De Silva and Secretary, Department of Social Services (Social services second review)

[2018] AATA 2718

De Silva and Secretary, Department of Social Services (Social services second review) [2018] AATA 2718 (9 August 2018)

Division:GENERAL DIVISION

File Number(s):      2017/0726

Re:Udayanga De Silva

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Ms Anna Burke, Member

Date:9 August 2018

Place:Melbourne

The Tribunal affirms the decision under review.

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

Ms Anna Burke, Member

Catchwords

FAMILY TAX BENEFIT - whether FTB should be paid at the base rate - absences from Australia - decision under review affirmed

Legislation

Administrative Appeals Act 1975

A New Tax System (Family Assistance) Act 1999

Cases

Re Rydel and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 143

Re Department of Families, Housing, Community Services and Indigenous Affairs and Evtushenko [2011] AATA 596

Secondary Materials

Department of Social Services, Guides to Social Policy Law - Family Assistance Guide

REASONS FOR DECISION

Ms Anna Burke, Member

9 August 2018

1. On 17 July 2012 Mr De Silva applied online for family tax benefit (FTB) under the A New Tax System (Family Assistance) Act 1999 (the Act), for his child born on 20 November 2011. The claim was granted from 1 July 2012.

2. On 24 July 2012 Centrelink advised Mr De Silva he could not be paid FTB Part B or more than the base rate of FTB Part A because the records show he was still overseas. On 24 August 2015, on internal review, a departmental authorised review officer (ARO) affirmed the earlier Centrelink decision. The ARO determined that Mr De Silva:

   had been overseas for more than 13 weeks between 2 October 2011 to 27 May 2012 and then departed Australia again on 22 July 2012, being within 13 weeks of [his] arrival back into the country 27 May 2012, [he was] only entitled to the base rate of Family Tax Benefit for the time [he was] overseas from 22 May 2012 to 31 July 2012. Because then departed Australia on 11 August 2012, again being within 13 weeks of [his] return on 1 August 2012, [he was] only entitled to the base rate of Family Tax Benefit for the period [he was] overseas from this date until 6 September 2012.

3. On 12 January 2017 the Social Services and Child Support Division of the Tribunal
   (AAT1) affirmed the ARO’s decision. The AAT1 found that Mr De Silva was only entitled to FTB Part A during his periods of absence from Australia, from 22 July 2012 to 31 July 2012 and 11 August 2012 to 6 September 2012, even though his departure was before he may have been eligible for the payment. The AAT1 found that this was in accordance with the decision of Deputy President Nicholson in Re Rydel and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 143.

4. Mr De Silva requested a review of the AAT1 decision by the General Division of the Tribunal. He stated his reason as follows:

   The law was not applied correctly. Subsection 24(4) and (5) of the Act are irrelevant to the matter in question. (This was pointed out with examples from the Family Assistance Guide as I did not have the Act at hand at the hearing)

   ISSUES

5. The issue in contention is whether Mr De Silva was correctly paid FTB Part A at the base rate for the periods from:

   ·22 July 2012 to 31 July 2012; and

   ·11 August 2012 to 6 September 2012

   LEGISLATIVE FRAMEWORK

6. At the time of the claim, when a FTB recipient was overseas, FTB Part A payments could continue at the maximum rate for a period of 13 weeks and continue at the base rate for periods up to 3 years. If a person returned to Australia and left within 13 weeks, then he/she was taken not to have returned to Australia.

7. Section 24 of the Act deals with the effect of certain absences of FTB recipients from Australia (as it was at the date of the original decision):

   …

   Maximum period of eligibility for family tax benefit while individual overseas

   (4)If an individual leaves Australia, the maximum period for which the individual can be eligible for family tax benefit during that absence from Australia is the period of 3 years beginning on the first day of that absence.

   (5)If:

   (a)an individual who has been absent from Australia for more than 13 weeks, but less than 3 years, return to Australia; and

   (b)  the individual leaves Australia again less than 13 weeks later;

   the individual is taken not to have returned to Australia for the purpose of subsection (4)

   (6)If:

   (a)an individual is eligible for family tax benefit while the individual is absent from Australia; and

   (b)the individual then ceases to be eligible for family tax benefit because of the application of subsection (4) or a previous application of this subsection; and

   (c)the individual returns to Australia; and

   (d)the individual leaves Australia again less than 13 weeks after returning to Australia;

   the individual is not eligible for family tax benefit at any time during the absence from Australia referred to in paragraph (d).

8. Section 62 of the Act (at the date of original decision) states as follows:

   62  Effect on individual’s rate of the individual’s absence from Australia

   Absence from Australia of recipient

   (1)Subsection (4) modifies the operation of Schedule 1 in working out an individual’s rate of family tax benefit for a period during which the individual is an absent overseas recipient.

   (2)If an individual leaves Australia, the individual is an absent overseas recipient for any period that occurs:

   (a)during that absence from Australia; and

   (b)after the end of the period of 13 weeks beginning on the first day of that absence.

   (3)If:

   (a)an individual is eligible for family tax benefit while the individual is absent from Australia; and

   (b)the individual then becomes an absent overseas recipient because of the application of subsection (2) or a previous application of this subsection; and

   (c)the individual returns to Australia; and

   (d)the individual leaves Australia again less than 13 weeks after returning to Australia;

   the individual is an absent overseas recipient for any period that occurs during the absence from Australia referred to in paragraph (d).

   (4)For the purposes of working out an individual’s rate of family tax benefit for a period during which the individual is an absent overseas recipient, Schedule 1 applies with the modifications set out in the following table:

   …

   CONSIDERATION

9. Mr De Silva contended in his written submissions and oral evidence that he was not a resident of Australia until 27 May 2012 because he was working full-time in Japan prior to this date. He stated he had visited Australia in 2009 and 2011, prior to his residency here, but for only a week each time. He claims this is substantiated by Centrelink’s rejection of his claim for FTB and baby bonus on 29 September 2011, on the basis that he was ‘not residentially qualified’.

10. Mr De Silva contended that the submission from the Secretary was completely illogical and meaningless, as section 24 of the Act did not have any relevance to his situation. He stated this is because section 24 defines and limits the period an individual can be eligible for any FTB benefit whilst being overseas, whereas the issue in question is the maximum period an individual may be eligible for the full rate of FTB.

11. He submitted that section 62 of the Act, as it was at the time of his application, is the only relevant section to be considered. Sections 62(2) and (3) define all situations where an individual’s eligible rate of FTB may be reduced to the base rate due to absence from Australia. He argued that he was not an individual eligible for FTB for the period from 2 October 2011 to 26 May 2012 under section 62(3)(a). He therefore contended that section 62(3) is not applicable to him for the period immediately after 26 May 2012.

12. Mr De Silva further contended that he had received conflicting and unhelpful advice from Centrelink. He stated if he had been told clearly that he would not be eligible for FTB at the full rate for the periods in question, his partner would have applied for FTB because she was in Australia with the FTB child during the relevant periods. He advised the Tribunal he had applied in his name as he had the relevant identification required and his partner did not. He emphasised he had found the whole process complicated by the lack of knowledge and understanding of the Centrelink staff, particularly in respect of the eligibility rules in relation to overseas absences.

13. Mr De Silva drew the Tribunal’s attention to the Family Assistance Guide at 2.1.2.30 - Temporary Absences from Australia before 1 July 2016, and contended his situation was analogous to that in example 2 of “Sharon”:

    Effect of prior absence overseas on FTB

    The following table explains the FTB eligibility and entitlement rules that apply for a prior overseas absence.

If an individual…	Then…
becomes eligible for FTB during the temporary absence, Example: Following the birth of an eligible FTB child.	the period of the absence prior to eligibility commencing has an effect on eligibility and entitlement. there is no eligibility for FTB after 56 weeks, commencing from the day of the departure.
is absent for more than 6 weeks but less than 56 weeks, is not eligible for FTB during the temporary absence from Australia, returns to Australia, becomes eligible for FTB on return to Australia, and leaves again after less than 6 weeks,	the individual may be able to receive FTB Part A above the base rate and FTB Part B while they are in Australia. the individual's return to Australia does not affect the 56 week eligibility period, which commences from the day of the initial departure as they stayed in Australia for less than 6 weeks. FTB ceases to be payable when the 56 week period expires. FTB Part A at greater than the base FTB child rate and FTB Part B are payable for the first 6 weeks of the later absence, or up to the day when the 56 week period (beginning from the date of the initial departure) expires, at which point FTB ceases to be payable.
is eligible for FTB during a temporary absence, ceases to be eligible for FTB because the temporary absence becomes permanent, returns to Australia temporarily, not intending to stay and leaves Australia again less than 6 weeks after returning,	the individual is not eligible for any FTB while temporarily in Australia (as residency requirements are not satisfied), or upon leaving the country again.
was absent from Australia for more than 56 weeks, was not eligible for FTB while absent from Australia, returns to Australia, becomes eligible for FTB, and, leaves after more than 6 weeks,	the individual is eligible for FTB for a temporary absence of up to 56 weeks from the second departure.

…

Example 2: Sharon is temporarily absent from Australia and living in Germany for 41 weeks. Two weeks after returning to Australia, her first child is born. When the child is 3 weeks old, Sharon goes back to Germany for a month.

The 56 week absence period is counted from the day of the initial absence. Sharon is entitled to more than the base rate of FTB Part A and FTB Part B from the date the child was born until 6 weeks after Sharon leaves Australia. She is then entitled to base rate FTB Part A until the 56 week period expires. After the expiry of the 56 week period, which began on the date of her initial departure, Sharon is not eligible to any FTB.

1. Mr De Silva believes he should have been paid in accordance with the Centrelink customer file note of 27 August 2012, which states:

   ·FTB Part B can be paid outside Australia until 10 November 2012 (13 weeks after departure). FTB Part B will stop if the applicant is still outside Australia on that date;

   ·Rent Assistance can be paid outside Australia until 9 February 2013 (26 weeks after departure). Rent Assistance will stop if the applicant is still outside Australia then;

   ·FTB Part A Base can be paid outside Australia until 11 August 2015 (3 years after departure). Family Tax Benefit Part A will stop if the applicant is still outside Australia on that date;

   ·Factors affecting the decision include: applicant is paid FTB, Rent Assistance and applicant’s child is not travelling with them; there is no social security agreement with the destination country.

2. The respondent contended that the cumulative effects of the legislation and the decisions of Rydel and Evtushenko[1] are that Mr De Silva’s eligibility for FTB payments is inclusive of the period from 2 October 2011 to 26 May 2012, regardless of the fact that he did not apply for FTB until 17 July 2012. The respondent relies on Rydel which quoted Evtushenko:

   30. Senior Member Britton found:

   16. Section 24(4) provides that if the adult claimant leaves Australia they will be eligible for FTB for a maximum period of three years commencing on the first day of “that absence”. I cannot agree with the SSAT, that s24(4) should be construed as meaning ‘that absence’ only comes into effect when the adult claimant becomes eligible for FTB by having an FTB child. The language of s 24(4) is clear and unambiguous. The error in Ms Evtushenko’s submission and the SSAT’s decision is that it conflates the capacity to become eligible for FBT and the eligibility itself. Section 24(4) is concerned only with potential eligibility. It provides a grace period of three years in which the potential may become actual. When, after three years of continuous absence, that time elapses, a person who remains absent from Australia loses the potential eligibility he or she had enjoyed until he or she returns to Australia for the relevant length of time.

   [1] Re Department of Families, Housing, Community Services and Indigenous Affairs and Evtushenko [2011] AATA 596

3. The respondent’s contention was as follows:

   ·Mr De Silva was overseas from 2 October 2011 to 26 May 2012, a period of more than 13 weeks but less than 3 years;

   ·Mr De Silva departed Australia on 22 July 2012 which was less than 13 weeks after his return to Australia on 27 May 2012;

   ·Consequently, Mr De Silva is taken not to return to Australia for the purposes of section 24(5) of the Act;

   ·Mr De Silva returned to Australia on 31 July 2012 and departed on 11 August 2012; which was less than 13 weeks after his return on 31 July 2012;

   ·consequently, Mr De Silva is taken not to return to Australia for the purposes of section 24(5) of the Act;

   ·Mr De Silva’s FTB entitlement during the periods he was overseas, namely 22 July 2012 to 31 July 2012 and 11 August 2012 to 6 September 2012, was FTB Part A at the base rate.

4. The respondent tabled a country of residence document for Mr De Silva in support of their contention as follows:

   ·Sri Lanka - 20 October 1978;

   ·Japan 6 - April 1999;

   ·Thailand - 25 May 2006;

   ·Japan - 18 May 2010; and

   ·Australia - 27 September 2011.

5. The respondent contended there were no special circumstances that prevented Mr De Silva from making an application under section 109A for review of the original decision within 52 weeks.

   FINDINGS

6. Whilst it does appear illogical that Mr De Silva’s eligibility for a benefit is applicable before he had even applied for it, or indeed his child had been born, the Act and relevant case law indicate that the potential for the benefit is applicable. Therefore, Mr De Silva’s absences from Australia between 2 October 2011 and 27 May 2012 do form part of the calculation of his absences from Australia. The Applicant was only entitled to the base rate of FTB Part A for the relevant periods in question.

7. This matter has taken a long time to reach this stage, in part because of Mr De Silva’s necessary absences overseas, particularly in relation to his mother’s death. Indeed the law has been amended since Mr De Silva’s original claim. Under the new law, Mr De Silva would not have qualified for FTB. This whole situation could have been avoided if Mr De Silva’s partner had claimed the FTB benefit for their child, as only one parent is entitled to claim the benefit, and she was resident in Australia with their child for the whole period.

8. Mr De Silva’s argument that section 24 of the Act does not apply in his situation is not correct. Section 24 must be read in tandem with section 62 of the Act. His right to FTB as an individual absent from Australia is calculated in the same way under both sections of the Act.

9. There were numerous discrepancies in the information Centrelink provided in respect of Mr De Silva’s claim. These may all have logical explanations but they do not appear to have been provided to Mr De Silva. Notably:

   ·The rejection of his claim for FTB and baby bonus on 29 September 2011 on the basis that he was ‘not residentially qualified’: there is a document stating he was a resident from 27 September 2011;

   ·Advice on 27 August 2012 that he was eligible for payment of FTB Part B, which had been preceded by advice on 24 July 2012 that he was not.

10. As Mr De Silva had expressed his frustration with the advice from Centrelink, the Tribunal advised him he could seek redress by making a claim for compensation under the Scheme for Compensation for Detriment caused by Defective Administration (the CDDA Scheme), which is administered by the Department of Finance. Defective administration is defined as:

    • a specific and unreasonable lapse in complying with existing administrative procedures; or
    • an unreasonable failure to institute appropriate administrative procedures; or
    • an unreasonable failure to give to (or for) an applicant, the proper advice that was within the officer's power and knowledge to give (or reasonably capable of being obtained by the officer to give); or
    • giving advice to (or for) an applicant that was, in all the circumstances, incorrect or ambiguous.

    DECISION

11. The Tribunal affirms the decision under review.

I certify that the preceding 24 (twenty-four) paragraphs are a true copy of the reasons for the decision herein of Ms Anna Burke, Member

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

Associate

Dated: 9 August 2018

Date of hearing:	14 June 2018
Applicant:	Self-represented
Advocate for the Respondent:	Mr Tim Noonan, Department of Human Services, Freedom of Information and Litigation Branch