Chambers and Secretary, Department of Employment and Workplace Relations and Anor
[2006] AATA 611
•10 July 2006
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2006] AATA 611
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W2006/9
GENERAL ADMINISTRATIVE DIVISION ) Re ROBERT BRUCE CHAMBERS Applicant
And
SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS
Respondent
And
TRACY SHEILA CHAMBERS
Joined Party
DECISION
Tribunal Deputy President S D Hotop Date10 July 2006
PlacePerth
Decision The Tribunal affirms the decision under review.
.....(Sgd S D Hotop)..........
Deputy President
CATCHWORDS
SOCIAL SECURITY – parenting payment (PP) – applicant and joined party parents of child – joined party granted PP in April 2005 – applicant claimed PP in July 2005 – applicant’s claim rejected – applicant and joined party share care of child equally – consideration of financial circumstances of applicant and of joined party – consideration of Centrelink policy guideline – child is PP child of joined party – joined party qualified for PP – applicant not qualified for PP – decision under review affirmed
Social Security Act 1991 (Cth) s 500, s 500D and s 500E
Guyder v Secretary, Department of Social Security (1998) 49 ALD 13
Secretary, Department of Family and Community Services v Holmes (2000) 98 FCR 461
REASONS FOR DECISION
10 July 2006 Deputy President S D Hotop Introduction
1. Robert Bruce Chambers (“Mr Chambers”) and Tracy Sheila Chambers (“Mrs Chambers”) have a son, Samuel Blake Chambers (“Samuel”), who was born on 5 August 2003. Neither Mr Chambers nor Mrs Chambers has any other child.
2. Mr Chambers and Mrs Chambers separated in early October 2004.
3. Mrs Chambers subsequently lodged with Centrelink a claim for parenting payment (“PP”) under the Social Security Act 1991 (Cth) (“the Act”). Her claim was granted, with effect from 1 April 2005, and parenting payment has been paid to her, at the “pension PP single rate” in accordance with s 1068A of the Act, with effect from that date.
4. On 15 July 2005 Mr Chambers lodged with Centrelink a claim for parenting payment under the Act. On 1 August 2005, however, an officer of Centrelink rejected Mr Chambers’ claim and Mr Chambers was so notified by letter dated 3 August 2005. That decision was subsequently affirmed by an Authorised Review Officer within Centrelink on 23 September 2005 and by the Social Security Appeals Tribunal (“SSAT”) on 6 January 2006.
5. Mr Chambers has applied to this Tribunal for a review of the decision of the SSAT.
The Issue and the Tribunal’s Determination
6. The issue for the Tribunal’s determination is whether Mr Chambers is qualified for PP under Pt 2.10 of the Act.
7. For the reasons which follow, the Tribunal has determined that Mr Chambers is not qualified for PP under Pt 2.10 of the Act.
The Relevant Legislation
8. Part 2.10 of the Act, as in force at all material times, contained the following relevant provisions regarding qualification for PP:
“Qualification for parenting payment
500(1) A person is qualified for parenting payment if:
(a) the person has at least one PP child (see sections 500D to 500H); and
(b) the person is an Australian resident; and
(c) the person satisfies any requirement to enter into a participation agreement that applies to the person under Division 2; 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 (see subsections (2) and (3));
(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.
...
PP Child
500D(1) A PP child of a person is a child who:
(a) is a dependent child of the person; and
(b) has not turned 16.
Note: For dependent child see subsections 5(2) to (9).
500D(2) For the purpose of determining whether a child is a PP child of a person, the child is taken to remain in the person’s care if:
(a) at the start of a period not exceeding 8 weeks, the child leaves the person’s care; and
(b) throughout the period, the child is the PP child of another person; and
(c) the child returns, or the Secretary is satisfied that the child will return, to the first person’s care at the end of the period.
Note: The definition of dependent child in subsection 5(2) requires a young person to be in an adult’s care.
500D(3) Subsection (2) does not, by implication, affect the determination of whether a child is in the care of a person in cases to which the subsection does not apply (for example, if the period exceeds 8 weeks).
Child to be a PP child for only one person
500E(1) A child can be a PP child of only one person at a time.
500E(2) If the Secretary is satisfied that, but for this section, a child would be a PP child of 2 or more persons (adults), the Secretary must:
(a) make a written determination specifying one of them as the person in relation to whom the child is to be a PP child; and
(b) give each adult who has claimed parenting payment a copy of the determination.
500E(3) The Secretary may make the determination even if all the adults have not claimed parenting payment.
...”
The Relevant Centrelink Policy Guidelines
9. Paragraph 3.5.1.50 of the Guide to Social Security Law, produced by the (former) Department of Family and Community Services and applied by officers of Centrelink, relevantly states:
“3.5.1.50 Child-related Qualification for PP - Shared Care
Summary
The provisions of section 500E mean that a child can ONLY be a PP child of one person at a time. In all shared care situations, it is necessary to determine which of the carers has the PP child.
Explanation: If the child in question is the only potential PP child of a person who is otherwise qualified for PP, this determination will be crucial to the person establishing qualification for PP.
Example: A couple have separated and have joint legal responsibility (1.1.L.33) for, and share the care of, their natural child who is under 16. Such a child would satisfy section 500D for both parents even if only one of them claimed PP. However, section 500E requires that a determination be made stating which person has the PP child.
...
One person provides greater degree of care
As the terms of section 500E do not list any specific criteria that should or should not be taken into account in making a determination, all the circumstances of each case need to be considered. However, given that qualification for PP is based upon having the care of a child, it will generally be appropriate to decide that the child is a PP child of the person who is providing the greater degree of care, EVEN if that person has not claimed PP.
...
Equal care - overview
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%.
The main factors to be considered in deciding who has the PP child in this situation are listed in the table below.
If...
Then the child should be determined as a PP child of the carer who...
only ONE of the carers is claiming or receiving PP ,
is claiming or already receiving PP.
EACH carer is claiming PP, but only ONE is RELIANT on a favourable determination to qualify,
is reliant on the favourable determination.
Example: The other carer has another PP child (e.g. from another relationship) so is not reliant on a favourable determination in respect of the child involved in this determination.
Exception: Please see guidelines later in this topic under the heading 'Equal care - same decision applies to each child'.
EACH carer is claiming PP and BOTH are RELIANT upon a favourable determination to qualify,
would receive the higher rate of PP. This should be assessed by comparing the rate of PP that would be payable to each person.
Explanation: The relative financial circumstances of both carers are the basis for the decision.
If...
Then the child should be determined as a PP child of the carer who...
the difference in the rate of PP that would be paid to the 2 carers is:
- less than $10 per fortnight, and
- one of them has been receiving PP in relation to the child continuously for a reasonable period of time, usually 13 weeks or more,
is already receiving PP for the child.
Example: One customer is currently receiving PP and the other person recently lodged a claim. E.g. Mary and John are separated and equally share the care of their daughter Cathy. Mary has been receiving PP since April 1998, and John lodges a claim for PP in October 1998. The rate that would be payable to John is approximately the same as that being paid to Mary. It is fair to argue that a decision that cancelled Mary's payment would have a more significant impact than a decision to reject John's claim. Therefore Mary should continue to be specified as the person in relation to whom Cathy is a PP child.
Explanation: This approach is based on an assessment of the impact a decision has on each of the carers. Generally a decision that maintains the 'status quo' is preferable to one that changes the situation.
...”
The Evidence
10. The Tribunal had before it the “T Documents” (T1-32, pp 1-122) lodged by the respondent in accordance with s 37 of the Administrative Appeals Tribunal Act 1975 (Cth). Oral evidence was given by Mr Chambers and Mrs Chambers who each also tendered certain documentary exhibits in evidence.
Mr Chambers
11. Mr Chambers gave the following evidence.
12. In the period since October 2004 when he and Mrs Chambers separated, the care of Samuel has been shared equally between them (except for the period from 21 March 2005 to 31 May 2005, when Mrs Chambers provided a substantially greater degree of care).
13. In recent years he had been teaching, on a casual basis, at a TAFE college but his most recent teaching contract ended on 30 June 2005. He then applied to Centrelink for newstart allowance (“NSA”) and PP, and he was granted NSA (but not PP). He received NSA from July 2005 until January 2006.
14. In January 2006, however, he ceased claiming NSA because he chose to spend his care time with Samuel rather than to make himself available for full-time work.
15. He owned a house in Belmont where he lived until March 2003, when he and Mrs Chambers were married, at which time he moved into Mrs Chambers’ house at Yokine. He then rented out his Belmont house for approximately $120.00 per week (net). When he and Mrs Chambers separated in October 2004, he moved into a rental property (for which he paid $160.00 per week in rent) and he lived there until February 2006. In the meantime he sold his Belmont house (which was not mortgaged) for $225,000.00 in December 2005 and in February 2006 he bought a duplex in Osborne Park for $297,000.00 (approximately $310,000.00 including expenses) using the proceeds of the sale of his Belmont house and a loan of $90,000.00 from his mother. The Osborne Park duplex is not mortgaged.
16. Since February 2006 he has been living off the surplus of approximately $5,000.00 remaining from the loan from his mother, supplemented by “a little bit” of casual tutoring for which he receives $22.00 per hour. He described his present income as “very low”.
Mrs Chambers
17. Mrs Chambers gave the following evidence.
18. She is qualified as a registered nurse and, prior to meeting Mr Chambers in May 2002, earned $50,000.00 - $70,000.00 per annum. She subsequently reduced her work commitments to 3 days per week and was then earning approximately $35,000.00 per annum, and these arrangements continued after she and Mr Chambers were married and also after Samuel was born.
19. When she and Mr Chambers separated in October 2004 they were each working 3 days per week, and they decided to share the care of Samuel between them on a 50/50 basis.
20. In April 2005, however, she decided to take one year’s leave without pay from her employment as a nurse because, owing to the problems in her personal life (including Family Court proceedings), she felt that she was unable to function effectively in her professional life.
21. She then applied to Centrelink for PP and her application was granted, and she has been in receipt of PP and family tax benefit (“FTB”) from April 2005. She has received $440.00 - $460.00 per fortnight by way of PP and $68.00 per fortnight by way of FTB.
22. From April 2005 to July 2005, she did not work and she relied entirely on her PP and FTB payments, together with an equity loan secured on her house, for payment of her living expenses. From July 2005 to January 2006 she also did casual work as a nurse and earned approximately $7,500.00 in that period. In April 2006 she renegotiated her work contract and is now working as a Level 1 nurse for 8 hours per week and her rate of pay is $27.00 - $29.00 per hour. The nature of her work provides “great flexibility” in her choice of work shifts and she hopes to increase her working hours in the future.
23. She owns a house in Yokine whose value, in the current real estate market, is probably about $600,000.00. The house is mortgaged and her mortgage payments are $500.00 per fortnight.
Documentary material
24. An Affidavit of Mr Chambers filed in the Family Court of Western Australia on 25 November 2005 states (inter alia):
“...
Financial Support
198. I had an income of approximately $32,000.00 gross in the last financial year.
199. At the present time I am receiving approximately $350.00 per week in Centrelink benefits.
200. I anticipate my future income will return to previous higher levels.
201. I pay $160.00 rent per week.
202. I am able to maintain Sam from my income.
...” (T30, p 109)
25. An Application for Consent Orders filed in the Family Court of Western Australia by Mrs Chambers on 19 August 2005 stated that (inter alia):
·the estimated total net worth of Mrs Chambers was then $286,112.33;
·the estimated total net worth of Mr Chambers was then $138,823.00. (Exhibit A3)
26. A Loan Agreement dated 24 January 2006 between Mr Chambers and his mother, Margery Claire Chambers, whereby the latter agreed to lend to Mr Chambers the sum of $90,000.00 towards the purchase of an Osborne Park property (see paragraph 15 above), provides that (inter alia):
·the loan is interest free;
·periodic repayments of the loan are not required during the first 12 months;
·periodic repayments “may commence after this time at the discretion of the Lender”. (Exhibit JP1)
The Submissions
Mr Chambers
27. Mr Chambers’ submission, in essence, was that he is qualified for PP, instead of Mrs Chambers, because he shares the care of Samuel equally with Mrs Chambers and his financial circumstances have at all material times been substantially less favourable than those of Mrs Chambers in that:
·Mrs Chambers has earned, and is able to earn, a substantially higher income than he has earned or is able to earn; and
·Mrs Chambers’ total net worth has always been, and continues to be, substantially greater than his total net worth.
He submitted, furthermore, that, by reason of the very flexible working hours available to Mrs Chambers, she has always been, and continues to be, readily able to organise her weekly working hours around her commitment of providing 50% of Samuel’s care, whereas he presently has “no work, no income support and no readily available employment options to fit in with Samuel’s care times”. In short, Mr Chambers submitted that he has, at all material times, been in greater financial need of PP than Mrs Chambers, and that a decision not to grant PP to him would have a more severe adverse financial impact on him than a decision to cancel Mrs Chambers’ PP would have on her.
Mrs Chambers
28. Mrs Chambers agreed that the care of Samuel is shared equally between Mr Chambers and herself and she acknowledged that her earning capacity has “historically” always been much greater than that of Mr Chambers and that she has a greater asset net worth than Mr Chambers. She submitted, however, that her expenses (including mortgage repayments of $500.00 per fortnight) have always been substantially greater than those of Mr Chambers and that she has the greater financial need to receive PP. She further submitted that a decision now to cancel her PP (which she has received since April 2005), and to grant PP to Mr Chambers (with effect from July 2005) – necessarily involving an overpayment of PP to her from July 2005 to date and an obligation on her to repay the total amount of that overpayment to Centrelink – would have a more severe adverse financial impact on her than a decision not to grant PP to Mr Chambers would have on him.
The respondent
29. The respondent submitted that the preferable determination in the circumstances of this case is that Samuel is the “PP child” of Mrs Chambers, for the purposes of ss 500(1) and 500E of the Act, and that Mr Chambers is not qualified for PP.
Analysis
30. There is no dispute that Samuel is a “dependent child” of each of Mr Chambers and Mrs Chambers and that, subject to s 500E of the Act, Samuel would be a “PP child” of each of them and each of them would satisfy the qualifying requirements of s 500(1) of the Act.
31. Section 500E(1) of the Act, however, provides that a child can be “a PP child of only one person at a time”, and s 500E(2) requires the respondent (and, on review, the Tribunal), if satisfied that, but for that section, a child would be “ a PP child of 2 or more persons”, to “make a written determination specifying one of them as the person in relation to whom the child is to be a PP child”. It follows that only the person so specified may be qualified for PP pursuant to s 500(1) of the Act.
32. In the present case the Tribunal is satisfied that, but for s 500E(1) of the Act, Samuel would be a “PP child” (within the meaning of ss 500(1) and 500D of the Act) of both Mr Chambers and Mrs Chambers. The Tribunal is, therefore, required, pursuant to s 500E(2) of the Act, to determine which of them is “the person in relation to whom [Samuel] is to be a PP child”.
33. Section 500E(2) of the Act, however, does not prescribe any criteria or, indeed, provide any guidance regarding the making of an appropriate determination under that subsection. The function of the decision-maker in these circumstances was explained by the Federal Court of Australia (Gyles J) (in relation to the former equivalent legislative provision regarding sole parent pension) in Secretary, Department of Family and Community Services v Holmes (2000) 98 FCR 461 at 467:
“...In those circumstances, the Secretary, and the Tribunals on appeal, have the invidious task of choosing between those persons in circumstances where the legislation does not provide a criterion or criteria.
This is a discretion constrained only by the purposes of the Act and the provisions of it relating to Sole Parent Pensions: O'Sullivan v Farrer (1989) 168 CLR 210 at 216. The section does not oblige the decision-maker to take any particular matter into account, and only prohibits taking into account those matters which are not relevant to the purposes of the Act. Within those very broad limits, it is a matter for the exercise of discretion by the decision-maker which cannot be controlled by a court dealing with errors of law: Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39-42 per Mason J. Thus it is that one decision-maker might prefer the apparent objectivity of deciding on the basis of hours of custody, another might also take into account qualitative factors and yet another might also take into account the financial circumstances of the parties. If there is any relevant government policy guidance, then appropriate regard should be paid to it. It is, in circumstances such as the present, a matter for decision by the Administrative Appeals Tribunal, as it has the ultimate say on the merits of the decision…”
34. In the present case it was common ground that, at all material times, Mr Chambers and Mrs Chambers have shared the legal and factual custody, care and control of Samuel on an equal basis, and that they have shared and discharged equally the responsibility of providing the necessities of life and the best possible quality of life to Samuel.
35. The matter that was primarily in dispute between Mr Chambers and Mrs Chambers was their respective financial circumstances. Each claimed to be in the greater financial need of PP and each claimed that an adverse decision regarding PP would have a more severe financial impact on him/her than it would on the other party.
36. The Tribunal accepts that the financial position of each of Mr Chambers and Mrs Chambers is a relevant consideration for the purpose of determining which of them is “the person in relation to whom [Samuel] is to be a PP child”, as required by s 500E(2) of the Act: Guyder v Secretary, Department of Social Security (1998) 49 ALD 13; Secretary, Department of Family and Community Services v Holmes (above). Indeed, the parties presented their respective cases to the Tribunal on the basis that the respective financial positions of Mr Chambers and Mrs Chambers should be regarded as the determining factor in this case. As indicated above, however, Mr Chambers submitted that a consideration of his financial circumstances should necessarily determine the matter in his favour, while Mrs Chambers submitted that a consideration of her financial circumstances should necessarily determine the matter in her favour.
37. The Tribunal accepts that, at all material times, Mrs Chambers’ earning capacity and asset net worth (mostly comprising the value of her home) have been significantly greater than those of Mr Chambers. The Tribunal notes, however, that, since April 2005, Mrs Chambers has chosen not to exercise her earning capacity fully but rather to rely on PP and FTB, supplemented by casual earnings, to pay for her living expenses (which include mortgage repayments of $500.00 per fortnight). The Tribunal accepts, therefore, that Mrs Chambers’ actual financial circumstances, in terms of her income and living expenses, have, since April 2005, not been comfortable.
38. As regards Mr Chambers, the Tribunal notes that at the time he applied for PP in July 2005 he was in receipt of NSA and FTB, owned a rental property (which was unencumbered) in respect of which he received $120.00 (net) per week in rent, rented a property for $160.00 per week, and, according to his Affidavit filed in the Family Court of Western Australia on 25 November 2005 (T30), was able to maintain Samuel from his income. The Tribunal also notes that in January 2006 Mr Chambers chose to discontinue his NSA and FTB and he bought a house in February 2006 (having sold his abovementioned rental property in December 2005) which is unencumbered but whose purchase was partly financed by a loan of $90,000.00 from his mother – a loan in respect of which no repayments are due before January 2007 and then only at the discretion of his mother. He also earns some income from casual tutoring.
39. There is no suggestion in the material before the Tribunal that Mr Chambers has, at any time, been unable, because of financial considerations, to fulfil his responsibilities regarding the care and welfare of Samuel. The Tribunal is satisfied, furthermore, that it has been open to Mr Chambers, if necessary, at least to obtain NSA and FTB (as he did from July 2005 to January 2006), if not to earn a substantial income from TAFE teaching.
40. Having regard to the financial circumstances of Mr Chambers, the Tribunal is satisfied that those circumstances are such that Mr Chambers has, at all material times, been able to fulfil his responsibilities regarding the care and welfare of Samuel on a shared 50/50 basis with Mrs Chambers. The Tribunal, furthermore, is not satisfied that Mr Chambers’ financial circumstances, as compared with those of Mrs Chambers, are such as to make it appropriate now to determine, pursuant to s 500E(2) of the Act, that he, rather than Mrs Chambers, is “the person in relation to whom [Samuel] is to be a PP child”.
41. It is, as Gyles J indicated in Secretary, Department of Family and Community Services v Holmes (above), appropriate for the Tribunal also to have regard to “any relevant government policy guidance”. The relevant Centrelink policy guideline, for the purposes of the present case, is set out in para 3.5.1.50 of the Guide to Social Security Law (see paragraph 9 above). According to that guideline, in a case (such as the present case) where the care of the relevant child is shared equally between 2 carers, if:
·the difference in the rate of PP that would be paid to the 2 carers is less than $10.00 per fortnight; and
·one of them has been receiving PP in relation to the child continuously for a reasonable period of time, usually 13 weeks or more;
then the child should be determined as a PP child of the carer who is already receiving PP for the child. The guideline goes on to explain that the abovementioned approach is based on “an assessment of the impact a decision has on each of the carers” and that “generally a decision that maintains the ‘status quo’ is preferable to one that changes the situation”.
42. There is no dispute that the circumstances of the present case satisfy the 2 preconditions expressed in the abovementioned guideline in that:
·Mrs Chambers has at all material times been in receipt of the maximum single rate of PP (see T11), and, accordingly, there would be no difference in the rate of PP that would be paid to Mrs Chambers and to Mr Chambers because he would also be paid the maximum single rate of PP;
·Mrs Chambers had been receiving PP in relation to Samuel continuously since 1 April 2005 – that is, for a period of 15 weeks before Mr Chambers lodged his claim for PP on 15 July 2005.
43. The Tribunal is satisfied that, given that Mrs Chambers has been receiving PP at the maximum “pension PP single rate” since 1 April 2005, and that Mr Chambers has never received PP, a determination by it, pursuant to s 500E(2) of the Act, that Mr Chambers is “the person in relation to whom [Samuel] is to be a PP child”, resulting in the cancellation of Mrs Chambers’ PP and the grant of PP to Mr Chambers with effect from 15 July 2005 or a later date, would have an immediate substantial adverse financial impact on Mrs Chambers – an impact that would, in the Tribunal’s opinion, be significantly greater than the financial impact a contrary determination favouring Mrs Chambers would have on Mr Chambers.
44. The Tribunal notes that a decision to grant PP to Mr Chambers (with effect from 15 July 2005) and to cancel Mrs Chambers’ PP would necessarily involve the conclusion that Mrs Chambers had been overpaid PP from 15 July 2005. It seems to the Tribunal, however, that it is very doubtful that the amount of such an overpayment would be recoverable from her under Chapter 5 of the Act. Because of the uncertainty regarding this matter, the Tribunal does not attach any weight to it for present purposes.
Conclusion and Determination
45. Having regard to the circumstances of the present case the Tribunal concludes that it would be appropriate to apply the abovementioned Centrelink policy guideline. The Tribunal is not satisfied that the application of that guideline would result in unfairness or injustice, or that there is any other cogent reason for not applying that guideline, in the present case. On the contrary, in the Tribunal’s opinion the application of that guideline in this case would lead to a fair and just result.
46. Accordingly the Tribunal determines, pursuant to s 500E(2) of the Act, that, at all material times, Mrs Chambers is “the person in relation to whom [Samuel] is to be a PP child”. It follows from that determination that, at all material times, Mrs Chambers has been qualified for PP in respect of Samuel, and that, at all material times, Mr Chambers has not been qualified for PP in respect of Samuel.
Decision
47. For the above reasons, the Tribunal affirms the decision under review.
I certify that the 47 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President S D Hotop
Signed: ..........(Sgd S da Motta)............................
AssociateDate/s of Hearing 19 May 2006
Date of Decision 10 July 2006
Representative of the Applicant In personRepresentative of the Respondent Mr A Holt
Service Recovery TeamCentrelink
Representative of the Joined Party In person
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