Editors --- "Family tax bene?t debt: waiver; administrative error and special circumstances" [2010] SocSecRpr 26; (2010) 12(2) Social Security Reporter, Article 12

• SECRETARY TO THE DFHCSIA and HODGE
• Background
• Administrative error
• Special circumstances
• Formal decision

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Family tax benefit debt: waiver; administrative error and special circumstances

SECRETARY TO THE DFHCSIA and HODGE

(2010/360)

Decided: 17th May 2010 by S. Webb

Background

The applicant received a past periodfamily tax benefit payment in the 2007-2008 year without taking into account a shared care arrangement. As a result a debt was raised.

On review, the SSAT varied the debt and waived it on the grounds of administrative error.

On further review to the AAT, the amount of the debt was not disputed, the issue was whether the debt should be waived.

Administrative error

Hodge argued that the debt arose only because of Centrelink’s error and that she received the money in good faith.

The AAT did not accept this. The member found that Hodge’s overpayment was attributable substantially but not solely to administrative errors of the Commonwealth. The AAT accepted that Hodge provided information concerning her changed care arrangements in respect of the children to the FAO, albeit in the context of a child care claim made in May 2008. The AAT found that information was not acted upon by the Commonwealth, in error. Nevertheless, the effect of that error was remediable by information Hodge was required to provide concerning her percentages of care in respect of her children in her lump sum family tax benefit claim in July 2008. However, Hodge omitted to provide this information on the advice of her tax agent. As the debt did not arise solely from Centrelink’s error, administrative error waiver did not apply.

Special circumstances

The Department argued that these circumstances were not ‘unusual, uncommon or exceptional’ and that Hodge was not in financial hardship.

The AAT did not agree.

First, the member accepted that theapplicant did not ‘knowingly’ make false statements or breach the Act.

Second, the member found that the Department's errors were not commonplace and that it was not necessary for errors to be ‘unique to the individual’ for them to amount to special circumstances.

Also the errors created an unfairness and special circumstances waiver should not be barred simply because the administrative error provisions did not apply.

The AAT found that in all the circumstances, including the fact that Hodge chose the past payment method to avoid the risk of overpayment, the case demonstrated special circumstances.

In concluding the member stated:

I am satisfied that the Commonwealth’s errors in Ms Hodge’s case are special circumstances that make it desirable to waive her debt. The fact that her debt is attributable in part to her own error, albeit an innocent error, must also be considered. Considering the relative significance of these errors I am satisfied that the errors of the Commonwealth are of substantially greater significance, in that they are productive of unfairness, which if left unrectified would equate to injustice that stands contrary to the intention of the waiver provisions. (Reasons, para. 19)

Formal decision

Accordingly, the AAT affirmed the decision under review, albeit for different reasons.

[R.P.]