Blunden; Secretary, Department of Family and Community Services - [2000] AATA 273

ADMINISTRATIVE APPEALS TRIBUNAL
DECISION AND REASONS FOR DECISION [2000] AATA 273

Social Security – family allowance – maintenance income test – annual rate of maintenance income – lump sum maintenance arrears payment – whether maintenance income – whether to be brought to account in working out annual rate of maintenance income – method of ascertaining annual rate

Social Security Act 1991 (Cth), ss 1069-A1, 1069-J1
Child Support (Registration and Collection) Act 1988 (Cth), s 76

Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Harris v Director-General of Social Security (1985) 57 ALR 729
King v Secretary, Department of Family and Community Services [2000] FCA 111

ADMINISTRATIVE APPEALS TRIBUNAL
ADELAIDE REGISTRY No. S99/19

BETWEEN:
SECRETARY, DEPARTMENT OF FAMILY
AND COMMUNITY SERVICES
Applicant
and
HEATHER BLUNDEN
Respondent

DECISION

Tribunal:       Justice J W von Doussa (Presidential Member)
Date:              7 April 2000
Place:             Adelaide
Decision:        That the Tribunal sets aside the decision of the Social Security Appeals Tribunal dated 14 December 1998 and decides that the family allowance rate to which the respondent Heather Blunden was entitled on the paydays 2 July 1998, 16 July 1998 and 30 July 1998 was $62.40 (before adjustment on account of advances).

………………………..
Justice J W von Doussa
Presidential Member

ADMINISTRATIVE APPEALS TRIBUNAL
ADELAIDE REGISTRY No. S99/19

BETWEEN:
SECRETARY, DEPARTMENT OF FAMILY
AND COMMUNITY SERVICES
Applicant
and
HEATHER BLUNDEN
Respondent

REASONS FOR DECISION [2000] AATA 273

Date 7 April 2000 Justice J W von Doussa

This application is made to the Administrative Appeals Tribunal under s 1283 of the Social Security Act 1991 (Cth) (the Act) to review a decision of the Social Security Appeals Tribunal (the SSAT).
On 14 December 1998 the SSAT set aside the decision of the applicant's delegate made on 26 June 1998, as affirmed by an authorised review officer on 1 September 1998, to reduce payments of family allowance on account of an arrears payment of child support, and substituted a decision that the arrears payment of child support was to be disregarded for the purpose of calculating a rate of family allowance.
The issue raised by this application is whether the arrears payment of child support is "maintenance income" within the meaning of the Act. If it is, further questions arise as to how the payment is to be treated for the purpose of determining an "annual rate of … maintenance income" under the Act, and over what period of time following receipt of the payment it is to affect the rate of family allowance paid to the respondent, Ms Blunden.

Facts

Ms Blunden is a single person with two dependent children. At all material times she has been in receipt of family allowance and the single rate of parenting payment. Since before September 1993 her former partner has been subject to a liability to pay maintenance in accordance with the requirements of the Child Support (Registration and Collection) Act 1988 (Cth) (the Child Support Act). The former partner's liability for maintenance accrued monthly, but monthly payments were never paid by him to or collected by the Child Support Agency. The Agency was, however, successful in garnishing annual refunds of income tax due to the former partner as follows:
October 1994                  $1,049.33
July 1995   $2,004.67
July 1996   $1,991.09
August 1997   $78.10
In 1998 the unsatisfied liability to pay maintenance was increasing at a monthly rate of $339.58. In May 1998 the Child Support Agency garnisheed the sum of $5,153.77 from moneys that fell due to the former partner when he endeavoured to realise on his entitlement under a superannuation scheme - a step he took as part of a plan to leave Australia and take up residence overseas. The whereabouts of the former partner since May 1998 is not revealed by the available information. No maintenance payments have been received since May 1998 by the Child Support Agency, and it is the respondent's case that as her former partner has apparently left Australia, there is no prospect that any further money will be collected on account of past, present or future maintenance obligations.
On 17 June 1998 the Child Support Agency paid the sum of $5,153.77 to Ms Blunden. The Agency advised her that this sum comprised a "regular" monthly payment of maintenance for May 1998 of $339.58, and $4,814.19 being arrears of maintenance for the months of June 1994 to September 1994, and November 1994 to April 1995. The payment was credited by the Agency to the arrears longest outstanding.
Prior to the receipt of the maintenance payment in June 1998 Ms Blunden received a fortnightly family allowance payment based on a fortnightly entitlement of $361.30. In consequence of the maintenance payment in June 1998 Ms Blunden's entitlement to family allowance was reduced by decision of the delegate of the respondent, the Secretary, Department of Family and Community Services operating under the style Centrelink. The reduction was to the minimum standard family allowance rate, in Ms Blunden's case, of $62.40 for each of the three family allowance paydays in July 1998, namely the paydays on 2 July, 16 July and 30 July 1998. [The actual payments made to Ms Blunden varied somewhat from these family allowance entitlement amounts because of adjustments to repay earlier advances and because a further advance was made to her. The advance of family allowance is authorised by s 864A of the Act. It is unnecessary to give details of these adjustments.]
Ms Blunden considered the reductions in the July family allowance payments were unfair. She complained that she had waited years for payment of the arrears of maintenance, and it was unjust that she should suffer a reduction in three fortnightly payments when normally only two payments were made in each calendar month. She raised a number of other complaints as well about the decision.
Centrelink, in accordance with The Guide to the Administration of the Social Security Act (the Guide) developed by it, undertook a "reconciliation of entitlement" to ascertain if the administrative adjustments which had been made to Ms Blunden's July payments disadvantaged her. This exercise involved working out what reductions from family allowance would have been made from July 1994 to July 1998 inclusive had the maintenance been paid on time to the Child Support Agency in the months of June 1994 to September 1994, and November 1994 to April 1995, and comparing these notional reductions with the reductions actually made. The notional reductions totalled $3,373.14 compared with the actual reductions made of $1,840.72. Ms Blunden was therefore advised that she had not been disadvantaged by the method of assessment which had been applied, and no retrospective adjustment in the family allowance payments was made.

The legislation

The entitlement to family allowance is established under Part 2.17 of the Act. Section 831 designates each dependent child of a person as an "FA child" of that person. Section 838(1) sets out the requirements that qualify a person for family allowance. The rate of family allowance payable is calculated according to the provisions of Part 3.7 of the Act, and in particular by the method prescribed in Family Allowance Rate Calculator set out in s 1069. It is not disputed that Ms Blunden met the qualifications for family allowance, and it is unnecessary to recite many of the steps in the method of calculation of her rate of family allowance as there is also no dispute about Ms Blunden's family allowance entitlement, apart from the consequence of the June payment of maintenance arrears received from the Child Support Agency.
It is necessary however to refer to several provisions of the Family Allowance Rate Calculator. MODULE A contains the Overall Rate Calculation Process which commences:
"Method of calculating rate
1069-A1The rate of family allowance of a person (other than an approved care organisation) who has an FA child or FA children is a fortnightly rate calculated as follows:…"
This provision makes clear what is implicit in many of the later provisions of modules in s 1069, namely that the calculator is concerned ultimately to arrive at a "fortnightly rate" which will determine the amount of the instalment of family allowance to be paid on the "family allowance payday", which is each alternative Thursday: see ss 6(1) and 863 of the Act.
Step 4 in MODULE A of the calculator requires the application of the maintenance income test in MODULE J to the person's adjusted income tested family allowance rate, ascertained by following the preceding steps 1-3 in MODULE A, to work out any reduction of maintenance income.
MODULE J is central to the issues in this case, and in particular the meaning and application of Step 1. MODULE J, entitled Maintenance Income Test provides:

"Method statement

Step 1. Work out the annual rate of the person's maintenance income disregarding any maintenance income for: (a) a dependent child who is not an FA child; or (b) an FA child who is, or because of subpoint 1069-B7(2) is taken to be, outside Australia for the purposes of point 1069-B7; or (c) an FA child in respect of whom point 1069-K3 applies because action to obtain maintenance for the child that the Secretary considers reasonable to take has not been taken. ...

Step 2.          Work out the person's maintenance income free area (see points 1069-J8 and 1069-J9). Note: A person's maintenance income free area is the maximum amount of maintenance income that the person may have without any deduction being made for maintenance income from the person's rate of family allowance.
Step 3. Work out whether the person's maintenance income exceeds the person's maintenance income free area.
Step 4. If the person's maintenance income does not exceed the person's maintenance income free area, the person's maintenance income excess is nil and there is no reduction for maintenance income.
Step 5. If the person's maintenance income exceeds the person's maintenance income free area, the person's maintenance income excess is the person's maintenance income less the person's maintenance income free area.
Step 6. Use the person's maintenance income excess to work out the person's reduction for maintenance income using points 1069-J10 and 1069-J11. Note:…[not relevant]."

In the present case, Step 1 does not require that any maintenance income be disregarded as paragraphs (a) to (c) have no application.
The calculation required by Step 2 determines that Ms Blunden's maintenance income free area is $1,268.80 per year, a figure about which there is no dispute.
For the purpose of Step 6 point 1069-J11 provides:
"Reduction for maintenance income
A person's reduction for maintenance income is:

maintenance income excess 52

Note: Explanation of derivation of maintenance income reduction formula: start with the person's maintenance income excess—divide by 26 to convert from a yearly to a fortnightly basis—divide by 2 and give a 50% taper."

The expression "maintenance income" in Step 1 is defined by s 10(1) of the Act as follows:
"maintenance income, in relation to a person, means:
(a)child maintenance—that is, the amount of a payment or the value of a benefit that is received by the person for the maintenance of a dependent child of the person and is received from:
(i)        a parent of the child; or
(ii)       the partner or former partner of a parent of the child; or
(b)      … (not relevant)
(c)       … (not relevant)
but does not include disability expenses maintenance."

For the purpose of the definition of maintenance income, s 10(3) provides that a payment received under the Child Support Act is taken to be received from the person who is the payer.

The expression "annual rate" in Step 1 is undefined, and there is no provision in the Act that specifies a manner of calculating the annual rate.
It is also necessary to refer to s 76(1) of the Child Support Act which provides that every payee of a registered maintenance liability is entitled to be paid, on or before the first Wednesday following the end of each month, at an amount equal to the aggregate of amounts received in the previous month. Thus, whilst the Act makes provision for fortnightly paydays to persons entitled to family allowance, the Child Support Act provides for a single payment each month of moneys collected by the Child Support Agency in the preceding month.

Centrelink's decision

Centrelink treated the whole of the payment of $5,153.77 received by Ms Blunden in June 1994 as maintenance income. In the application of Step 1 of the MODULE J method, Centrelink applied the method of calculation contained in the Guide to ascertain the annual rate of Ms Blunden's income. The Guide states that regular monthly Child Support Agency payments are multiplied by twelve to obtain an annual rate. Child Support Agency arrears payments, on the other hand, are multiplied by eight to obtain an annual rate. The lower multiplier is used to compensate for the fact that if regular payments had been made, the person's maintenance income free area may have reduced the impact of the payments on the person's rate of family allowance. The results of each calculation have been added to give an annual rate which has then been used to assess the rate of family allowance payments for that month.
Centrelink calculated that in the month of June 1998 Ms Blunden had an annual rate of maintenance income as follows:
Regular child support maintenance ($339.58 x 12) + arrears ($4,814.19 x 8)
= $4,074.96 + $38,513.52
= $42,588.48 annual rate.

Step 5 of the MODULE J method required that Ms Blunden's maintenance income free area amount of $1,268.80 be deducted from the annual rate, giving a maintenance income excess of $41,319.68. The application of the point 1069-J11 formula required the maintenance income excess to be divided by fifty-two to give Ms Blunden's reduction for maintenance income, viz $794.60 per fortnight. This amount effectively eliminated any family allowance payment over and above the minimum standard family allowance rate, which is not subject to further reduction for maintenance income.

The SSAT decision

The three members of the SSAT were divided in their opinion. The majority of the Tribunal accepted Centrelink's appropriation of the June payment as to $339.58 for regular current maintenance, and as to $4,814.19 for arrears of maintenance. The majority considered that the arrears of maintenance were maintenance income, but were not to be taken into account in assessing the present annual rate of maintenance income because they represented money owed in 1994 and 1995. As such the majority considered that the arrears "cannot be categorised as moneys which form part of a current and ongoing source of maintenance income to Ms Blunden in 1998". Accordingly, the Tribunal set aside the Centrelink decision and determined that the matter be remitted to Centrelink with a direction that Ms Blunden's rate of family allowance be calculated without regard to the lump sum arrears of maintenance received by her in June 1998. The dissenting member of the Tribunal would have affirmed Centrelink's decision.

Submissions of the parties

On the hearing of the application before this Tribunal Ms S Maharaj of counsel appeared for the applicant. She contended that the decision of the SSAT should be set aside, and the original decision of Centrelink confirmed. She contended that the definition of "maintenance income" in s 10 of the Act includes all payments of maintenance received in the period under consideration, without regard to when the legal liability to make such payments arose; and that all payments constituting "maintenance income" are to be brought to account in calculating the annual rate of that income. It was submitted that the contrary view would treat arrears of maintenance as "windfalls" which fell outside of the maintenance income test simply because the payments were made late. Such an interpretation, it was said, would leave the child maintenance regime open to substantial abuse. Such an interpretation could not have been contemplated by the legislature. Centrelink correctly brought to account the arrears in calculating the annual rate of maintenance income. As there is no legislative regime set in place as to the method of assessing the annual rate of maintenance income, Centrelink was entitled to set in place a policy (the Guide) for the purposes of Centrelink carrying out the assessment activity. The Guide enabled Centrelink to obtain consistency in administration of the Act. It was submitted that the method postulated in the Guide was consistent with the objects of the Act and, moreover, the Guide met the requirements of a lawful policy in that it did not seek to limit the Secretary's statutory discretion to depart from the Guide if its application in a particular case were to produce an unjust decision: see Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634. Indeed, in this case Centrelink undertook a "reconciliation of entitlement" to ensure that the application of the Guide had not disadvantaged Ms Blunden.
Mr S Cole of counsel appeared for Ms Blunden. He contended that the decision of the SSAT should not be disturbed as the majority was correct to treat the arrears of maintenance as irrelevant to the assessment of the annual rate of maintenance income. It was submitted that the arrears of income could only reflect an annual rate of maintenance income during the periods of 1994 and 1995, not in the year 1998. Mr Cole referred the Tribunal to a passage in the joint judgment of Gibbs CJ, Brennan, Deane and Dawson JJ in Harris v Director-General of Social Security (1985) 57 ALR 729 at 733 which he contended had a direct application to the circumstances of the present case. Harris concerned s 28(2) of the Social Services Act 1947 (Cth) which provided for the reduction of fortnightly instalments of Old Age Pension "by one half of the amount (if any) per annum by which the annual rate of the income of the claimant or pensioner exceeds" a specified amount. In the course of their joint judgment their Honours said, at 733:
"If the current income from a current source is receivable as so much per week or per month, it must be calculated and expressed as an amount per annum. But an annual rate of income is not ascertained merely by extending to a year the income receipts of a shorter period without considering the period in respect of which the particular item of income has been received. A pensioner whose only income apart from his pension is $1000 paid annually as a dividend on an investment has an annual rate of income of $1000. It is wrong in law as it is absurd in fact to say that he has an annual rate of income of $52,000 in the week in which he receives the dividend and a nil annual rate of income for 51 weeks of the year. His investment, the source of his income, yields an annual sum and, so long as the pensioner retains the investment, his annual rate of income from that source will be $1000."
Mr Cole contended that the Act does not provide for retrospective adjustment of family allowance entitlement upon the receipt of a lump sum for arrears of maintenance, let alone permit a distorted approach to calculating the respondent's annual rate of maintenance income in the manner adopted by Centrelink. Policy guidelines cannot be applied to remedy a deficiency in the legislation.
My first reaction upon hearing the oral arguments of counsel was to think that a calculation in the circumstances of this case based on a notional annual rate of maintenance income of $42,588.48 was so far removed from the reality of the situation that it could not be correct. Ms Blunden had never received in any yearly period maintenance income of that order, nor was there any prospect in June 1998 that she would in following months receive further payments on account of arrears of maintenance. On the contrary, the known facts suggested that she would receive nothing more through the Child Support Agency. But if this were correct, and the passage from Harris relied upon by Mr Cole did fairly apply to Ms Blunden's case, how otherwise should the annual rate of maintenance income be calculated if the arrears of maintenance were to be brought to account? The answer to these questions remained far from clear at the end of the hearing, and leave was given to counsel to file further written submissions addressing these and other questions that had arisen during the course of oral argument. I am grateful for the written submissions subsequently received on 11 November 1999 from counsel for the applicant and on 14 December 1999 from the Legal Services Commission of South Australia on behalf of Ms Blunden.

Conclusions

I consider that the payment received by Ms Blunden in June 1998 in its entirety was maintenance income, within the meaning of s 10 of the Act. It was "the amount of a payment…that is received by…" Ms Blunden. The definition is directed to the actual receipt of a payment or benefit. The definition is unlimited by any condition requiring that the payment or benefit relate to any particular period. It is an unfortunate fact that a liability by one parent, to pay child maintenance to another, is often not discharged on time. By defining maintenance income as a benefit or payment "that is received by" a person, without limitation as to when the recipient became entitled to receive the benefit or payment, the definition is cast in terms which takes account of the likelihood that many payments of child maintenance will be made late. The definition is not concerned with when the underlying legal liability arose, if in fact there were an underlying legal liability. The definition is wide enough to encompass a payment voluntarily made for child maintenance by one parent or partner or former partner to the other.
The majority of the SSAT accepted that the arrears of maintenance were "maintenance income" but considered that the arrears should be left out of account in working out the "annual rate" as they related to the distant past, and were not part of the current and ongoing source of maintenance income. Once it is accepted that "maintenance income" is by definition descriptive of payments actually received, the "annual rate" in the phrase "annual rate of … maintenance income" must reflect the payments actually received. It is immaterial that the payments actually received relate to liabilities that arose in the past.
I consider the majority of the SSAT erred in leaving the arrears of maintenance out of account. The arrears of maintenance received by Ms Blunden form part of her maintenance income to be included in the assessment of her annual rate of maintenance income.
Although the Act in the s 1069 Family Allowance Rate Calculator does not enlighten the reader on how to work out the "annual rate", guidance is available from the reasons of the High Court in Harris where the issue was how to take into account the variable casual earnings of a pensioner in assessing her annual rate of income for the purpose of s 28(2). In their joint judgment Gibbs CJ, Brennan, Deane and Dawson JJ said at 733:
"The distinction between an annual amount of income and an annual rate of income is critical to an understanding of s 28(2). If an annual amount of income were a component in the s 28(2) calculation, it would be necessary to identify a commencing date of the income year in order to ascertain what receipts fell into one year and what into the next. But a rate of income, like a rate of interest, may vary within any annual period though it is expressed as an annual rate. It is a current rate of income, expressed as so much per annum. An annual rate of income may not subsist for a year: an annual rate of income that obtains in one week may change in the week following. Annual income is the sum of the products of each annual rate of income that obtained during any part of the year multiplied by the fraction of the year during which it obtained.
Income can be derived from various sources, as the definition of 'income' in s 18 makes clear. Some items of income may be received at frequent and regular intervals during a year (for example, weekly or fortnightly wages paid to an employee), some intermittently (for example, profits of a business) and others at lengthy intervals (for example, annual dividends on shares). Subject to the exceptions stated in the s 18 definition and subject to the limitations expressed in s 29, no income derived from any source is to be left out of account in ascertaining the annual rate of income. At the time when an annual rate of income is ascertained, it is necessary to have regard to the pensioner's sources of income at that time and to find what each of those sources would yield over the period of a year assuming the current yields from those sources were to continue. It is not necessary to predict whether the pensioner will retain his sources of income for the year or whether the current yields will be maintained, for the annual rate of income is the current rate of income though it is calculated and expressed as an annual rate."
The annual rate is the current rate of income expressed as so much per annum. The annual rate must take into account actual income from all sources at the time the rate is being determined. Their Honours stressed that in every case the ascertainment of the annual rate of income is a question of fact (at 732) and that the circumstances of the case must determine what is a fair method of ascertaining the annual rate of income at a particular time (at 734). Their Honours observed, at 733-734:
"In cases where pensioners or claimants are employed intermittently, it may be appropriate in some cases to treat the intermittent work as a continuing source of income and to take an average of earnings over a period as the yield from that source, and in other cases to treat each employment as a separate source of income yielding its particular amount of earnings. The former method would establish a comparatively constant annual rate of income; under the latter method, the annual rate of income would change as the pensioner or claimant went into and out of employment. The circumstances of the particular case would show which method is more appropriate."
For the purposes of Step 1 of MODULE J the annual rate of a person's maintenance income is a rate specific to a point in time, not to a particular year period. As earlier observed, the Act requires that there be a payment of family allowance once each fortnight. It would be consistent with the terms of ss 863 and 1069 that there be a fresh calculation of family allowance by the method specified in the Family Allowance Rate Calculator each fortnight when there is a change in any one of the variables to be brought to account in any of the specified steps. Centrelink however undertakes a fresh calculation of the rate of family allowance on a monthly basis where there has been a receipt of maintenance income in one month which differs from the maintenance income received in the preceding month. That the calculation for the current period is based on maintenance income received at an earlier point in time is inevitable. It is a practical impossibility to match exactly the period in respect of which a payment is made with payments actually received in the same period. The assumption in the Family Allowance Rate Calculator is that the income in a period of time which precedes the period in respect of which the family allowance will be paid is indicative of the annual rate of maintenance income. The steps enumerated in the Family Allowance Rate Calculator in MODULE A and the maintenance income test in MODULE J are expressed in the present tense. Theoretically the calculations assume that present income receipts from various sources including maintenance payments will bring about adjustments to the present family allowance entitlement. As a matter of practical reality the two cannot be contemporaneously matched. Practical reality dictates that receipts constituting maintenance income will precede adjustments made to family allowance, although the Act speaks as if both notionally occur in the same time frame.
One of the grounds of challenge by Ms Blunden before the SSAT was that she suffered a reduction in family allowance on three paydays simply because there happened to be three paydays rather than two in the month of July 1998. In substance, though not in form, this amounted to a challenge to the decision to apply the annual rate of maintenance income calculated by Centrelink following the receipt of the arrears of maintenance for one month, rather than in respect of only the next fortnightly payment which followed the receipt of the arrears.
In my opinion Centrelink was not in error in applying the annual rate of maintenance income so calculated for the one month period following the month in which the payment was received from the Child Support Agency by Ms Blunden. The ascertainment of the annual rate of maintenance is a question of fact to be determined in the circumstances of the case. The critical circumstance here is that the payment of maintenance received was a payment made under s 76 of the Child Support Act. That payment, by the terms of s 76, was a payment of the aggregate payments collected in the preceding month by the Child Support Agency. Payments made by the agency are monthly payments. It is in accordance with the sensible and fair administration of the Act that an annual rate of maintenance income which reflects aggregate payments of child maintenance over the period of one month be applied by Centrelink for a like period of one month.
It is perhaps anomalous that Ms Blunden was to suffer a reduction over three paydays rather than two because the reductions occurred in the month of July 1998. There are however normally two months each year when there are three paydays in the month (in 1998 there were actually three such months, January, July and December), and whilst events have worked against Ms Blunden in this case, it is not difficult to think of cases where the chance collection by the Child Support Agency of a payment on one day rather than another would work to the advantage of the person receiving family allowance. The consistent and efficient administration of the Act may produce results which impact somewhat differently in one case from another on the recipient of a payment, but that does not establish that the Act has been erroneously applied or administered. In the present case, when it was suggested that the application of the reduction for maintenance income had been unfairly applied, the "reconciliation of entitlement" was undertaken. This showed that Ms Blunden was still significantly better off than she would have been had the maintenance payments been collected on time.
As an annual rate of maintenance income based on receipts from the Child Support Agency, and the consequent reduction for maintenance income worked out under MODULE J, are applied in monthly rests I do not consider Centrelink fell into error in its assessment of the annual rate of maintenance income. I have reached this conclusion even though at first sight an assessment of the annual rate of maintenance income of $42,588.48 looks unrealistic. This case is unlike the example of the pensioner who received an annual payment of dividend on an investment, referred to by the majority in Harris. The dividend payment in that example reflected annual income from a continuing investment. The example gives rise to no difficulty, at the time when the annual rate of income falls for determination, in finding what the investment would yield over the period of a year assuming that the current yield is to continue. The present case is not even like one where a person is in receipt of intermittent variable earnings where an average over time is possible. This is a case where the receipt has to be treated as coming from a source which yielded only the one payment that could be relevant to the calculation of the annual rate of maintenance income. To arrive at an annual rate of maintenance income that is fair at a particular time, the method of ascertainment adopted must have regard to the period during which the annual rate so determined is to affect the rate of family allowance, and also the timeframe over which the item of maintenance income is to be reflected in future annual rate calculations.
Thus, in the pensioner example given in Harris, the annual rate of income, once ascertained, was to enure until something occurred which falsified the assumption on which the annual rate was ascertained - that is until the source of income was lost or the level of income yield changed (Harris at 734). The ascertained annual rate of income had the potential to be applied and to affect the rate of pension payments well into the future. In the present case the annual rate of maintenance income determined by Centrelink was to apply for one month only, and was to affect the rate of family allowance for one month only. As the month of July 1998 payments were to be adjusted to reflect actual receipts in the month period which notionally corresponded (in reality the month immediately preceding) I consider that to work out an annual rate of maintenance income by multiplying the regular or current month's payment by twelve, and arrears payments of maintenance by a discounted multiplier, is consistent with the requirements of the Act. Such a calculation does not reflect legal error. The rate of discount applied in respect of the arrears payments of maintenance is admittedly arbitrary in the interests of administrative consistency and efficiency, but this method of assessment, set out in the Guide, does not limit the Secretary's discretion to adopt some other method of ascertaining the annual rate of maintenance income if the discount applied pursuant to the Guide produces an unfair result in a particular case.
In my opinion the decision of Centrelink to pay family allowance at a rate of $62.40 (the minimum standard family allowance rate before adjustments on account of advances to Ms Blunden) for the three paydays in July 1998 was correct.
Since this application was argued, the Federal Court of Australia has decided an appeal from this Tribunal in a case which concerned the way in which reduction of the rate of family allowance is to be calculated having regard to the annual rate of maintenance income received from time to time: see King v Secretary, Department of Family and Community Services, [2000] FCA 111.
Mrs King, a divorced mother of three children, received sporadic maintenance payments from her ex husband. The rate of family allowance paid to her for two fortnightly periods in May 1998 was reduced because of a maintenance payment received from her husband in April 1998. The Guide policy had been applied by Centrelink so that the maintenance payment received in April 1998 of $1,032 was converted to an annual rate of maintenance income of $12,003.84. This led to a reduction in the two family allowance payments in the following month.
On review, this Tribunal also worked out the annual rate of maintenance income by taking the actual receipt of maintenance in April 1998 and multiplying it by twelve to arrive at the annual rate of maintenance income for the purpose of MODULE J.
Mrs King appealed, and argued before the Federal Court that the annual rate of maintenance income was the aggregate of maintenance payments she had received in the 1997-1998 year. French J, in rejecting this argument said, at paras 19-20:
"The common sense of Mrs King's position is perfectly understandable. Unfortunately it yields to a law which, notwithstanding its complexity, appears to place administrative process ahead of a precise calculation of the entitlements of beneficiaries. The payments of family allowance are to be made fortnightly. The rate is a fortnightly rate. So Point 1069-A1 says. The fortnightly rate must be adjusted from time to time according to the receipt of maintenance income. The law reflected in Step 1 of Module J requires calculation of an annual rate of maintenance income which is then fed into the subsequent steps. The legislative scheme is such that this appears to be the only method by which maintenance income can be assessed under the Act. This is the method that was applied by the Administrative Appeals Tribunal.
The approach taken to calculate the annual rate of maintenance income in this case, reflects that taken by the High Court in Harris v Director-General of Social Security …"
The case was not concerned with arrears of maintenance relating to periods in the past, but the decision supports the approach which I have applied in this case of applying a multiplier of twelve to payments received in the month preceding that in which the family allowance payments in question are to be made.
The decision of the Tribunal is that the decision of the SSAT dated 14 December 1998 is set aside and that in lieu thereof it is determined that the family allowance rate to which Ms Blunden was entitled on the paydays on 2 July 1998, 16 July 1998 and 30 July 1988 was $62.40 (before adjustment on account of advances).

I certify that this and the 15 preceding pages are a true copy of the decision and reasons for decision herein of Justice J W von Doussa (Presidential Member) Signed: ……………………………… Associate Date of Hearing: 1 September 1999 Date of Decision: 7 April 2000 Solicitor for the Applicant: Australian Government Solicitor Counsel for the Applicant: Ms S J Maharaj Solicitor for the Respondent: Legal Services Commission of South Australia Counsel for the Respondent: Mr S C Cole