Editors --- "Debts: whether applicant received or obtained the benefit of the payments" [2008] SocSecRpr 43; (2008) 10(4) Social Security Reporter, Article 9

• SEGRAN and SECRETARY TO THE DEEWR and SECRETARY TO THE DFHCSIA
• Background
• The issues
• Discussion
• Formal decision

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Debts: whether applicant received or obtained the benefit of the payments

SEGRAN and SECRETARY TO THE DEEWR and SECRETARY TO THE DFHCSIA

(2008/799)

Decided: 9th September 2008 by S. E. Frost

Background

Over a period of time, Segran was paid parenting payment and family tax benefit. Due to the level of her former husband’s income during the relevant period, Centrelink determined that she had not been entitled to those payments. Centrelink determined that she owed debts to the Commonwealth which should be recovered.

The issues

The issues before the AAT were:

whether Segran had a parenting payment debt and, in particular, whether Segran received the benefit of the parenting payments; and

whether Segran had a family tax benefit and, in particular, whether Segran received the family tax benefit payments.

Discussion

In relation to the parenting payment debt, Centrelink started paying parenting payment to Segran in response to a claim for payment made in Segran’s name and dated 27 April 2004. Segran did not make the claim and was unaware that the claim had been made. The most likely explanation was that her then husband, either by himself or with the assistance of others, arranged for the completion and lodgement of the form.

The parenting payments were paid into a Westpac bank account that Segran held jointly with her then husband. The unchallenged evidence of Segran was that her former husband controlled access to the account and refused her access to the account without his permission. She was required to account for money accessed.

The AAT found that whilst the parenting payments were paid into an account Segran held jointly with her husband, she had not obtained the benefit of the payments. The AAT found that she had not lodged the claim for parenting payment and, given the control her husband exercised over the account, she could not have known that the parenting payments were being paid into the account.

The AAT concluded that the use of the expression (in s.1223(1) of the Social Security Act 1991 (the Act)) ‘a person who obtains the benefit of the payment’ rather than simply ‘a person who obtains the payment’ suggests a requirement that the person is in some way advantaged -better off, or in an improved state - by the fact of the payment. The AAT found that, in this case, the person who obtained the benefit of the parenting payments was Segran’s then husband.

As Segran did not obtain the benefit of the parenting payments, the AAT concluded that she did not owe a parenting payment debt to the Commonwealth as the requirements of s.1223 of the Act were not satisfied.

In relation to the family tax benefit debt, Segran had been in receipt of family tax benefit payments for some time. In February 2004, her husband lodged a ‘Request for income details (2003-2004income (financial) year) Family Tax Benefit/Child CareBenefit’ form with Centrelink. It would appear his income was under-declared to Centrelink.

Further, between 6 March 2004 and 26June 2005 (apparent from two short return visits), Segran was outside Australia. She stated that she notified Centrelink prior to her departure from Australia, but there was no record of her having made such a notification.

The AAT found that, in order for a person to owe a family tax benefit debt, s.71 of the A New Tax System (Family Assistance) (Administration) Act 1999requires the person to have been paid the benefit.

The AAT concluded that, although the payments of family tax benefit were made in accordance with Segran’s wishes (into the joint Westpac account), Segran had been compelled by her then husband to make that direction to Centrelink. The AAT concluded that one of the consequences of this was that Segran’s then husband was able to intercept payments and apply them to his own purposes.

The AAT found that, in a practical sense, the family tax benefits were never actually paid to her. It considered that the then husband’s practice of denying Segran access to the joint bank account, although not known to Centrelink, interrupted the expected flow of the benefit from Centrelink to Segran. The AAT had no doubt that one of the desired outcomes of the set of circumstances that the husband had created was that he would be the one enriched by the amount of the payments, whilst Segran would be the one primarily exposed to Centrelink in the event of an overpayment.

The AAT considered this to be an extreme case in which Segran’s husband preyed on his vulnerable wife and concluded that, even if the family tax benefit had been overpaid, Segran did not owe a debt to the Commonwealth as she was not paid the benefits.

Formal decision

The AAT set aside the decision under review and substituted a decision that Segran did not owe a parenting payment or a family tax benefit debt.

[S.O.]