Editors --- "Family tax bene?t debt: special circumstances waiver; knowingly" [2012] SocSecRpr 1; (2012) 14(1) Social Security Reporter, Article 1

• WILSON and SECRETARY TO THE DFHCSIA
• Background
• The issue
• The law
• Discussion
• Formal decision

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Family tax benefit debt: special circumstances waiver; knowingly

WILSON and SECRETARY TO THE DFHCSIA

(2012/890)

Decided: 15th December 2011 by N. Bell

Background

Wilson was, from December 2001 until November 2007, in receipt of family tax benefit (FTB) in respect of her son, though in December 2001 he was taken from her care and thereafter she cared for him only on occasional weeknights and school holidays. Wilson did not dispute that she had received various letters from Centrelink advising her of the need to advise of changes in her situation, nor that as a result an overpayment had occurred. She argued that the debt should not have to be repaid, but rather should be waived.

The issue

The issue for the Tribunal to consider was whether an overpayment of FTB should be repaid, or waived. This required the Tribunal to consider whether Wilson had knowingly failed or omitted to comply with a provision of the social security law, and whether special circumstances could be said to exist.

The law

The A New Tax System (Family Assistance) (Administration) Act 1999provides by s.101 that recovery of the whole or part of a debt may be waived where -

i) the debt did not result wholly or in part from a person knowingly making a false statement or false representation or failing or omitting to comply with a provision of the family assistance law; and

ii) there are special circumstances (other than financial hardship alone) that make it desirable to waive the debt.

Discussion

The Tribunal first considered whether Wilson had knowingly failed to comply with her obligation to notify Centrelink of changes in her situation. The Tribunal noted extensive evidence from Wilson herself, from her current treating psychiatrist and a former psychiatrist, a psychologist, and other representatives of financial advice and housing services, all of whom described the crisis situation Wilson was in during December 2001 (when her son was removed from her care) and thereafter for several years. The Tribunal noted and accepted that her history was marked by psychiatric and cognitive difficulties, by periods of in-patient care for alcohol abuse and mental illness, by an abusive relationship with her child’s father, by various court disputes, and by disputes with Centrelink and the Office of Housing.

The extensive evidence of Wilson’s treating psychiatrist was that throughout the period in question she became ‘... anxious, extremely emotive, incapable of getting along with or trusting people and [was] very “scattered” in her decision making,’ especially in 2001 when she was not being treated with antidepressant medication, as she later was. Her psychiatrist stated that Wilson was incapable, because of her conditions, of acting on clear advice because of ‘..her anxious preoccupation with ...her day to day survival’ and that her conditions and responses to stressors meant that she had a diminished capacity to lead an independent life.

The Tribunal noted that Wilson did not dispute receiving letters from Centrelink after FTB began to be paid to her, but accepted that she did not read the letters in full, but simply filed them. Although she had approached Centrelink to enquire about aspects of her payments over the years, she did not advise of the care arrangements regarding her son. Wilson’s psychiatrist gave evidence that her conditions meant that she became easily overwhelmed by matters, and found it difficult to order her thoughts or comprehend her obligations, or to address matters she perceived as peripheral to her focus at the time – and thus that details in a Centrelink letter would not ‘sink in’. This assessment was supported by other evidence presented to the Tribunal.

The Tribunal considered whether Wilson had ‘knowingly’ failed to comply with her obligation to inform Centrelink of her son’s care arrangements. The Tribunal noted that ‘knowingly failing’ required a conscious, deliberate failure to comply with a provision of the legislation, although this could include recklessness (Saunders and Secretary, Department of Family and Community Services [1999] AATA 952; (1999) 57 ALD 495), and that in Secretary, Department of Social Security and Bitunjac (1998) 52 ALD 674 an applicant whose children had been placed in state care was found not to have knowingly failed to comply. Having regard to the extensive expert and lay evidence of Wilson’s psychiatric and cognitive conditions, and the crises she was facing, the Tribunal concluded that she did not have ‘knowledge’ of her obligations to Centrelink, and that there was no evidence of a conscious and deliberate failure to act nor of any reckless abstention from inquiry (R v Glennan (1970) 91 WN (NSW) 690). Wilson therefore did not knowingly fail to comply with her obligations to Centrelink.

Having regard to Wilson’s situation and her long history of psychiatric and cognitive difficulties, the Tribunal concluded that her circumstances went beyond the ordinary, common or unusual, and were therefore to be considered as special, and so the Centrelink debt should be waived.

Formal decision

The Tribunal set aside the decision and determined that recovery of the debt should be waived.

[P.A.S.]