BRYAN RODNEY VICKERS and SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
[2009] AATA 534
•17 July 2009
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2009] AATA 534
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2008/5883
GENERAL ADMINISTRATIVE DIVISION ) Re BRYAN RODNEY VICKERS Applicant
And
SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
Respondent
And MARY ANNE SMITH
Other Party
DECISION
Tribunal Senior Member L Hastwell Date17 July 2009
PlaceAdelaide
Decision The Tribunal affirms the decision under review.
..............................................
L HASTWELL
(Senior Member)
CATCHWORDS
SOCIAL SECURITY – pensions, benefits and allowances – Parenting Payment Single – separated parents with equal shared care of child – financial circumstances considered – both parents committed to child’s wellbeing – consideration of earning capacity of each parent – consideration of expenses of child – consideration of which parent takes responsibility for key expenses – decision affirmed
Social Security Act 1991 ss 5(18), 5(19), 500, 500D(2),
Social Security (Administration) Act 1999
REASONS FOR DECISION
17 July 2009 Senior Member L Hastwell 1. Bryan Rodney Vickers (the applicant) is the father of Reuben Jaycob Vickers-Smith who was born on 11 November 2003.
2. The mother of the child is Mary Anne Smith. She has been joined as the other party to Mr Vickers’ application to this Tribunal.
3. Mr Vickers and Ms Smith were in a de facto relationship which ended in 2004. Reuben is the only child of that relationship.
4. Mr Vickers applied for Parenting Payment Single with respect to the child, Reuben, and has been receiving that payment since 16 June 2006. He asserts that he has had effectively shared care of Reuben since soon after the end of his relationship with Ms Smith. Both Mr Vickers and Ms Smith agree that they have had an equal shared care arrangement with respect to Reuben since 16 February 2007.
5. Ms Smith also has the care of her child of an earlier relationship, Rachel, who was 14 years of age at the time of the hearing before the Tribunal. Between January and May 2008 her pattern of care with respect to Rachel changed to 30 percent. She was told in April 2008 that she was no longer entitled to receive Parenting Payment Single for Rachel and it was cancelled with effect from 25 March 2008. Despite her level of care of Rachel increasing to 50 percent after May 2008, she ceased to be eligible to receive Parenting Payment Single for Rachel. She sought review of that decision.
6. Because of legislative changes in 2006, Ms Smith cannot now qualify for Parenting Payment with respect to Rachel.
7. An Authorised Review Officer concluded on 17 July 2008 that the decision to cancel her Parenting Payment was correct because Ms Smith’s care arrangements with respect to Rachel had altered and had reduced to 30 percent. Because Reuben was already the Parenting Payment child of Mr Vickers, he could not be a Parenting Payment child of Ms Smith. A child can only be a Parenting Payment child of one person.
8. Ms Smith sought review of this decision to the Social Security Appeals Tribunal (the SSAT). Mr Vickers was joined as a party to the appeal.
9. On 17 November 2008, the SSAT set aside the decision under review and substituted its decision that Ms Smith is the principal carer of Reuben and was entitled to receive Parenting Payment Single since 25 March 2008 in respect of the care she provides for him.
10. Mr Vickers seeks review of that decision to this Tribunal. Ms Smith has been joined as a party to that application for review.
issues
11. The sole issue for determination in this matter is which of Ms Smith or Mr Vickers should be regarded as the principal carer of Reuben since 25 March 2008 for the purposes of the entitlement to Parenting Payment. There is no dispute with respect to Parenting Payments prior to that date as they were both receiving Parenting Payment Single.
relevant legislation
12. The relevant legislation is found in the Social Security Act 1991 (the Act) and the Social Security (Administration) Act 1999 (the Administration Act).
13. Section 500 of the Act sets out the qualification requirements for entitlement to Parenting Payment. It provides as follows:
“500 Qualification for parenting payment
(1) A person is qualified for parenting payment if:
(a)the person has at least one PP child (see sections 500D and 500F to 500H); and
(b) the person is an Australian resident; and
(c)in a case where the person is not a member of a couple and does not have at least one PP child who has not turned 6—the person meets any participation requirements that apply to the person under section 500A; and
(d) at least one of the following conditions is satisfied:
(i)the person is not a member of a couple and the person was not a lone parent at the start of the person’s current period as an Australian resident;
(ii)the person has, at any time, been in Australia for a period of, or periods adding up to, at least 104 weeks during a continuous period throughout which the person was an Australian resident;
(iii)the person has a qualifying residence exemption for parenting payment.”
14. Section 500D(2) of the Act sets out the criteria to determine whether a child can be regarded as a Parenting Payment child of a person.
15. Section 500D(2) provides as follows:
“500D PP child
…
(2) A child is a PP child of a person if:
(a) the child is a child of the person; and
(b) the person is not a member of a couple; and
(c) the child has not turned 8; and
(d) the person is the principal carer of the child.”
16. Section 5(18) of the Act provides that only one person as a time can be the principal carer of a particular child.
17. Section 5(19) of the Act provides as follows:
“5 Family relationships definitions—children
…
(19)If the Secretary is satisfied that, but for subsection (18), 2 or more persons (adults) would be principal carers of the same child, the Secretary must:
(a)make a written determination specifying one of the adults as the principal carer of the child; and
(b) give a copy of the determination to each adult.
…”
18. The Tribunal is required to make a written determination in this case specifying one of either Mr Vickers or Ms Smith to be the principal carer of Reuben.
19. Policy Guidelines have been prepared to assist decision-makers in making a determination under ss 5(18) and (19) of the Act as follows:
“1.1.P.416 Principal carer - shared care
Summary
The provisions of subsection 5(18) of the SSAct mean that only one person at a time can be the principal carer (1.1.P.412) of a child. In all shared care situations (PP, NSA, YA (job seeker) and SpB), it is necessary to determine which of the carers is the principal carer.
…
Equal care
If the difference in the level of care provided by the 2 carers is less than 10%, care is considered to be shared equally.
Example: Where care is shared 54/46% or 50/50%.
In situations of equal care where only one of the carers is claiming or receiving income support, that person should be determined as the principal carer. If both carers are claiming or receiving income support, the carer who is most in need of a favourable determination should be deemed principal carer.
·A decision maker MUST take into account the following factors when deciding which carer is in most need of a favourable determination:
·whether one carer already qualifies as principal carer of another child (see below for further detail on determinations involving more than one child),
·whether only one carer would be eligible for PP,
·which carer would receive the higher rate of payment,
·any other sources of income the carers may have, whether actual or potential, including both employment and investment income,
Note: If either carer has income that fluctuates, the assessment officer may need to look at average income levels over an extended period of time, such as 12 weeks, and
·the asset levels of each carer.
The following factors MAY be taken into consideration by the decision maker, if further information is required to make the determination:
·the expenses of each carer,
Example: Rent, child care,
·workforce experience, education levels and future employment prospects of each carer,
·the duration that each carer has been on income support and their principal carer status during this time. If there are no substantial differences between the parties, then generally the determination should be favoured which maintains the 'status quo', and
·any other factors considered relevant by the decision maker.”
20. It is conceded by the respondent (the Department) that Centrelink did not comply with s 5(19) of the Act at the time that a Parenting Payment was granted to Mr Vickers. They did not give a copy of their determination to Ms Smith. She says that she would have contested the determination had she known that Mr Vickers was found to be the principal carer of Reuben for Social Security purposes in June 2006.
the competing claims of the parties to be the principal carer of reuben
21. Both Ms Smith and Mr Vickers represented themselves before the Tribunal. They each gave evidence as to their role in caring for Reuben and each provided the Tribunal with reasons as to why they considered they should be deemed to be the principal carer for the purposes of receiving Parenting Payment.
22. The documents filed under s 37 of the Administrative Appeals Tribunal Act 1975 were received into evidence as Exhibit R1.
23. Ms Smith has seven children, three of whom are still living with her. She has shared care of Rachel and Reuben with their respective fathers. She also has a 22 year old son living with her who suffers from anxiety and depression. He is in receipt of Centrelink benefits, but he does not pay board. She appears reluctant to ask him for any board. She sees all her children regularly and she has a number of grandchildren. She has not been in the workforce for 32 years.
24. She does not have debts and she has an interest arising out of a property settlement with a former spouse. She loaned $40,000 to her brother in July 2008 and she is guaranteed a 7 percent per annum return on this investment, plus a percentage of the value of a property that her brother is renovating in Freeling. The Tribunal was provided with a copy of the relevant agreement by Ms Smith.
25. She also has approximately $20,000 in a savings account that she hopes to use to buy a car. Otherwise, her only other income comprises Social Security payments.
26. She acknowledges that the parties have had shared care of Reuben since February 2007.
27. She is 50 years of age and has some health problems. She provided the Tribunal with some documentation with respect to her health problems which appear to be long-standing back and leg pain and some mild bursitis.
28. Reuben attends Our Lady of the Sacred Heart College. Until recently, Ms Smith and Mr Vickers had been sharing the school fees, but by the time the matter came on for hearing on the second occasion, Mr Vickers had ceased making a contribution to the school fees pending the outcome of these proceedings as he could not afford to do so.
29. Ms Smith asserts that she is the more responsible parent in terms of managing money. She takes Reuben to the doctor regularly. She has also taken him to an eye specialist for treatment. She acknowledged that Mr Vickers probably also takes him to the doctor on occasions. She takes him to the school dentist.
30. She alleged that Mr Vickers works for cash as a painter and that he had told her that he had carried out painting jobs for his landlord and for his landlord’s mother in 2008. She alleged that he owned a number of cars, one being a VM Commodore on which he had spent a large sum of money. A lot of her complaint about Mr Vickers revolved around what she perceived to be his financial irresponsibility in spending money on cars and on electronic goods and on not providing for the future. She, on the other hand, considers it important to make provision for the future for her children to the extent that she is able to within her means.
31. She provided documentary evidence of payments that she makes for Reuben, including payments at the Prospect kindergarten for his care, payments for a home-based vision therapy program and other payments associated with his visual difficulties. She also pays for him to have some extra curricular music lessons.
32. She asked the Tribunal to find that she is the person who should receive the Parenting Payment for Reuben on the basis that she has greater need for that payment and will spend that payment in Reuben’s best interests. She was also adamant that Mr Vickers was not being frank with the Tribunal about his own expenditure on vehicles, about his ongoing work for cash and about the quantity of tools and equipment that he still maintained in his possession that had value and which enabled him to continue to do some painting jobs.
mr vickers’ evidence as to his care of reuben
33. Mr Vickers gave evidence to the Tribunal. He agreed that the parties had enjoyed shared care of Reuben by agreement since early 2007.
34. Mr Vickers said that he had not applied for any payments with respect to Reuben prior to his 2006 application as he was working prior to that time. He then went bankrupt and had problems with his back, neck and shoulders and he has ongoing health issues. He said that he had a job for one week in 2006, but otherwise he has not worked since 2005. He provided some medical information to the Tribunal which confirms that he suffers from neck, shoulder and lumbar spine problems.
35. He has worked as a painter, but now has medical problems as outlined. He acknowledged that when he was working he had purchased a VM Commodore vehicle from his ex-wife. He restored that vehicle and a lot of his money went into that project. He agreed he had taken out Centrelink loans to purchase some electronic goods for his home.
36. He also suffers from depression and he told the Tribunal that restoring the vehicle assisted him with that medical problem. Currently, he claims that his only assets comprise two vehicles and his household and personal effects. He was discharged from bankruptcy in November 2008. He denied the assertion put to him by Mrs Smith that he retains a lot of equipment associated with his now defunct painting business.
37. He has one child of another relationship who is 23 years of age and independent. Mr Vickers lives on his own and rents accommodation. He estimated that his loss of income per fortnight as a result of losing Parenting Payment Single is $90. He is struggling to manage with his bills.
38. He claims to take Reuben to most doctors’ appointments and he also pays for most of his haircuts. He produced a statement from Medicare Australia which confirmed a number of occasions when he had taken Reuben to a doctor between April 2006 and February 2009. Because Ms Smith does not have a car, he needs to do a lot of the driving to take Reuben to and from school and kindergarten and to affect all the changeovers. Ms Smith will not drive to his house so he bears the brunt of the driving. He estimates that his petrol costs are $50-60 per week in the week that he has Reuben with him.
39. He had wanted Reuben to attend a public school, but had eventually agreed to Ms Smith’s request that he attend a private school. He had agreed to pay half the school fees. However, he can no longer afford to make this contribution since losing Parenting Payment Single. He is currently on an exemption from applying for work for medical reasons. His only source of income is Newstart Allowance and he denied the allegations made by Ms Smith that he is or was working for cash.
40. When questioned by Ms Smith, he acknowledged that he had purchased some items for the home. He said that his painting business had collapsed as a result of stress and that he had sold his equipment and has only a small quantity of equipment left.
41. Mr Vickers said that he can no longer do significant painting as he cannot lift heavy weights or paint above his head. He has had various treatments for his injuries and would need to be retrained for any other job. He submitted that Ms Smith had more assets than him and that both parties have a low income.
42. He disputed that he had received $30,000 in a settlement as alleged by Ms Smith, but rather he received $21,000 in 2002 in a property settlement and that was spent on paying off a car loan at the time and on outstanding debts.
43. He claims to have spent only $4,500 on his vehicle over a period of five years.
44. The Tribunal noted from documents provided by Ms Smith that Reuben’s school fees and additional costs appear to amount to approximately $1,200 per annum. Ms Smith is also making payments for additional activities enjoyed by Reuben and, in particular, for guitar lessons.
45. At the resumed hearing, Mr Vickers had counsel representing him who submitted that it would be most unfair for him to face an overpayment if the Tribunal were to find that Parenting Payment Single should be paid to Ms Smith.
other relevant evidence
46. Both parties submitted documentary evidence to the Tribunal of their own outgoings and their medical situation. The Department also provided the Tribunal with a letter (Exhibit R2) which set out some further information. The Tribunal notes that Parenting Payment Single for a person is a flat rate, but is not based on the number of dependent children that a person has in their care, but that it is subject to the income and assets test which takes into account the number of dependent children a person has in their care.
47. As at 25 March 2008 when Ms Smith’s Parenting Payment Single was cancelled because of the alteration in her care arrangements for Rachel, her total Social Security entitlements per fortnight were $647.50 and she had assets of approximately $65,363. At the same time, Mr Vickers was receiving $813.84 per fortnight and had assets assessed at $14,013.00.
48. As at 17 November 2008, being the date of the SSAT’s decision, which then retrospectively granted the Parenting Payment to Ms Smith, her Social Security entitlements per fortnight increased to $850.36 with the inclusion of the Parenting Payment. Her assets appear not to be properly recorded at that point as they fail to bring to account the funds that she had invested in the property in Freeling. They were shown as being $21,500. Mr Vickers’ assets were recorded as being worth $20,010.00 at that same date. He thereafter lost around $90 per fortnight from his Social Security income.
consideration and application of the law
49. It is unfortunate that despite the frequency with which shared care arrangements are now put in place and the amendments to the Family Law Act 1975 that effectively promote shared care of children, only one of the two parents can be entitled to Parenting Payment Single. It is surprising that there is not a provision for this payment to be split equally between the parents when they provide equal care. This is a matter for legislative amendment and the Tribunal is left to make a choice between two parents who both clearly have a commitment to do the best for their son.
50. It is also regrettable that this legislation can have the effect of putting parents into conflict which can only be detrimental to the wellbeing of the child whose care they are sharing.
51. In this case, the Department failed to comply with a mandatory provision of the legislation when they granted the Parenting Payment Single to Mr Vickers in 2006 in that they failed to make the notification to Ms Smith as is required under s 5(19) of the Act. The Tribunal would anticipate that may in itself be an obstacle to the Department requesting repayment of any Parenting Payment Single from Mr Vickers if he is not successful before this Tribunal. For the purposes of this hearing, it is not relevant for the Tribunal to determine from a legal perspective the consequences of the Department failing to comply with that mandatory requirement. Suffice to say, it would be most inequitable if any repayment of Parenting Payment Single was required from Mr Vickers as a result of the SSAT decision to grant a retrospective Parenting Payment Single to Ms Smith.
52. Both parties are to be congratulated on their commitment to the wellbeing of Reuben. They both manage on limited funds, with Ms Smith being the better financial manager and also being in a superior financial position to Mr Vickers. Neither party owns their own home and each have very modest assets.
53. The criteria that the Tribunal must consider under the policy provisions looks at the other sources of income carers may have whether actual or potential, including both employment and investment income. The Tribunal must also have regard to the asset levels and expenses of each carer, including expenses for rent and child care, as well as workforce experience, education levels and future employment prospects.
54. Ms Smith has a higher income because of her interest in her investment and more assets than Mr Vickers. She has been a long-term recipient of Centrelink benefits. She has no workforce experience and minimal employment prospects, if any. She is financially responsible. She instigated the private schooling for Reuben and is now paying the private schooling costs. In addition, she pays for some elective extra activities for Reuben in accordance with her means and she is also managing to maintain a modest savings account for him. She provided evidence that she has been maintaining that account since 2006. She is slowly building up the balance in that account and she does the same for her daughter, Rachel.
55. She has an older son living with her, but it would appear that he has some health issues that make her concerned or nervous about requiring him to pay board. She is anticipating that he will soon leave home.
56. The Tribunal asked Ms Smith to approach Centrelink to ascertain her eligibility for benefits for Rachel. It appears that she is convinced that she has no additional entitlement for Rachel and has not made an approach to enquire what her position would be if she loses the Parenting Payment being paid because of her care of Reuben. It is clear that she can no longer claim Parenting Payment with respect to Rachel because of the legislative changes in 2006.
57. Mr Vickers also presents as a responsible and caring parent who has fewer assets than Ms Smith. His income appears to be less than Ms Smith’s income as he has no investments. He has not shown the same financial management skills as Ms Smith and certainly he has a love of cars that has cost him possibly more than he could really afford to spend over the years.
58. Nevertheless, the Tribunal acknowledges that he has significant costs associated with caring for Reuben and that the loss of Parenting Payment Single has affected his ability to manage accounts on a week-by-week basis. He pays a lot of petrol costs associated with managing the shared care arrangement and getting Reuben to school. Despite Ms Smith’s claim that she wants to purchase a car with her invested funds, she does not currently own a vehicle and she does not share the cost of travel associated with the shared parenting arrangement.
59. Mr Vickers is currently not working, but the Tribunal finds that it is probable that he retains a greater capacity to work than he claims and that he does do some small cash jobs within his means as alleged by Ms Smith, which supplements his Centrelink income. He conceded he had carried out a painting job for his landlord in 2008.
60. There is a greater prospect of Mr Vickers gaining limited future employment and supplementing his income than Ms Smith, although it is by no means a certainty that Mr Vickers will return to the workforce in a realistic way, given his health status. Nevertheless, the medical information about Mr Vickers was inconclusive as to how long he would suffer neck and back symptoms.
61. The purpose of Parenting Payment Single is to assist a person in the financial cost of caring for a child.
62. The Tribunal is satisfied that the Parenting Payment Single in the hands of either Mr Vickers or Ms Smith will be used for the benefit of Reuben and the Tribunal does not accept Ms Smith’s criticism that Mr Vickers is profligate and that funds in his hands may be wasted on items such as electronic goods or vehicles. People have their different pleasures in life and, although Mr Vickers acknowledges that he has spent funds on his vehicle and on electronic goods, there is no doubt that he also properly and adequately cares for Reuben when in his care and has only recently ceased making the school payments because of his loss of Parenting Payment Single.
63. Ms Smith has a very good record in terms of money management and she is now paying all the school fees and extra costs for Reuben and will continue to do so as she believes it is important that Reuben has a private education.
64. The Tribunal is satisfied that on an ongoing basis, Ms Smith will continue to carry the expense of the bulk of Reuben’s education and extra curricular costs and that the modest amount per fortnight that she receives from Parenting Payment Single will go towards these costs. It would be reasonable if the parties could agree in the circumstances that Mr Vickers not have to contribute to school fees and associated costs, given the extra funds being received by Ms Smith from the Government. Nevertheless, this is a matter for discussion between the parties and not a matter for this Tribunal.
65. The Tribunal finds the decision a very difficult one to make. Both parties are equally good and committed parents and both have limited means with Mr Vickers, on the face, having less means than Ms Smith. Nevertheless, Ms Smith does have another child to support as well and has never worked. The Tribunal notes the suggestion in the Guide that the status quo should be maintained unless there is good reason to change it.
66. Bearing in mind the expenses born by Ms Smith, the probability that Mr Vickers can do some work to supplement his income and the current status quo, the Tribunal is of the view that the SSAT decision should stand and Ms Smith should continue to be the parent who receives Parenting Payment Single.
67. The Tribunal sees no logic in the retrospective granting of the allowance to Ms Smith by the SSAT and would have thought that a reasonable approach was for the SSAT, if it felt that the determination should be made in favour of the other parent, to make the determination effective from that point in time, rather than creating an overpayment situation for Mr Vickers. If the Tribunal were to vary the SSAT decision such that Ms Smith’s entitlement commenced at the date of decision, it will create the complexity of Ms Smith facing an overpayment.
68. The Tribunal’s view is that the most effective course is to affirm the SSAT decision under review and determine that the Parenting Payment Single should continue to be paid to Ms Smith while the parties’ current circumstances prevail. The Tribunal determines that for the purposes of Parenting Payment single, she is the principal carer.
69. Although the Tribunal has no determinative power with respect to the issue, the Tribunal hopes that there would be no overpayment raised against Mr Vickers in the circumstances and if such a payment was raised, then the failure of the Secretary to comply with the requirement of s 5(19)(b) of the Act when the original decision was made to grant Parenting Payment Single to Mr Vickers may be a significant issue to consider in any review process.
The Tribunal affirms the decision under review.
I certify that the 70 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member L Hastwell
Signed: .............J Coulthard..........................................
AssociateDates of Hearing 10 March 2009 & 18 May 2009
Date of Decision 17 July 2009
Advocate for the Applicant Self represented (on 10 March 2009)
Counsel for the Applicant Ms H Mares (on 18 May 2009)
Solicitor for the Applicant Bourne Lawyers
Advocate for the Other Party Self representedAdvocate for the Respondent Ms L Giaretto
Centrelink Legal Services & Procurement Branch
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