Cohen and Secretary, Department of Education, Employment and Workplace Relations and Strum (Joined Party)

[2010] AATA 985

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 985

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2010/2918

GENERAL ADMINISTRATIVE DIVISION		)
Re		Deborah Cohen

Applicant

And Secretary, Department of Education, Employment and Workplace Relations

Respondent

And   Simon Strum

Joined Party

DECISION

Tribunal Senior Member Jill Toohey

Date8 December 2010

PlaceSydney

Decision The decision under review is affirmed.

..................[sgd]............................

Senior Member

CATCHWORDS

SOCIAL SECURITY – parenting payment – parents separated - shared care of son – which parent the principal carer – which parent in greater need of favourable decision – relevant factors for consideration - evidence that father meeting greater share of costs for son – parents’ employment prospects – father in greater need of favourable decision - father the principal carer – decision under review affirmed

Administrative Appeals Tribunal Act 1975, s 30

Social Security Act 1991, ss 5, 500,

Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634

REASONS FOR DECISION

8 December 2010	Senior Member Jill Toohey
Introduction

1.      This matter concerns parenting payment for Jason Strum, the four-year old son of Deborah Cohen and Simon Strum. 

2.      Ms Cohen and Mr Strum separated in March 2007 and later divorced.  In September 2007, Ms Cohen started receiving parenting payment. 

3.      On 29 May 2009, orders were made in the Federal Magistrates Court by which Jason would live with his father from Saturday at 9am to Wednesday at 5pm in one week, and from Sunday at 9am to Wednesday at 5pm every other week; the rest of the time he would live with his mother.

4.      On 17 December 2009, Mr Strum applied for parenting payment, claiming that he was Jason’s principal carer.  Centrelink decided that Ms Cohen was the principal carer and rejected Mr Strum’s application. 

5.      Mr Strum sought review of that decision by the Social Security Appeals Tribunal (SSAT).  On 17 June 2010, the SSAT decided that he had been Jason’s principal carer since 17 December 2009 and, subject to meeting other eligibility criteria, was entitled to parenting payment from that date. 

6. Ms Cohen seeks review of the SSAT’s decision. By s 30(1A) of the Administrative Appeals Tribunal Act1975, Mr Strum has been made a party to the proceeding.

Legislation and policy

7.      Parenting payment is paid in accordance with the Social Security Act 1991 (the Act).  To be eligible, a person must satisfy the criteria in s 500 of the Act.  In particular, she or he must have at least one PP child: s 500(1)(a). 

8.      Section 500D(2) provides that a child is a PP child of a person if:

(a)the child is a child of the person;

(b)the person is not a member of a couple;

(c)the child has not turned 8; and

(d)the person is the child’s principal carer.

9.      A child can only have one principal carer at a time for the purposes of parenting payment.  This is so even where parents have joint legal responsibility for the day-to-day care, welfare and development of a child.  In such a case, the Secretary must determine in writing which is the principal carer of the child: ss 5(18) and (19).

10.     The Act does not specify how the Secretary is to determine which of two persons is a child’s principal carer.  However, guidance is found in the form of the Guide to Social Security Law (the Guide) which Centrelink issues to its officers to assist in making determinations under the Act. 

11.     The Guide is a policy document but it is well-settled that the Tribunal should apply policy unless there are cogent reasons in a particular case not to: Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 639-645.

12.     The relevant principles in the Guide as they apply to this case are at 1.1.P.416.  They are as follows:

(i)if the difference in level of care provided by two parents is less than ten per cent, care is considered to be equal;

(ii)in situations of equal care, if one parent is claiming or receiving income support, she or he shall be deemed to be the principal carer;

(iii)if both carers are claiming or receiving income support, the person who is more in need of a favourable determination shall be deemed to be the principal carer.

13.     In determining which parent is more in need of a favourable determination, the decision maker must take into account the following factors:

(i)whether one parent already qualifies as principal carer of another child;

(ii)whether only one parent would be eligible for parenting payment;

(iii)which parent would receive the higher rate of parenting payment;

(iv)any other sources of income the parents may have, whether actual or potential, including both employment and investment income; and

(v)the asset levels of each parent.

14.     In making the same determination, the decision maker may take into account the following factors:

(i)the expenses of each parent (example: rent, child care);

(ii)workforce experience, education levels and future prospects of each parent;

(iii)the duration that each parent 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 that maintains the status quo; and

(vi)any other factors considered relevant by the decision-maker.

The issue

15.     I have to decide which of Jason’s parents his principal carer is for the purposes of parenting payment.

Background

16.     Ms Cohen and Mr Strum agree that they care for Jason generally in accordance with the orders made in May 2009.  The effect of the orders is that they have Jason for an equal number of nights in a fortnight but he is with Mr Strum for nine of the 14 days in each fortnight.  Thus, he is in Mr Strum’s care for 184 hours each fortnight, or 54% of the time, and in Ms Cohen’s care for 152 hours, or 46% of the time. 

17.     Mr Strum concedes that this difference, in percentage times, is less than ten per cent which means, applying the Guide, that he and Ms Cohen have equal care of Jason. 

18.     Ms Cohen and Mr Strum agree that, as they have equal care of Jason, the question of which of them is his principal carer for the purposes of parenting payment turns on who is more in need of a favourable determination.

19.     Ms Cohen’s and Mr Strum’s respective financial positions have been the subject of proceedings in the Federal Magistrates Court, before the Child Support Agency and the SSAT, and before this tribunal. 

20.     Throughout the various proceedings, Ms Cohen and Mr Strum have each claimed to have little or no income, and no assets to speak of.  Each has asserted that the other has substantial undisclosed assets.  Neither has produced evidence of any substance to support their claims about the other.   

21.     Ms Cohen and Mr Strum agree that the SSAT decision accurately sets out the evidence they gave before that tribunal.  Each agreed that they had no new evidence to submit to this tribunal and there was little point in restating the claims and counterclaims they have made previously.  These reasons therefore reflect the evidence they gave before the SSAT and their submissions to this tribunal.

22.     Ms Cohen left the hearing shortly before it concluded, saying she was unwell. I am satisfied that, by then, she and Mr Strum had had the opportunity to state any additional evidence and make any further submissions. The hearing continued for a short time after she left and I am satisfied that she was not disadvantaged in any way by concluding the hearing in her absence.  

Ms Cohen’s and Mr Strum’s financial positions generally

23.     Ms Cohen lives in a duplex in Dover Heights built by her parents.  She does not pay rent.  She gave her parents approximately $263,000 from her savings in 2007 when they were building the property.  I note that, whereas she told the SSAT that she gave her parents the money because they needed funds to finish the building, she told this tribunal that the money was rent in advance.  She estimates the building is worth approximately $1.5 million; her name is not on the title. 

24.     Ms Cohen worked for many years in her family’s business but says she has not worked since June 2007 and has no income from employment.  Mr Strum alleges she is working in the family business; he says her mother has told him Ms Cohen spends up to six hours each day at the business but she is only there to socialise.  Ms Cohen does not deny spending time at the family business but denies that she is employed.  She plans to return to work in 2012 when Jason goes to school.

25.     At the time of the SSAT hearing, Ms Cohen’s only income was parenting payment.  She maintains she has had no income since payment was transferred to Mr Strum in December 2009.  Her parents meet all her household costs.  She owns a motor vehicle which her parents bought new approximately three years ago which she estimates is worth about $35,000.  She has household goods worth approximately $6000.

26.     Mr Strum alleges Ms Cohen is a beneficiary of a family trust from which she receives approximately $50,000 each year.  She denies this but I note from the SSAT decision that the Child Support Agency had found Ms Cohen had received investment income of $10,169 in 2007-2008 which she had not declared in her income tax return.  The SSAT noted that Ms Cohen had not objected to the Agency’s decision that she should pay child support to Mr Strum and found she had received that income.

27.     Mr Strum lives with his mother in a house she owns in Dover Heights.  He does not pay board or rent and makes a small contribution to household expenses. 

28.     From 2003, Mr Strum owned and operated a Subway franchise.  He sold the business to his brother in 2009 when his mother was terminally ill with emphysema and needed full time care.  He has lived with her and cared for her since.  At the same time, he was looking after Jason more, and a shoulder injury had made it difficult for him to work.  He claims the proceeds of the sale of the business were mostly exhausted by debts and legal fees and he used the balance on living expenses in the period to December 2009 when he started receiving parenting payment. 

29.     Since December 2009, his only income has been parenting payment.  (It is not clear whether he receives any other Centrelink benefit, such as carer’s payment as well).

30.     Mr Strum says his only assets are a motor vehicle worth $3000-$5000 and household goods worth $5000.  He has been offered $2000 in settlement of a workers compensation claim for his shoulder injury but hopes to receive more like $25,000.  He has a credit card debt of $2500 (at the time of the SSAT hearing).

31.     Ms Cohen claims that, during their marriage, Mr Strum owned five investment properties as well as shares worth $400,000.  She claims he has transferred these into his mother’s name.  I note that Ms Cohen conceded at the SSAT that Mr Strum may no longer own the properties but still maintained that he had transferred shares to his mother.

32.     Mr Strum denies owning shares or properties any longer, or transferring either into his mother’s name.   He claims all were purchased with loans and were subject to security; he sold them around the time the marriage ended and he was left with little after repaying loans over the shares and the properties.  It is not clear what happened to any residual, but there is no evidence that he retains any funds from the sale.

Who is more in need of a favourable determination

33.     It is beyond the scope of these proceedings to investigate the truth of all of the claims and counter-claims made by Ms Cohen and Mr Strum.  Neither has presented any evidence in support of their claims about the other’s financial position.  I have to go on the best evidence available to the Tribunal. 

34.     The evidence leads me to much the same conclusions reached by the SSAT: that Ms Cohen and Mr Strum both live rent-free in houses owned by their parents; both are supported to some extent by their parents; neither holds assets to speak of; Mr Strum is reliant on Centrelink for his income; Ms Cohen has received investment income in the past; she has no income at present from employment.

35.     Having said that, for the following reasons I am satisfied that Mr Strum is more in need of a favourable determination than Ms Cohen.

36.     Turning now to the factors to which a decision-maker is required to have regard: neither Ms Cohen nor Mr Strum already qualifies as principal carer of another child, and both are eligible for parenting payment.  Nothing turns on either of these factors.

37.     The question of which parent would receive the higher rate of parenting payment is very difficult to determine because of the conflicting evidence and the allegations each makes about the other’s financial position.  On the face of it, it appears that both Ms Cohen and Mr Strum may be entitled to the full amount of parenting payment.  In the absence of evidence to the contrary, I will assume that is the case. 

38.     As noted above, I am satisfied that Ms Cohen has received investment income in the past.  There is no evidence that she is receiving such income now and she denies being the beneficiary of a family trust. 

39.     However, it is not clear what Ms Cohen has lived on since her parenting payment stopped in December 2009.  She apparently receives substantial financial and in-kind support from her parents.  She lives in a house built by them which, for all practical purposes, appears to be hers even though there is no evidence that she has a legal interest in the property.  She has been able to travel overseas since these proceedings commenced.  Her parents have provided her with a new motor vehicle and they apparently meet all her household expenses.  There is nothing to suggest that she cannot continue to live in the house indefinitely and nothing to suggest that her parents will cease their considerable financial support in the foreseeable future. 

40.     Although Mr Strum also receives support from his mother in the form of rent-free accommodation, he does not appear to have the same kind of financial support that Ms Cohen has from her parents.

41.     I accept that neither Ms Cohen nor Mr Strum has legal ownership of any assets to speak of, although she has a motor vehicle worth considerably more than his.  This may be offset if he manages to settle his workers compensation claim as he hopes but that may or may not happen. 

42.     In relation to employment, Mr Strum says, and I accept, that he is not at present in a position to look for work because, on the days he is not caring for Jason, he is caring for his mother.  He says he would need retraining if he is to return to employment.

43.     On the other hand, there does not appear to be any reason Ms Cohen could not work at present, at least part-time.  She says she does not want to do so because she could only work on the days she does not have Jason and she would prefer to wait until he starts school when she can pursue her career in travel and tourism full time.  In the meantime, she said in evidence that she does not need to work. 

44.     I found Ms Cohen’s claims that she wants to wait until she can work full time quite unconvincing.  Indeed, unless she is in fact working as Mr Strum claims, her evidence that she does not need to work until Jason starts school in 2012 only underlines the extent of the financial support she is receiving from her parents, if not from some other source.  In any event, there does not appear to be any reason she could not work in the family business part time if she needed to.

45.     If Mr Strum were not receiving parenting payment, he would have to find work, at least part-time.  That would affect his ability to care for his mother as well as Jason.  On the other hand, it would apparently make little difference to Ms Cohen if she has to continue as she is at present without parenting payment or any other income.  

46.     Ms Cohen and Mr Strum each meet the usual daily costs of feeding, clothing and caring for Jason when he is in their care.  Mr Strum gave evidence, which I accept, that he also pays $235 each week for Jason’s pre-school ($106 after Child Care Benefit), $33 each week for swimming lessons and $17 each week for tennis lessons.  As well, he says the fact that he has Jason for two more days each fortnight means that he incurs some additional daily costs for food and the like.  I accept that this additional time would bring some additional cost.

47.     Ms Cohen disputes Jason’s need for swimming and tennis lessons but does not dispute that Mr Strum incurs these costs.  The only additional cost that she incurs for Jason is that he is included in her private health cover.

48.     Taking all of these matters into account, I am satisfied that Mr Strum is in greater need of parenting payment than Ms Cohen.  It follows that he is the principal carer for Jason.

49.     I affirm the decision under review.

I certify that the 49 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member Jill Toohey.

Signed: …………[sgd]….………………

Diana Weston, Associate

Date of hearing:  25 November 2010

Date of decision:  8 December 2010

Applicant:Self-represented

Representative for the Respondent:        Ms Radhika Prasad, Centrelink Advocacy Branch

Joined Party:  Self-represented