Editors --- "Parenting payment and family tax benefit debts; special circumstances waiver; whether notional entitlement is excluded as a relevant circumstance" [2009] SocSecRpr 10; (2009) 11(1) Social Security Reporter, Article 10

• OBERHARDT v SECRETARY TO THE DEEWR
• Background
• The issues
• Notional entitlement
• Adequacy of the AAT’s Reasons
• Formal decision

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Parenting payment and family tax benefit debts; special circumstances waiver; whether notional entitlement is excluded as a relevant circumstance

OBERHARDT v SECRETARY TO THE DEEWR

(Federal Court of Australia)

Decided: 17th September 2008 by Spender J.

Background

Oberhardt was in receipt of parenting payment and family tax benefit on the basis that she was caring for her son when, in the new year holiday period of 2004/5, her son visited his father in accordance with a Family Court order. The father should have returned the son on 11 February 2005, but failed to do so. On 19 April 2005, the father informed Centrelink that he now had the greater share of care for his son.

On 7 June 2005, Oberhardt informed Centrelink of the change in care arrangements. Centrelink thereupon ceased the payment of parenting payment and family tax benefit to her. On the same day, Oberhardt applied for and was granted disability support pension.

On 27 July 2005, Centrelink made a decision to raise and recover parenting payment and family tax benefit debts from Oberhardt. She challenged these decisions and, on 1 August2006, the SSAT affirmed the decision to raise and recover the family tax debt, but decided to waive the recovery of the parenting payment debt.

Oberhardt applied to the AAT for a review of the SSAT’s decision regarding the family tax benefit debt; and the Secretary to the DEEWR applied to the AAT for a review of the decision to waive the parenting payment debt. The applications for review were heard together and, on 1 February 2008, the AAT set aside the decision to waive the parenting payment debt, and affirmed the decision in relation to the family tax benefit debt.

Oberhardt appealed the AAT’s decision to the Federal Court of Australia.

The issues

The issues for determination by the Court were:

a) whether the concept of “notional entitlement” is a relevant consideration in deciding whether or not special circumstances exist within s.1237AAD of the Social Security Act 1991 (the Act) and

b) whether the AAT’s reasons were sufficient to discharge its obligations under s.43 of the Administrative Appeals Tribunal Act 1975 (the AAT Act).

Notional entitlement

The Court noted that the relevance of notional entitlement in deciding whether to waive a debt had not been definitively considered by the Court or the Federal Magistrates Court. After carefully reviewing the AAT cases which had considered this issue, the Court concluded that:

1. The wording of s.1237AAD is broad and does not, financial hardship alone aside, impose a fetter on the matters which may be considered by a decision-maker; and

2. The terms of s.1273AAC (which provides for circumstances where the Secretary must waive the right to recover a debt where the debtor or their partner would have been entitled to certain allowances) do not mandate that notional entitlement cannot be considered as a relevant consideration when considering “special circumstances” ins.1237AAD. The Court concluded that there is nothing in s.1237AAD to suggest that the limitations in s.1237AAC apply in circumstances other than specifically enumerated in s.1237AAC, and to do so would by implication impermissibly fetter the broadly expressed discretion ins.1237AAD.

The Court held that notional entitlement should not be excluded from the range of available relevant considerations in deciding whether there are ‘special circumstances’ to waive a debt under s.1237AAD and, in doing so, the AAT had misdirected itself.

The Court further held that the AAT in this case did not appear to have considered notional entitlement as one of a range of factors applicable to Oberhardt that could, together, amount to special circumstances.

Although the Court was not required to consider whether “notional entitlement” might be a relevant factor for consideration of waiver in special circumstances under section 101of the A New Tax System (Family Assistance) (Administration) Act 1999,the Court queried the correctness of a concession that the notional entitlement can only be to a benefit available under the same Act that the overpaid benefit was paid under.

Adequacy of the AAT’s Reasons

The Court was very critical of the clumsy and pretentious language used in the AAT’s decision and the contradictory expressions of its reasons. The Court concluded that it was simply not possible to understand what the AAT had found, and the reasons for those findings.

The Court held that the AAT’s reasons and conclusions did not inform the parties and the public, in any meaningful way, of the manner in which the decision was arrived at; and, simply put, did not ‘disclose its findings of fact, the evidence on which they were based and the logical process by which it moved from those findings to the result in the case’. The Court was therefore satisfied that the reasons provided by the AAT were not sufficient to discharge its obligation under s.43 of the AAT Act.

Formal decision

The Court set aside the AAT’s decision and remitted the matter to the AAT for reconsideration according to law.

[S.O.]