Editors --- "Family tax benefit and child care benefit debts: special circumstances waiver" [2009] SocSecRpr 9; (2009) 11(1) Social Security Reporter, Article 9

• WILSON and SECRETARY TO THE DEEWR AND SECRETARY TO THE DFHCSIA
• Facts
• Waiver provisions
• Special circumstances waiver
• Formal decision

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Family tax benefit and child care benefit debts: special circumstances waiver

WILSON and SECRETARY TO THE DEEWR AND SECRETARY TO THE DFHCSIA

(2009/35)

Decided: 19th January 2008 by N. Bell

Facts

Wilson was overpaid family tax benefit (FTB) and child care benefit (CCB) in respect of the 2006/07 financial year on the basis of estimates she had provided of her and her husband’s income for that year. The estimates did not include her husband’s net rental property loss in relation to two investment properties he held a part interest in. This was due to incorrect advice that had been given on the Family Assistance Office (FAO) website and during a telephone conversation with a FAO officer.

The facts were not in dispute. Nor was the amount of the overpayment disputed or that it constituted a debt owed to the Commonwealth. However, Wilson argued that the debt should not be recovered.

Waiver provisions

The Tribunal identified the three bases on which recovery of the debts may be foregone:

Write off (section 95 of the A New Tax System (Family Assistance) (Administration) Act 1999 (FA Admin Act));

Waiver due to sole administrative error (section 97,FA Admin Act); or

Waiver due to special circumstances (section 101, FA Admin Act)

The Tribunal noted that there was no dispute that write off of the debt was not available as Wilson had the capacity to repay the debt by instalments. The Tribunal also found that whilst there was no dispute that the debt was attributable solely to administrative error, again the further requirement that Wilson would suffer severe financial hardship if the debt was not waived could not be met.

The remaining issue was whether there were special circumstances that made it desirable to waive Wilson’s debt.

Special circumstances waiver

The Tribunal examined the waiver provisions in section101 of the FA Admin Act. The Tribunal noted that whilst the Wilson was not in difficult financial circumstances, following the decision in Secretary, Department of Social Security v Hales [1997] FCA 1565; (1998) 82 FCR 154, there was no bar to a finding of special circumstances were another special situation to be found.

In the absence of evidence of any other circumstances which could amount to special, the Tribunal explored the issue of whether administrative error should be included in a consideration of special circumstances.

In so doing, the Tribunal identified the competing considerations as:

that a person who is not eligible to receive a benefit should not receive it and the public pursue should be protected;

that because administrative error waiver is dealt with specifically, with certain conditions, in section 97 of the FA Admin Act it could be argued that section covers the field; and

that a government agency should not be giving incorrect advice to persons who rely on the agency for guidance.

Following the decision in White and Secretary, Department of Family and Community Services [2004] AATA 13,the Tribunal decided that whilst the structure of the FA Admin Act suggested that waiver due to administrative error should be considered as distinct from waiver due to special circumstances, it did not preclude a finding of special circumstances based on error where the error is of some unusual magnitude. At paragraph 17 of the decision, the AAT opined that ‘effective, efficient and fair administration is not promoted if an agency is protected from the consequences of its erroneous advice by reliance on a construction of the legislation it administers.’

The Tribunal decided that the special circumstance waiver provision should be applied because the website error was of some unusual magnitude given the potential for many thousands of people to be detrimentally affected.

Formal decision

The AAT set aside the decision under review and instead decided that the debt owed by Wilson to the Commonwealth should be waived.

[G.B.]