Editors --- "Family Tax Benefit: reasonable maintenance action" [2008] SocSecRpr 26; (2008) 10(2) Social Security Reporter, Article 8

• DAWE and SECRETARY TO THE DFHCSIA
• Background
• Legislation
• Consideration
• Decision

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Family Tax Benefit: reasonable maintenance action

DAWE and SECRETARY TO THE DFHCSIA

(2008/111)

Decided: 13th February 2008 by S.M. Kelly

Background

Dawe was paid parenting payment single and maximum rate family tax benefit from the date of separation from her former husband. She advised the Department at the outset that she had not claimed maintenance. However, three years later, the respondent determined that this should have been done and raised a debt for the whole period. It was common ground that the family tax benefit debt was due to administrative oversight. Dawe was not aware of the potential negative effect on her payments of not taking reasonable maintenance action.

Legislation

Section 58 of A New Tax System (Family Assistance) Act 1999 (the Act) refers to the rate calculator in Schedule 1 which stipulates that a person will receive only the base rate of FTB where there is a right to claim maintenance in respect of a child, and the person does not take that action in circumstances where the Secretary considers it reasonable to do so.

The Tribunal considered the A New Tax System (Family Assistance) (Administration) Act 1999 (the Administration Act) s.97, which provides for waiver under certain conditions and s.101, the special circumstances waiver provision.

Consideration

Dawe contended that the Act could not operate retrospectively in a situation where the payment recipient had no notice of the requirement to take maintenance action. However, the Tribunal found there was no requirement that notice be given to a payment recipient to take maintenance action prior to a decision to raise a debt.

That was not the end of the matter though, as the Tribunal followed the steps in Schedule 1, clause 10 of the Act requiring the decision maker to consider, whether there was an entitlement to claim, and then whether it was reasonable for the individual to act to secure that entitlement.

At para. 25, the Tribunal posed the question for itself:

However, do I think it was reasonable for Ms Dawe to take action to obtain maintenance during any part of the debt period when she was not told of and did not know of the consequence for the FTB payment if she did not, and when Centrelink knew that she was not taking any action but did not tell her she should have done so? (Reasons, para. 25)

The Tribunal determined the applicant’s inaction regarding maintenance was in fact reasonable in circumstances where the Department had, with knowledge that no action was taken or requested by it, paid family tax benefit at the higher rate.

Accepting it was not necessary for the decision, the Tribunal went on to consider waiver. It made findings that Dawe’s situation did not meet the criteria for establishing severe financial hardship such that the waiver discretion in section 97 of the Administration Act was enlivened. However, the Tribunal found the circumstance of the Department paying Dawe family tax benefit at the higher rate while at the same time being aware, on information provided by her, that no action was being taken, did constitute special circumstances.

Decision

As Dawe’s actions were reasonable, she was entitled to receive the monies and no debt arose on the facts.

[J.S.]