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

[2015] AATA 817

Fozzard and Secretary, Department of Social Services (Social services second review) [2015] AATA 817 (22 October 2015)

Division	GENERAL DIVISION
File Number(s)	2014/1737
Re	Kerry Fozzard
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Senior Member J F Toohey
Date	22 October 2015
Place	Sydney

The Tribunal affirms the decision under review.

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Senior Member J F Toohey

CATCHWORDS – social security – family tax benefit – child support – maintenance action – exemption from taking action – whether applicant entitled to more than the base rate during the relevant period – decision under review affirmed

Legislation

A New Tax System (Family Assistance) Act 1999 (the Act) cl 10 of Sch 1

Tribunals Amalgamation Act 2015

Secondary Materials

Family Assistance Guide

REASONS FOR DECISION

Senior Member J F Toohey

Background

1. This matter concerns the rate of family tax benefit (FTB) that Ms Kerry Fozzard was entitled to for the period 2 July 2007 to 27 June 2012 (the relevant period) in relation to her step-daughter.  I will refer to her step-daughter as “the child”.

2. Ms Fozzard is married to the child’s father.  She was paid FTB for the child from 1 July 2005.  There is no dispute that she was entitled to this payment.  Having applied for child support from the child’s biological mother, Ms Fozzard was entitled to the maximum rate of FTB.

3. In March 2008, Mr Fozzard contacted the Child Support Agency (CSA) to advise they no longer wished to pursue child support payments from the child’s mother.  As a result, Ms Fozzard’s FTB payments were reduced to the base rate. 

4. Ms Fozzard seeks review of a decision dated 6 March 2014 by the Social Security Appeals Tribunal (SSAT) that she was not entitled to FTB at a rate higher than the base rate during the relevant period. 

   Amalgamation of the tribunals

5. On 1 July 2015, the SSAT amalgamated with the Administrative Appeals Tribunal (AAT) and became the Social Services and Child Support Division of the AAT.  Under the transitional provisions in the Tribunals Amalgamation Act 2015, Ms Fozzard’s application to the SSAT is taken to be an application for “AAT first review” and her application for review of that decision one for “AAT second review”.

   The issue

6. I have to decide whether Ms Fozzard was entitled to receive FTB at a rate higher than the base rate during the relevant period.  

   The legislation

7. The relevant legislation is contained in the A New Tax System (Family Assistance) Act 1999 (the Act).    

8. If an individual or an individual’s partner is entitled to claim or apply for maintenance for a child, and the Secretary considers it is reasonable for the individual or their partner to take action to obtain maintenance, and that action is not taken, the rate of FTB payable is the base rate:  clause 10 of Schedule 1 to the Act.

9. Individuals may be granted an exemption from the requirement to take maintenance action for reasons including if taking action may have a harmful or disruptive effect on them: Family Assistance Guide (the Guide) 3.1.5.70 Exemptions from the Maintenance Action Test. 

   Mr Fozzard’s conversation regarding ceasing maintenance action

10. In March 2008, Mr Fozzard had a conversation with the CSA which was recorded in a file note as follows:

    Bruce the pye [payee] called and request for the case to end

    he is not receiving any FTB and clink [Centrelink] benefits

    he wants case to end from the 01/07/2007

    he said that he does not want the cs [child support] from the pye [the child’s mother] as it is minimal and that he do [sic] not wish for [her] to be aware of his future income

11. Mr and Ms Fozzard dispute the record of this conversation.  He says he explained his reasons, which had to do with the disruptive effect on the child of claiming child support from the mother, to the first officer he spoke to but was transferred to several others by which time he gave only brief reasons.  He denies saying he did not want the child’s mother to be aware of his income and says he had no reason to say that.  Ms Fozzard says she was present during this conversation.  She supports his account.  I accept they are both truthful.  I accept the conversation was more extensive than the file note indicates.  I accept the reasons Mr Fozzard gave to the officer probably should have led to advice that they could seek an exemption. 

12. Even if the Centrelink officer should have advised Mr and Ms Fozzard they could seek an exemption, however, that is a matter for a claim for compensation under The Scheme for Compensation for Detriment caused by Defective Administration (the CDDA Scheme).  A failure to provide advice is not itself a matter that this tribunal can review.   

    Subsequent enquiries concerning FTB entitlement

13. Ms Fozzard gave evidence that she made regular enquiries with Centrelink over the years as to whether she was receiving “all that [she was] entitled to”.  On each occasion, she was advised that she was receiving her full entitlement.  Following most, if not all, of these telephone enquiries Centrelink sent her a letter which included the following (or words to this effect):

    “IMPORTANT INFORMATION

    Our records show that you have not taken reasonable steps to obtain child support for [the child], and as a result this may be affecting the amount of Family Tax Benefit you are being paid. … To receive more than the minimum rate of Family Tax Benefit Part A for a child from a previous relationship, you will need to take reasonable steps to obtain child support by applying for a child support assessment with the Child Support Agency…

    … If there is any reason that makes it difficult for you to apply for a child support assessment for [the child], please call us… so we can discuss your options.”

14. Ms Fozzard says that, when letters arrived a couple of days after she had contacted Centrelink, she did not read them, and assumed that they simply confirmed her conversation with Centrelink.  I accept that she genuinely believed the letters had nothing to add but, had she read them carefully, she should have been prompted to ask what the “Important Information” meant for her own FTB payments and whether, and if so how, they were affected.  If nothing else, the advice that she had “not taken reasonable steps to obtain child support” should have prompted her to question that statement.

15. Mr and Ms Fozzard say they were not properly informed by Centrelink until a conversation Ms Fozzard had with a Centrelink officer on 22 June 2012.  Centrelink’s record of that conversation shows:

    [Ms Fozzard] contacted regarding FAO letter sent on 19/06/2012.  Letter reads no maintenance action for [the child].  Advised customer as per our records information was received from Child Support Agency back on 16/04/2008 that customer had requested to cease CSA case for [the child].  This means tha (sic) customer is only entitled to base rate since that date.  Advised customer that to receive more that (sic) base rate maintenance action must be taken. 

16. A copy of Centrelink’s letter dated 19 June 2012 is before the Tribunal.  It is in similar terms to other letters to Ms Fozzard about her Family Assistance payments and includes advice that, as she had not taken reasonable steps to obtain child support for the child, “this may be affecting” her payments and, to receive more than the base rate, she needed to apply for a child support assessment from the CSA; further, that if she had any difficulty doing so, she contact Centrelink to discuss her options.

17. Centrelink’s record of Ms Fozzard’s conversation with the officer on 22 June 2012 indicates that she asked specifically about the advice in the letter dated 19 June 2012.  On this occasion, she was advised that, as Mr Fozzard had requested maintenance action cease in respect of the child in March 2008, she had only been entitled to the base rate of FTB from that date. 

18. On the same day, Ms Fozzard recommenced maintenance action and, from 28 June 2012, she was paid at a higher rate of FTB.  The fact that she applied for child support immediately when she was advised the implications of not taking maintenance action lends credence to her claim that she always understood she was correctly advised by Centrelink and the letters were basically “proforma”.

19. However, Centrelink says, reasonably in my opinion, that it cannot make full enquiries in response to questions such as “am I getting my full entitlement”.  Based on the information Centrelink had, being that Mr and Ms Fozzard had decided against claiming child support payment from the child’s mother, the answer to her enquiry was correct.  Even if Centrelink might have probed more in order to answer Ms Fozzard’s question, they immediately sent a letter that stated clearly that, because they were not claiming child support, Ms Fozzard’s FTB may be affected. 

20. Centrelink contends that, even if the advice provided to Ms Fozzard regarding her FTB entitlement was incomplete or incorrect, that does not make the decision to pay her the base rate of FTB incorrect.  That decision was based on the fact that she and Mr Fozzard were not pursuing child support payments. If the advice was incomplete or incorrect (which I do not understand the Secretary to concede) the proper course would be for Mr and Ms Fozzard to make a claim for compensation under the CDDA Scheme. 

21. It may be that Centrelink officers could have asked further questions to explore why Ms Fozzard was enquiring about her FTB rate.  However, based on the decision to cease taking maintenance action and the fact they did not have an exemption, Centrelink was paying the correct amount of FTB during the relevant period.  On this information, the answers to Ms Fozzard’s telephone enquiries “am I getting my full entitlement” were correct.

22. Mr and Ms Fozzard contend that, had they been advised they were required to take action to obtain maintenance in order to receive above the base rate of FTB, and had they been advised they could apply for an exemption, they would have done so. They maintain that, in the circumstances in which they decided not to pursue payments from the child’s mother, that they would have been granted an exemption.  I accept they would have applied for an exemption had they been told that course was available.  They may have had an arguable case for an exemption although the Secretary submits an exemption would have been unlikely in their circumstances.  Either way, that is not an issue I am required to, or can, decide.  

    Maladministration by Centrelink or Child Support Agency

23. The Guide provides that, where an individual did not take maintenance action (even though they were entitled to do so) because of maladministration by Centrelink or the CSA, the individual’s failure to take action could be considered ‘reasonable’ in the circumstances: Family Assistance Guide 3.1.5.70 Taking Reasonable Maintenance Action. 

24. I accept Ms Fozzard reasonably assumed, based on the information she received from Centrelink officers over the telephone, that she was receiving the maximum amount of FTB to which she could be entitled.  I accept that she assumed the letters that followed those discussions confirmed what she had already been told.  The letters, however, did not merely confirm those discussions.  They notified Ms Fozzard that her FTB entitlement may be affected by not taking maintenance action.  It is unfortunate it was not until June 2012 that Ms Fozzard thought to enquire as to what this may mean for her.  However, I am not satisfied it was maladministration on the part of Centrelink which caused her not to take maintenance action or that led to her receiving only the base rate of FTB. 

    Conclusion

25. I have sympathy for Mr and Ms Fozzard.  I accept they maintained regular contact with Centrelink and genuinely believed they were receiving the maximum payment possible.  I accept that, had they realised the effect of not claiming child support, they would have applied for an exemption and, if that application was not successful, that they may have decided to claim child support from the child’s mother.  For the reasons I have given, however, I am not satisfied Ms Fozzard was entitled to above the base rate of FTB for the relevant period.

26. I affirm the decision under review.

27.     I certify that the preceding 26 (twenty-six) paragraphs are a true copy of the reasons for the decision herein of Senior Member J F Toohey. 

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Associate

Dated 22 October 2015

Date(s) of hearing	1 June 2015 and 10 September 2015
Representatives for the Applicant	Self-represented
Representatives for the Respondent	Kate Hehir & Hannelor Schuster, Government Solicitors