DRURY Applicant And SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
[2010] AATA 533
•19 July 2010
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2010] AATA 533
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2009/3232
GENERAL ADMINISTRATIVE DIVISION ) Re CAMILLA DRURY Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Senior Member R W Dunne Date19 July 2010
PlaceAdelaide
Decision
The Tribunal varies the decision under review.
..............................................
R W DUNNE
(Senior Member)
CATCHWORDS
SOCIAL SECURITY – pensions, benefits and allowances – Family Tax Benefit – apportionment of shared care of children – means by which the calculation of shared care should be made – whether hours may be used in calculating care for the purposes of Family Tax Benefit – decision under review varied.
A New Tax System (Family Assistance) Act 1999 ss 21, 22, 25, 59
Family Assistance Guide
Re Warne and Secretary, Department of Family, Community Services and Indigenous Affairs and Anor [2006] AATA 159
REASONS FOR DECISION
19 July 2010 Senior Member R W Dunne introduction
1. Ms Camilla Drury (“applicant”) and Mr Christopher Moore are the parents of two children, Hannah, born on 19 August 1998 and Lachlan, born on 20 December 2001. The children each answer the description of an “FTB child” as that expression is used in the A New Tax System (Family Assistance) Act 1999 (“Act”). On 9 December 2003, a Family Court Order was made with respect to care arrangements for Hannah and Lachlan, and these arrangements included that Ms Drury and Mr Moore share the care of the children. On 23 December 2003, an officer of the respondent (“Centrelink”) decided to assess Ms Drury’s rate of Family Tax Benefit (“FTB”) on the basis that she had the care of Hannah and Lachlan for 232 days per year, having regard to the number of nights she had them in her care, or a 64 percent share of their care. From 9 December 2003, Ms Drury was paid a 64 percent rate of FTB on the basis that she had a 64 percent share of the care of Hannah and Lachlan.
2. From 1 July 2008 and in accordance with the changes to FTB, a 64 percent share entitled Ms Drury to a rate of 73 percent of FTB. The result was that Ms Drury’s fortnightly rate of FTB increased from 1 July 2008. On 8 August 2008, Ms Drury provided Centrelink with new details for the period during which Hannah and Lachlan were in her care. She argued that the assessment of her entitlement to FTB should be based on the number of hours that the children were in her care and not the number of nights. On 7 January 2009, an Authorised Review Officer (“ARO”) affirmed the original decision that the assessment to FTB should remain based on the Family Court Order. Ms Drury applied to the Social Security Appeals Tribunal (“SSAT”) for review of the ARO’s decision. The SSAT identified Mr Moore as an Added Party to the review, however, attempts made by the SSAT to contact him were unsuccessful. When the SSAT affirmed the decision under review, Ms Drury applied to this Tribunal for review of the decision of the SSAT.
3. At the hearing, Ms Drury represented herself and Ms Laura Giaretto (from Centrelink Advocacy Branch) appeared for the respondent. Pursuant to s 37 of the Administrative Appeals Tribunal Act 1975, the Tribunal received into evidence the T documents (Exhibit R1), together with the applicant’s documents (Exhibit A1) and the applicant’s shared care calendars for 2006/2007 to 2009/2010 (inclusive) financial years (Exhibit A2).
issues for the tribunal
4. The issues for the Tribunal are:
(a) Whether, for the purposes of qualification for FTB with effect from 1 July 2008, the applicant’s share of the care of her two children is more than 64 percent?
(b) Whether “nights in care” is the correct or preferable method for calculating the applicant’s share of care of her two children?
legislation
5. Part 3 of the Act (in particular, s 21) deals with eligibility for FTB. No issue arises in the present case regarding eligibility and it may be disregarded. Sub-sections 22(2), (3), (4) and (6) of the Act establish when an individual is a “FTB child” of another adult individual. Section 22(6A) then requires that:
(a)where there has been a pattern of care for a child over a period, where the child will be a FTB child of more than one individual; and
(b)one of the individuals makes a claim for FTB in respect of the child for some or all of the days in the period; and
(c)that individual is not a partner of one of the other individuals,
the Secretary must determine the percentage of the period during which the child was in the care of that individual. The percentage determined under s 22(6A) for the individual in respect of the child is used to work out the individual’s shared care percentage for the child in s 59 of the Act. Under s 22(7), if the Secretary (and, upon review, the Tribunal) determines under s 22(6A) that a child was in the care of an individual for at least 35 percent of a period, the child is taken to be a FTB child of that individual on each day in that period, whether or not the child was in the individual’s care on that day. If the Secretary determines that a child was in the care of an individual for less than 35 percent of the period, the child is taken not to be a FTB child of that individual (s 25 of the Act).
6. Section 59 of the Act sets out the shared care percentages where a FTB child is a child of individuals who are not members of the same couple. Where one individual’s care percentage has been determined under s 22(6A) of the Act, s 59 sets out the person’s shared care percentage of FTB for the child, based on that individual’s care percentage under s 22(6A). Section 59 relevantly reads:
“59 Shared care percentages where individual is FTB child of more than one person who are not members of the same couple
(1)An individual has a shared care percentage under this section for an FTB child of the individual if:
(a)the Secretary has determined, under subsection 22(6A), a percentage of the period mentioned in that subsection during which the child was, or will be, in the care of the individual; and
(b) that percentage is at least 35% and not more than 65%.
Note: The Secretary is taken to have made a determination under subsection 22(6A) in a blended family case (see paragraph 27(2)(b)).
(2)The individual’s shared care percentage for the FTB child is the relevant percentage specified in column 2 of the table.
Shared care percentages
Item Column 1 Column 2
Individual’s percentage Shared care percentage
determined under subsection22(6A)
1 35% to less than 48% 25% plus 2% for each
percentage point over 35%
2 48% to 52% 50%
3 more than 52% to 65% 51% plus 2% for each
percentage point over 53%
(3)If the shared care percentages, specified in the table, of all of the individuals of whom the child is an FTB child add to less than 100%, then the Secretary may determine a different whole percentage for one or more of those individuals for the FTB child. Despite subsection (2), the individual’s shared care percentage for the child is the percentage so determined for that individual.”
7. For the purposes of determining an individual’s shared care percentage of FTB, the Secretary has adopted a Family Assistance Guide (“Guide”). The Guide sets out the way in which the Secretary undertakes the task of determining the percentage of shared care. In my view, the policy set out in the Guide provides an appropriate mechanism for the Secretary (and, upon review, the Tribunal) to undertake the task of making a shared care determination, and I propose to have regard to its terms.
8. Paragraph 2.1.1.45 of the Guide is headed “Shared Care & Establishing a Pattern of Care”. The paragraph commences:
“If the care percentage or care arrangements are not agreed on between the carers, it is necessary to establish a pattern of care … to make a shared care determination for FTB. A pattern of care is established by using either the number of nights in care … or hours of care for each FTB child. The percentage of care for each FTB child is then calculated and applied to the standard rate … of FTB …”
9. Paragraph 2.1.1.45 speaks of making a shared care determination by reference to actual care arrangements as agreed to by the parties or, where there is no agreement, by reference to available evidence. The Guide suggests that, generally, a pattern of care is based on the “number of nights” in an assessment period where an individual has the overnight care of a FTB child. An individual with the overnight care of a child is regarded as having had care of the child for that day. In other words, “one night in care equals one day in care”.However, the Guide recognises that there may be occasions where counting the nights in care does not accurately reflect the caring arrangements for the child. In these cases, at the request of a carer, the actual number of hours of care may be calculated for each carer in determining the pattern of care, and then converting into days in care. Paragraph 2.1.1.50 of the Guide deals with the calculation of an appropriate percentage. “Step 1”, it is suggested, is to establish a pattern of care, “Step 2” is to work out the percentage of care, “Step 3” is to round the percentage of care and “Step 4” involves calculating the rate.
background and evidence
10. The factual background in this case can largely be taken from the reasons for decision of the SSAT. Although Mr Moore was not present at the hearing, I have no reason to doubt the background established by the SSAT or the evidence given by Ms Drury during the course of the hearing. Ms Drury disagreed with using the method of counting nights in care in determining a pattern of care for a shared care determination for FTB. In her case, she believed that the hours of care method was more appropriate. FTB was meant for the benefit of her children. Mr Moore contributed nothing to their day-to-day care and she paid 100 percent of these costs. In addition to the day-to-day costs of caring for her children, there were also indirect costs that she had to bear. It was necessary for her to have time off from work and, as a result, she suffered a reduction in her employment income. Mr Moore spent nothing on the children’s education and, because he lived in a caravan park, he looked after them at his sister’s house. His family had purchased clothing for the children, whereas Mr Moore spent little or nothing on these items. She said Lachlan suffered from ADHD and, from the age of 2 years, he had experienced delay in his development. Hannah required orthodontic treatment and significant dental expenses had been involved. Mr Moore had not contributed anything to these ongoing expenses.
11. Ms Drury argued that, even if a nights in care basis was adopted, she believed that Mr Moore had the children in his care for only 113 nights (not 133 nights). Mr Moore’s care ceased on Monday morning when he took the children to school. His care started on Thursday afternoon on alternate weeks when he picked the children up from school and ended on the following Monday morning when he took the children to school. Ms Drury said that, for fairness, her share of care should be calculated by allocating to her the Thursday afternoon and evening of each fortnight that Mr Moore had the children in his care. In any event, she believed the hours of care basis was more appropriate in her circumstances, given the additional costs and expense that she was being put to for the children. She tendered a calendar for the financial year commencing on 1 July 2008 which disclosed, on an hours in care basis, that Mr Moore had cared for the children for 2,474 hours. This represented a share percentage of 28.24 percent in the 2008/2009 financial year.
12. Insofar as Child Support was concerned, based on a recent assessment, Ms Drury should receive some benefit, but she would not be able to receive anything from the Child Support Agency. By the same token, she did not have to pay Mr Moore anything in respect of Child Support. She pointed out that she was a registered nurse and needed earnings of at least 45 hours per fortnight. However, because of the need to care for her children, she was struggling to get the required number of fortnightly hours work. During the last financial year, her income had been $46,000. Before then, she was able to receive $58,000 in a financial year. In the current financial year, she would be likely to receive $40,000 by way of income as a registered nurse. In order to maximise her earnings, she found that she would be required to work around the order made by the Family Court. This meant that she had to work in shifts where it was possible for her to do so.
consideration
For the purposes of qualification for FTB with effect from 1 July 2008, was the applicant’s share of the care of her two children more than 64 percent?
13. Before the SSAT, there was no dispute between Ms Drury and Centrelink as to the actual care arrangements for her children and these were as set out in the order of the Family Court dated 9 December 2003. Ms Drury argued that the current method of assessing her share of the care of her two children was not fair and should not be based on the nights in care method. Before the SSAT, she argued that her share of the care should be calculated by allocating to her the Thursday afternoon and evening of each fortnight that Mr Moore had the children in his care, thereby reducing his share of the care to 110 nights and increasing her share to 255 nights. The SSAT believed that the use of the nights in care method to calculate Ms Drury’s share of the care of Hannah and Lachlan was the fairest approach to the assessment of her share of their care. The Tribunal calculated that Ms Drury had the children in her care for 232 days in each financial year or a 64 percent (rounded up from 63.56 percent) share of their care. Therefore, Ms Drury’s share of the care of her children was not more than 64 percent.
14. The calendar tendered by Ms Drury for the financial year commencing on 1 July 2008 sets out the percentage of shared care which she says had been assumed by Mr Moore in respect of the two children. In my view and based on the evidence, the use of the nights in care method seems to me to yield a result which is inequitable. I believe it is preferable, in a case such as this, that an hours of care method is used. Moreover, in support of the use of hours of care and adopting the approach taken by Deputy President P E Hack SC in ReWarne and Secretary, Department of Family, Community Services and Indigenous Affairs and Anor [2006] AATA 159, I believe it is appropriate to have regard to the greater financial responsibility that has been cast upon Ms Drury by virtue of the shared care arrangements.
15. In the 2008/2009 calendar, Ms Drury indicated that Mr Moore had cared for Hannah and Lachlan for 2,474 hours (or 28.24 percent of the time). However, in perusing the calendar, I note that Ms Drury omitted 16 occasions where Mr Moore had the care of the children. On this basis, an additional 384 hours would represent the additional hours that Mr Moore cared for Hannah and Lachlan during the 2008/2009 financial year. In addition, I note that Ms Drury omitted a further 20 occasions when 4 hours of care had been undertaken by Mr Moore. I understand that Ms Drury accepts that these omissions in the calendar occurred. In these circumstances and based upon Ms Drury’s original figures, I am satisfied that Mr Moore cared for Hannah and Lachlan for a total of 2,938 hours in the financial year commencing on 1 July 2008. Adopting these figures, the number of hours that Ms Drury cared for Hannah and Lachlan on an hours of care basis in the 2008/2009 financial year was 5,822 hours or 67 percent (rounded up in accordance with s 22(6B)(a) of the Act).
16. Although she also tendered calendars for the 2006/2007, 2007/2008 and 2009/2010 financial years, the application under review related to the period from 1 July 2008 and Ms Drury’s evidence was confined to this period.
conclusions
17. Based on what I say in paragraph 15, it follows that the percentage of shared care determined under s 22(6A) of the Act in respect of the period commencing on 1 July 2008 should be regarded as 67 percent on the part of Ms Drury and 33 percent on the part of Mr Moore. In these circumstances and having regard to s 25 of the Act, as Mr Moore cares for Hannah and Lachlan for less than 35 percent of the period involved, each of the children are not to be a FTB child of Mr Moore for any part of that period. It follows that Ms Drury is entitled to 100 percent of the FTB for Hannah and Lachlan from 1 July 2008.
decision
The Tribunal varies the decision under review as set out in the conclusions detailed in paragraph 17 of these reasons.
I certify that the 18 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member R W Dunne
Signed: .....................................................................................
AssociateDate of Hearing 26 March 2010
Date of Decision 19 July 2010
Advocate for the Applicant Self-representedAdvocate for the Respondent Ms L Giaretto
Centrelink Legal Advocacy Branch
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