secretary for reconsideration. I recommend that before any final decision is made, the former partner be notified in writing and given an opportunity to comment.

ORDERS

24. That part of the decision under review in relation to the period pre-6 June 2006 is set aside and remitted to the Secretary for reconsideration in accordance with the recommendations made in these Reasons for Decision.
25. The remainder of the decision under review is affirmed.
    

I certify that the 25 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member A K Britton.

Signed: ..................................[SGD]....................................

Associate to Senior Member Britton

Date of Hearing: 1 September 2010

Date of Decision: 14 September 2010

The Applicant appeared in person.

Solicitor for the Respondent: Centrelink Legal Services