Badge and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2009] AATA 911
•26 November 2009
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2009] AATA 911
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/2817
GENERAL ADMINISTRATIVE DIVISION ) Re JILLIAN BETH BADGE Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Senior Member R W Dunne Date26 November 2009
PlaceAdelaide
Decision The Tribunal sets aside the decision under review and substitutes a decision that the applicant is entitled to receive arrears of Family Tax Benefit in respect of her daughter, Jillian, for the period from 22 May 2002 to 21 June 2006.
..............................................
R W DUNNE
(Senior Member)
CATCHWORDS
SOCIAL SECURITY – pensions, benefits and allowances – Family Tax Benefit – payment of maximum rate of Family Tax Benefit – failure to lodge Application for Child Support Assessment form – reduction of Family Tax Benefit to the base rate – claim lodged with Child Support Agency and maximum rate of Family Tax Benefit paid – claim for arrears of Family Tax Benefit refused – whether reasonable for applicant to take action to obtain maintenance – decision set aside
A New Tax System (Family Assistance) Act 1999 ss 21(1), 58(1), Schedule 1, clause 10
A New Tax System (Family Assistance) (Administration) Act 1999 ss 32(1) and (2), 109A(1), 109D(1), (2) and (6), 109E(1) and (2), 224Acts Interpretation Act 1901 s 29(1)
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Re McAdam and Secretary, Department of Family and Community Services [2004] AATA 148
REASONS FOR DECISION
26 November 2009 Senior Member R W Dunne introduction
1. The applicant, Jillian Badge, has nine children. Five are children of her first marriage and four are children of her second marriage to Mr Joseph Badge. On 11 April 2002, Mrs Badge lodged a claim for Family Tax Benefit (“FTB”) in respect of her daughter, Jillian, who was born on 13 March 2002. She was paid the maximum rate of FTB for Jillian for the period from 11 April 2002 to 21 May 2002. On 22 May 2002, her rate of FTB was reduced to the base rate because she had not lodged an Application for Child Support Assessment form (“Assessment Form”) with the respondent (“Centrelink”). She subsequently became aware that she needed to claim child support for Jillian to obtain more FTB for her and she lodged a claim with the Child Support Agency. Centrelink commenced paying Mrs Badge the maximum rate of FTB for Jillian from 22 June 2006, but refused to pay her any arrears. At Mrs Badge’s request, the decision was reviewed and affirmed by an Authorised Review Officer and the Social Security Appeals Tribunal (“SSAT”). Mrs Badge has applied to this Tribunal for review of the decision of the SSAT.
2. At the hearing, Mrs Badge represented herself and Centrelink was represented by Ms Laura Giaretto (from Centrelink Legal Services and Procurement Branch). The Tribunal received into evidence the T documents (Exhibit R1) lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 and, at Ms Giaretto’s request, the respondent’s statement of facts, issues and contentions with attachments (Exhibit R2).
issue for the Tribunal
3. The issue for the Tribunal’s consideration is whether the applicant is entitled to receive arrears of FTB in respect of her daughter, Jillian, for the period from 22 May 2002 to 21 June 2006.
legislation
4. The payment of FTB is provided for by the A New Tax System (Family Assistance) Act 1999 (“Family Assistance Act”). An individual’s entitlement to FTB is governed by s 21(1) of the Family Assistance Act, which requires the individual to have at least one FTB child and the individual to be an Australian resident. Section 21(1) reads:
“21 When an individual is eligible for family tax benefit in normal circumstances
(1) An individual is eligible for family tax benefit if:
(a) the individual:
(i) has at least one FTB child; or
(ii)is not an absent overseas recipient and has at least one regular care child who is also a rent assistance child; and
(b) the individual:
(i) is an Australian resident; or
(ia) is a special category visa holder residing in Australia; or
(ii) satisfies subsection (1A); and
(c) the individual’s rate of family tax benefit, worked out under Division 1 of Part 4, is greater than nil.”
5. Section 58(1) of the Family Assistance Act provides that the rate of FTB payable to a person is to be calculated in accordance with the Rate Calculator in Schedule 1 of the Family Assistance Act. Division 1 of Schedule 1 deals with the calculation of the rate of one component of FTB, namely the Part A payment. The amount of the Part A payment is to be determined in accordance with an assessment that is made of the amount of child support that the parent of a child is entitled to receive. However, clause 10 of the Schedule provides that the amount of FTB paid in respect of a child shall be the “base” rate if the person does not take reasonable steps to claim maintenance on behalf of the child. Clause 10 of the Schedule reads:
“10 Effect of maintenance rights
The FTB child rate for an FTB child of an individual is the base FTB child rate (see clause 8) if:
(a)the individual or the individual’s partner is entitled to claim or apply for maintenance for the child; and
(b)the Secretary considers that it is reasonable for the individual or partner to take action to obtain maintenance; and
(c)the individual or partner does not take action that the Secretary considers reasonable to obtain maintenance.”
6. Section 32 of the A New Tax System (Family Assistance) (Administration) Act 1999 (“Administration Act”) requires that a person receiving FTB be given notice of a variation of a determination, such as a reduction in the rate of FTB. Section 32 of the Administration Act reads:
“32 Notice of variation of determination
(1)The Secretary must give notice of any variation of a determination under this Subdivision to the claimant, stating the effect of the variation and that the claimant may apply for review of the decision involved in the manner set out in Part 5.
(2)The variation is not ineffective by reason only that the requirements of subsection (1) are not complied with.”
7. Section 224 of the Administration Act provides that, if notice of the decision is sent by pre-paid post to the postal address of the person last known to the Secretary, it is deemed to have been given to the person. Section 224 of he Administration Act reads:
“224 Notice of decisions
(1) If a notice of a decision of an officer:
(a)affecting a person’s entitlement to be paid family assistance under the family assistance law; or
(b)affecting a person’s conditional eligibility for child care benefit by fee reduction; or
(c)affecting a weekly limit of hours, a CCB %, a schooling %, eligibility for the special grandparent rate or a rate under section 81 of the Family Assistance Act applicable to a person; or
(ca)about the amount of child care tax rebate applicable in respect of a person and a child for a quarter under Subdivision AA of Division 4AA of Part 3;
is:
(d) delivered to a person personally; or
(e)left at the address of the place of residence or business of the person last known to the Secretary; or
(f)sent by prepaid post to the address of the person last know to the Secretary;
notice of the decision is taken, for the purposes of the family assistance law, to have been given to the person.
(2)Notice of a decision of an officer affecting or about a matter referred to in paragraph (1)(a), (b), (c) or (ca) may be given to a person by properly addressing, prepaying and posting the document as a letter.
(3)If notice of a decision is given in accordance with subsection (2), notice of the decision is taken to have been given to the person at the time at which the notice would be delivered in the ordinary course of the post, unless the contrary is proved.”
8. Section 29 of the Acts Interpretation Act 1901 provides that a letter is deemed to have been received by a person if it is sent to the correct address of the person known to the sender. Section 29(1) reads:
“29 Meaning of service by post
(1)Where an Act authorizes or requires any document to be served by post, whether the expression “serve” or the expression “give” or “send” or any other expression is used, then unless the contrary intention appears the service shall be deemed to be effected by properly addressing prepaying and posting the document as a letter, and unless the contrary is proved to have been effected at the time at which the letter would be delivered in the ordinary course of post.
…”
9. A person affected by certain decisions made under Family Assistance law can apply for a review of a decision under s 109A of the Administration Act. Under s 109D the application for review must be made within 52 weeks of the original decision, unless it is an “excepted decision”. Section 109E of the Administration Act provides a limit on the date of effect of a review decision for FTB paid by instalments. Sections 109A, 109D and 109E read as follows:
“109A Review of certain decisions may be initiated by applicant
(1)A person affected by a decision (the original decision) that, under section 108, must be reviewed under this section, may apply to the Secretary for review of the decision.
Note: If an application is made for review of a decision relating to a person’s child care benefit entitlement for an income year under this section and the review affects the person’s entitlement to child care tax rebate for the year, the person’s entitlement to that rebate is automatically reviewed: see Division 5.
…
109D Review applications—time limits applicable to review of certain decisions
Certain applications to be made within 52 weeks of notification of decision
(1)Subject to this section, an application for review under subsection 109A(1) of any decision (other than an excepted decision) must be made no later than 52 weeks after the applicant is notified of the decision concerned.
Exception—Secretary may extend time limits in special circumstances
(2)The Secretary may, if he or she is satisfied that there are special circumstances that prevented the applicant from making an application under subsection 109A(1) for review of a decision (other than an excepted decision) within the 52 weeks mentioned in subsection (1), permit a person to make the application after the end of that period and within such further period as the Secretary determines to be appropriate.
…
(6) In this section:
determination decision means a decision that is a determination as originally made or, if varied, the variation of the determination.
excepted decision means a decision:
(a)relating to the payment to a person of family tax benefit by instalment; or
(b) relating to the raising of a debt under Division 2 of Part 4; or
(c)a decision of a kind mentioned in subsection 144(1) (decisions in relation to child care services and registered carers).
…
109EDate of effect of certain decisions relating to payment of family tax benefit by instalment
(1) If:
(a)a person applies to the Secretary, under subsection 109A(1), for review of a decision (the original decision) relating to the payment to the person of family tax benefit by instalment; and
(b)the application is made more than 52 weeks after the person was given notice of the original decision; and
(c)the Secretary or an authorised review officer decides, under subsection 109A(2), to vary the original decision or to set aside the original decision and substitute a new decision; and
(d)the decision of the Secretary or authorised review officer (the review decision) will have the effect of creating or increasing an entitlement to be paid family tax benefit by instalment;
the date of effect of the review decision is:
(e)unless paragraph (f) applies—the date that would give full effect to the review decision; or
(f)if the date referred to in paragraph (e) is earlier than the first day of the income year before the income year in which the application was made—that first day.
(2)The Secretary may, if he or she is satisfied that there are special circumstances that prevented the applicant from making an application under subsection 109A(1) for review of the original decision within 52 weeks, determine that subsection (1) applies as if the reference to 52 weeks were a reference to such longer period as the Secretary determines to be appropriate.
…”
background
10. Mrs Badge separated from her husband, Joseph Badge, in early 2002. Her daughter, Jillian, was born following the separation. At the time she lodged her claim for FTB in respect of Jillian, Mrs Badge was already receiving Parenting Payment (Single) and FTB and child support in respect of her older children. On 11 April 2002, Centrelink sent Mrs Badge an Assessment Form to be completed and returned to Centrelink. On 18 April 2002 and 7 May 2002, Centrelink also sent her letters advising her of her regular rate of FTB. The amount of FTB was approximately $893.00 per fortnight (including the large family supplement of $25.20). The amount included Jillian, at the maximum rate. The letters advised Mrs Badge, under the heading “IMPORTANT INFORMATION”, that “The amount of child support you receive may reduce your payments”. On 22 May 2002, Centrelink sent Mrs Badge another letter informing her of her regular rate of FTB of $803.32 per fortnight, again including FTB at the maximum rate for Jillian. Under the heading “IMPORTANT INFORMATION”, the letter advised Mrs Badge that “If you take reasonable action to obtain child support for Jillian you may be eligible to receive more Family Tax Benefit Part A. The amount of child support you receive may reduce your payments”.
11. On 22 May 2002, Centrelink reduced Mrs Badge’s rate of FTB in respect of Jillian to the base rate because she had not lodged the Assessment Form sent to her on 11 April 2002. In a letter dated 18 June 2006, Centrelink advised her of her then regular rate of FTB of $608.44 (including the large family supplement of $19.60). This included FTB in respect of Jillian at the base rate. Again, the letter contained a reference to “IMPORTANT INFORMATION”, expressed in similar terms to those contained in the letter dated 22 May 2002. Shortly thereafter, Mrs Badge contacted Centrelink and advised them that she had not known she needed to claim child support for Jillian to gain more FTB, and that on 22 June 2006 she had lodged a claim with the Child Support Agency.
evidence of applicant
12. In was Mrs Badge’s evidence that she did not receive the letter from Centrelink dated 11 April 2002 and the Assessment Form. She said the issue of FTB for Jillian was clouded by the fact that, in June 2002, her entitlement to receive Parenting Payment (Single) was being investigated by Centrelink and she had received a number of letters from the respondent regarding the investigation. She was confused by the correspondence she was receiving from Centrelink and also her daughter, Jillian, was very sick at the time. Her Parenting Payment (Single) was cancelled, but was later re-instated. She felt that, for clarification, the letters that had been sent to her by Centrelink about FTB in April and May 2002 could have been re-issued to her once her entitlement to Parenting Payment (Single) had been confirmed and re-instated. She could recall receiving letters from Centrelink which contained a footnote that “If you make steps to get child support, you may be entitled to a greater payment for Jillian”. She said she found the footnote misleading and “wiffy-waffy”, especially at the time when she was being questioned about her single parent status. She had received a further letter from Centrelink on 18 June 2006 where the same footnote appeared. However, as all the literature that she had seen relating to Family Tax Benefit A and B was income based, she had not seen any reference to the requirement regarding child support. She had been receiving the maximum child support of $12 per month from her former husband, Joseph Badge, in respect of her three other children by him and she understood this was the maximum amount she was entitled to receive. As she understood FTB was income based and that she was already receiving the maximum amount of child support for her children, she did not believe she was entitled to receive any more FTB for Jillian. In the notices she received from the respondent in relation to FTB, Jillian’s name had been listed with her siblings. However, there was no separate FTB amount shown in the notices that indicated she was only receiving the base rate in respect of Jillian. The amount of her FTB entitlement was always expressed as a total sum and she was unable to identify the amount that was referrable to each of her children. She also said that, during the four year period from 2002 to 2006 when she attended interviews at Centrelink on an annual basis to ascertain that she was receiving the correct payments, she was not advised that she was only getting the base rate of FTB for Jillian.
13. When questioned by the Tribunal, Mrs Badge said that she had read the decision of the SSAT and had found nothing factually incorrect in the decision. In relation to her claim for FTB (Exhibit R1, T4, pages 19-45), she acknowledged that the application had not been signed by her, but by her daughter Lexie. Much of the information contained in the application had been completed by the father of her children, including Jillian, Joseph Badge. She had started filling out the application, but Mr Badge had completed it. When asked whether she had noticed the reduction of nearly $100 in the FTB Part A payment in the Centrelink letters dated 7 May 2002 and 22 May 2002, Mrs Badge inferred that the FTB for her children from her first marriage had changed and she understood the reduction in her FTB payment was as a result of this.
consideration
Is the applicant entitled to receive arrears of FTB in respect of her daughter, Jillian, for the period from 22 May 2002 to 21 June 2006?
14. In Mrs Badge’s case, her annual rate of FTB for her daughter, Jillian, must be calculated in accordance with the Rate Calculator in Schedule 1 of the Family Assistance Act. Clause 10 of Schedule 1 deals with the effect of maintenance rights and provides that the base FTB child rate is applied if:
“(b)the Secretary considers that it is reasonable for … [Mrs Badge] … to take action to obtain maintenance; and
(c)… [Mrs Badge] … does not take action that the Secretary considers reasonable to obtain maintenance.”
15. What is “reasonable action” is not defined in the Family Assistance Act. However, it is referred to in the Guide to the Family Assistance Law (“Guide”), a policy document issued by the Secretary. Paragraph 3.1.5.20 of the Guide stipulates which Stage of the Child Support Scheme applies. In the case of Mrs Badge, Stage 2 applies. Paragraph 3.1.5.30 of the Guide then explains that reasonable maintenance action for Stage 2 recipients includes applying for a child support assessment through the Child Support Agency and having child support collected by that Agency. Although the Tribunal is not bound to apply policy guidelines, they must be properly taken into account and there must be compelling reasons why the guidelines should be disregarded (Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60). Having said this, the Tribunal notes that clause 10(c) of Schedule 1 of the Family Assistance Act requires that Mrs Badge must take action that the Secretary (and, upon review, the Tribunal) considers reasonable to obtain maintenance.
16. At its request, after the hearing Ms Giaretto provided the Tribunal with a copy of the Assessment Form (SC302.0107). Mrs Badge said that she did not receive the letter from the respondent dated 11 April 2002, which included the Assessment Form. The Tribunal had no reason to doubt the truth or accuracy of her evidence. At the time, she was receiving letters from the respondent regarding her entitlement to Parenting Payment (Single) and she said her priority then was establishing her “single parenting”. She found the notice she received from the respondent dated 22 May 2002 about receiving more Family Tax Benefit Part A misleading and confusing. In the situation where she had not received the Assessment Form itself, about the notice dated 22 May 2002, she submitted:
“I mean, it just says ‘You may receive more’, and it’s not clear, it’s not specific. It does not indicate specifically what needs to be done or what may result from that action. Usually the history of it is the fact that the greater the child support, the greater the father pays the amount received from the government is reduced, and just referring to that too, during that time of that [sic] when it was reduced and obviously on the statements that the income that I was receiving was reduced, I still maintain that it was exceptionally hard to work out, because there were children turning certain ages, the father from the previous marriage paid an unpredictable amount of child support, and even if one child was graduated off from child support, it did not mean my payments would be reduced again, because I still actually had – I had five children from that marriage, so there were at least three children still receiving child support.” (Transcript, page 38)
17. In Re McAdam and Secretary, Department of Family and Community Services [2004] AATA 148, Member Murray Allen had to decide whether clause 10 of Schedule 1 of the Family Assistance Act was applicable to the applicant there, such that it was reasonable for him to take action to obtain maintenance. In December 2001, Mr McAdam applied for FTB in respect of his son, Quinn. Shortly prior to 7 February 2002 a decision was made to grant FTB with effect from 1 July 2001 at the base rate because at that time Mr McAdam had not taken reasonable maintenance action. In a letter dated 7 February 2002, Centrelink wrote to Mr McAdam informing him of the payment of arrears of FTB from 1 July 2001 and informing him of the rates that would be paid in the future. Under the heading “IMPORTANT INFORMATION” the letter contained the following statement:
“If you take reasonable action to obtain child support for Quinn you may be eligible to receive more Family Tax Benefit Part A.”
18. Mr McAdam did nothing in response to the letter dated 7 February 2002 because he interpreted the letter to mean that he had to take action to pay maintenance to his former wife, rather than to try to obtain it from his former wife. However, on the evidence, Member Allen concluded that Mr McAdam knew that payment of FTB at the higher rate depended on him taking action regarding child support, that Centrelink expected him to take that action, and that to do so he needed to contact the Child Support Agency. Mr McAdam knew that he was expected to take reasonable child support action and he knew sufficiently what was expected of him in that regard. He did not do so. Member Allen made the following observation at paragraphs 26-28 of his reasons for decision:
“26. The issue arose at the hearing of whether, for clause 10 of Schedule 1 to be activated, the Secretary must formally notify a person that there is an expectation of action being taken and specify precisely what that reasonable action is. Clause 10 is silent about such things and that can be contrasted with s 63 of the Social Security Administration Act 1991, which deals with the situation where the Secretary considers that a person should attend a Centrelink office or provide information to Centrelink. That section sets out with great particularity how the person is to be notified of the requirement to do the things expected of him or her.
27. I accept as a general proposition that a person cannot fail to act unless he or she is aware that he or she is expected to act and what steps are expected to be taken. I do not consider that clause 10 requires any particular type of formality in terms of notification, but I consider that it must be made clear to the person that there is an expectation of action and what that action involves.
28. I do not need to decide the particular point in this case, but I doubt that the statement contained in the letters of 7 February 2002, 27 November 2002 and 8 January 2003 as quoted in para 8 above would be a sufficient notification that action is required. If this case concerned a period of time immediately after the 7 February 2002 letter and that was the only form of notification to the applicant of what Centrelink expected of him, then I may have concluded that there was insufficient notification of what was expected by the Secretary to be done.”
19. In the Tribunal’s view, in Mrs Badge’s case the Centrelink notice dated 22 May 2002 was not sufficient to advise Mrs Badge of the decision to reduce her Family Tax Benefit Part A in respect of Jillian. Nor were the notices dated 18 April 2002 and 7 May 2002. Moreover, like Centrelink’s 7 February 2002 letter in Re McAdam, the notice to Mrs Badge dated 22 May 2002 did not satisfactorily explain that the reduction in the FTB was because she had not satisfied the Secretary that she was taking reasonable steps to obtain maintenance for Jillian. And, on her evidence, there were occasions annually, between 2002 and 2006, in her meetings with Centrelink regarding her social security entitlements that the opportunity would have arisen for the FTB base rate for Jillian to be raised by the Centrelink officers. Notwithstanding the notice(s) to Mrs Badge, the discussion about Jillian’s rate was never raised.
20. The Tribunal finds that, having regard to the statements contained in the Centrelink notices dated 18 April 2002, 7 May 2002 and 22 May 2002 and in the absence of receiving the letter dated 11 April 2002 with the Assessment Form, Mrs Badge did not receive sufficient notification of what was expected of her. The action that she took to obtain maintenance for her daughter Jillian was reasonable in the circumstances.
21. Ms Giaretto made submissions to the Tribunal about the application in this case of ss 109A, 109D, 109E and 224 of the Administration Act and s 29 of the Acts Interpretation Act 1901. Given the findings made in paragraph 19 above about the operation of clause 10 of Schedule 1 of the Family Assistance Act, it is not necessary for the Tribunal to deal with these submissions.
conclusion
22. For the reasons above, the Tribunal finds that clause 10(c) of Schedule 1 of the Family Assistance Act is not satisfied in Mrs Badge’s case. It follows that, having lodged a claim for child support with the Child Support agency on 22 June 2006, she is entitled to FTB in respect of her daughter Jillian at the maximum rate to which she is entitled under s 58(1) of the Family Assistance Act.
decision
23. The Tribunal sets aside the decision under review and substitutes a decision that the applicant is entitled to receive arrears of Family Tax Benefit in respect of her daughter, Jillian, for the period from 22 May 2002 to 21 June 2006.
I certify that the 23 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member R W Dunne
Signed: .............J Coulthard..........................................
AssociateDate of Hearing 2 September 2009
Date of Decision 26 November 2009
Advocate for the Applicant Self-representedAdvocate for the Respondent Ms L Giaretto
Centrelink Legal Services & Procurement Branch
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