Halls and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2008] AATA 706

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 706

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2008/0747

GENERAL ADMINISTRATIVE DIVISION		)
Re		JEREMY CHRISTOPHER HALLS

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Senior Member L Hastwell

Date12 August 2008

PlaceAdelaide

Decision The Tribunal affirms the decision under review.

..............................................

L HASTWELL
  (Senior Member)

CATCHWORDS

SOCIAL SECURITY – pensions, benefits and allowances – Family Tax Benefit – Maternity Payment  – Baby Bonus – applicant living overseas at time of application – requirement to be an Australian resident – concept of “resident in Australia” considered  – decision affirmed  

A New Tax System (Family Assistance) Act 1999 ss 3(1), 21(1), 36(2)

Social Security Act 1991 ss 7(2), 7(3)

Hafza v Director- General of Social Security (1985) 60 ALR 674
Re Firdousi and Department of Family and Community Services (2005) 89 ALD 436
Re Wybrow and Secretary, Department of Social Security (AAT 8321, 19 October 1992)

REASONS FOR DECISION

12 August 2008   Senior Member L Hastwell    

1.      Jeremy Halls (the applicant) seeks review of a decision of the Social Security Appeals Tribunal (SSAT) of 24 January 2008 which affirmed a decision of an Authorised Review Officer of Centrelink that the applicant was not entitled to receive Family Tax Benefit (FTB) and Baby Bonus in respect of his child, Clara, who was born in Japan on 5 March 2007.

2.      The applicant lodged his claim for FTB and Baby Bonus (formerly called Maternity Payment) with respect to Clara on 20 August 2007 while he was living in Japan.  He subsequently returned to Australia to live permanently in December 2007 bringing with him his Japanese wife and their two children. 

relevant legislation

3.      The A New Tax System (Family Assistance) Act 1999 (the FA Act) sets out the relevant criteria for FTB. Section 21(1) provides as follows:

“21.     When an individual is eligible for family tax benefit in normal circumstances

(1)      An individual is eligible for family tax benefit if:

(a) the individual has at least 1 FTB child (see section 22 and later provisions); and

(b)      the individual:

(i)         is an Australian resident; or

(ii)        is a special category visa holder residing in Australia; or

(iii)       satisfies subsection (1A); and

(c) the individual’s rate of family tax benefit, worked out under Division 1 of Part 4, is greater than nil.”

4. Section 3(1) of the FA Act provides “Australian resident has the same meaning as in the Social Security Act 1991”.

5. Section 7(2) of the Social Security Act 1991 (the Act) provides:

“7(2)    An Australian resident is a person who:

(a)      resides in Australia; and

(b)      is one of the following:

(i)        an Australian citizen;

(ii)        the holder of a permanent visa;

(iii)      a special category visa holder who is a protected SCV holder.”

6. Section 7(3) of the Act provides further guidance with respect to the concept of residence:

“7(3)In deciding for the purposes of this Act whether or not a person is residing in Australia, regard must be had to:

(a)      the nature of the accommodation used by the person in Australia; and

(b) the nature and extent of the family relationships the person has in Australia; and

(c) the nature and extent of the person’s employment, business or financial ties with Australia; and…”

7. To qualify for Baby Bonus, which was previous known as Maternity Payment, the applicant must have been qualified for FTB within 13 weeks of Clara’s birth. The FA Act provides as follows:

“36(2)  First, an individual is eligible for maternity payment in respect of a child if:

(a) the individual is a parent of the child; and

(b) the individual either:

(i) is eligible for family tax benefit in respect of the child at any time within the period of 13 weeks starting on the day of the child’s birth; or

(ii) would be so eligible except that the individual’s rate of family tax benefit, worked out under Division 1 of Part 4, is nil.”

issues to be determined

8.      The central issue in this case is whether, at the time of his claim in August 2007, the applicant was an Australian resident for the purposes of establishing eligibility for FTB.  He is an Australian citizen, but was he also an “Australian resident” at the relevant time?

9.      Was the applicant at any stage between 5 March 2007 and the date that he lodged his claim for FTB resident in Australia, within the meaning of the Act, such that he could satisfy the eligibility criteria for FTB and also qualify for Baby Bonus?

10. The various criteria set out under s 7(3) of the Act must be considered in determining this case.

the hearing

11. The applicant attended the hearing and gave oral evidence to the Tribunal. Mr Belsito, a Customer Services Officer with Centrelink, gave evidence by telephone for the respondent (the Department). The documents received under s 37 of the Administrative Appeals Tribunal Act 1975 were received into evidence, as were a number of other exhibits which will be referred to where relevant.

12.     The applicant was born in Australia and is an Australian citizen by birth.

13.     He travelled to Japan on a working holiday in 1996.  He lived continuously in Japan thereafter until 2007, save for some trips back to Australia to visit family and friends and to attend his brother’s wedding.

14.     Records indicate that the applicant visited Australia eight times between May 1998 and 24 September 2007 (T23/69).  These visits on the whole were relatively brief, with the longest visit being 27 days and the shortest two days in duration.  The purpose of those visits was to holiday in Australia and catch up with family and friends, apart from a brief trip to Cairns on one occasion to arrange his wife’s spouse visa.  Between those dates the applicant spent 3,323 days in Japan and 109 in Australia.  As at 24 September 2007 he had been continuously absent from Australia for 592 days.

15.     The applicant married his first wife, who was Japanese, in the Registry Office in Adelaide in 1996.  They travelled to live in Japan, but the marriage broke down and the parties were divorced, with property settlement proceedings taking place through the Family Court of Australia and, it appears, possibly also in Japan.  The applicant owned a property in Adelaide, but he was forced to sell it in the course of the property settlement proceedings.  He had purchased that property in 1997 and he sold it in 1998 with the sale proceeds being held in a trust account until property settlement proceedings were finalised in the Family Court of Australia in 1999.

16.     He met his current wife and married her in Japan in 1998.  Their first child was born on 27 September 2004 and their second child on 5 March 2007.  Both children were born in Japan and have Australian passports and citizenship by descent.

17.     The applicant worked in various positions in Japan from 1996 to the date that he returned to Australia in December 2007.  He did not have employment in Australia between 1996 and his return in 2007.  At all times he worked for Japanese companies on company sponsored working visas.  He and his wife lived in rental properties in Japan.  Because he was not a Japanese citizen, there was a limit on the number of hours per week that he was entitled to work.  He worked approximately 25 hours per week.

18.     In 2003 his wife applied for a Spouse (Provisional) visa as part of their plan to ultimately return to Australia.  He and his wife came to Cairns to make arrangements for that visa.  He said that they had no intention of continuing to reside in Japan because the working hours were irregular, it was very crowded, the work is sporadic and he was only paid for the work that he did.  That visa, which was granted on 4 March 2004, gave her the right of multiple re-entry to Australia pending a decision on her Spouse (Migrant) (Subclass 100) visa.

19.     In 2006, while visiting Australia, the applicant purchased a house in Adelaide through a Family Trust which he had set up in February of that year specifically to facilitate this purchase.  It was then rented out until such time as the applicant and his wife returned to Australia and they now reside in that property.

20.     The applicant and his daughter Clara were issued with Medicare cards on 5 May 2007 while he was still living in Japan.

21.     While he was living in Japan, the applicant took the opportunity of importing some cars to Australia and, with his brother’s assistance, they were sold in Australia for a small profit.  His evidence with respect to income tax returns was confusing.  He did not lodge personal income tax returns in Australia in the period 1998 to 2007.  The SSAT had reported that he claimed to have lodged returns, but his evidence to this Tribunal was that he had not done so.  He was not required to lodge income tax returns in Japan.  He then said that he believed he did lodge an income tax return in Australia in 2003 or possibly 2004 through his accountant in Adelaide.  He had not lodged an income tax return in Australia in 2005 and 2006.  No income tax returns were produced.

22.     He has parents and siblings in Australia and his family history goes back to the mid-eighteenth century in South Australia.

23.     He had superannuation when he left Australia in 1996 and he told the Tribunal that the superannuation remains in the Club Plus fund.  He said that he had not applied to withdraw those funds while living in Japan.

24.     Mr Belsito gave evidence by telephone.  He has worked as a Centrelink Customer Services Officer at the Wendouree call centre for seven years.  He was the person who spoke to the applicant on 13 August 2007 when the applicant telephoned the customer service line to make an application for FTB and Baby Bonus with respect to his child, Clara.  Mr Belsito confirmed the accuracy of his report of their discussion (T4).  He denied that he at any stage told the applicant that he thought he was entitled to the payment.  He recalled the conversation as he said it was not often that someone from overseas made application for Baby Bonus.  His recall was that the applicant kept referring him to the Australian Taxation Office website and Mr Belsito told the applicant to go to the Centrelink website for information and suggested that he ring a manager.  He recalls referring the query to an Area Service Manager at the local office.

other evidence

25.     The applicant provided the Tribunal with a member statement from his Club Plus superannuation fund which confirmed that he was still a member of that fund in 2005.  The Tribunal was provided with a letterhead, but did not see any transaction history on that fund.  Documentary evidence with respect to his dealings with motor vehicles in 2005 was produced.  He provided a rental statement with respect to the property that the Family Trust had purchased in Adelaide in 2006.  The Family Trust held a bank account in Adelaide, one assumes from the date of its inception in 2006.

26.     When asked in his discussion with Mr Belsito whether he was living permanently in Australia, the applicant’s response over the phone was “no”, and when asked whether he lived overseas on a permanent basis, the response was “yes”.  He gave the answer that his partner was living permanently in Australia, and he referred to her as being a permanent visa holder (which was granted in January 2006).

contentions

27.     The applicant contends that he passes the residency test and should be considered an Australian resident throughout the period that he was in Japan.  He argues that he is entitled to FTB and Baby Bonus.  He contends that at all times he had significant links with Australia and had the long-term intention of returning.  It was only circumstances, such as his spouse’s visa application and the expense of returning to Australia, which prevented him returning sooner.  He is passionate about what he considers to be his right to the payments in question and he sees his case as a test case for others in a similar position.

28.     The Department contends that the applicant was not resident in Australia within the meaning of that definition as set out in the Act, either on the date of the birth of his child or on the date that he made application for FTB and Baby Bonus.  The respondent contends that the applicant was resident in Japan at the relevant dates.

findings of fact

29.     The Tribunal makes the following findings of fact:

(a)The applicant travelled to Japan to work in 1996 and he did not return to reside permanently in Australia until December 2007.

(b)The applicant did not take any positions of employment in Australia between 1996 and December 2007.

(c)The applicant owned a property in Adelaide from 1997 until 1998.  That property was then sold in the context of property settlement proceedings with his first wife and thereafter he did not own property in Australia until he set up a Family Trust and purchased a property in the Trust’s name in 2006.

(d)The applicant’s purchase of a property in 2006 in Australia was because he planned to ultimately return to live in Australia.  That property was rented out until such time as he returned with his family to Australia in December 2007.

(e)The applicant maintained bank accounts with an Australian bank for at least some of his time in Japan, with his address in Tokyo appearing as the address of the account holder.  It is not clear how he and his wife managed their finances and income and whether there were also Japanese bank accounts in his wife’s name or in his name.

(f)The applicant married his second wife, who was a Japanese citizen, in 1999.  Their first child was born on 27 September 2004 in Japan.  Their second child, Clara Halls, was born on 5 March 2007 and was granted Australian citizenship by descent on 30 July 2007.

(g)The applicant worked in Japan on different contracts with intermittent breaks between contracts from 1996 until his return to Australia in 2007.  He was entitled to working visas in Japan which were sponsored by the Japanese companies that he worked for.

(h)The applicant returned to Australia to visit on a number of occasions between 1996 and his return in 2007.  He and his wife stayed with relatives when they returned.  He visited Australia approximately 11 times between April 1996 and February 2006, with the longest visit being approximately one month in 2006 and the shortest visit being two days in 1999.  The purpose of these trips was to visit family and friends in Australia and on one occasion in 2003, to make application for his wife’s Spouse (Migrant) visa.

(i)The applicant had fairly consistent work while living in Japan.  He and his wife rented accommodation and maintained residences in Japan on long leases.  He did not maintain a residence in Australia from 1996 until December 2007.

(j)The applicant has family ties in Australia and in Japan.  His parents and his siblings live in Australia, along with other relatives.  His wife’s family lives in Japan.

(k)The applicant did not lodge income tax returns for ten years while he was out of Australia.  He did not lodge income tax returns in Japan.

(l)The applicant made a small profit while living in Japan from importing cars into Australia which his brother, who is a mechanic, would fix and they would then sell in the local Australian market.  The profits from those ventures were not declared in Australia for tax purposes.

(m)The applicant’s wife made application for a Spouse (Migrant) visa on 3 December 2003.  She was granted the interim Spouse (Provisional) visa and advised of her successful application on 3 March 2004.  At any time after that date she could have entered and remained in Australia, pending a decision on her Spouse (Migrant) visa.  Her initial visa gave her no entitlement to Social Security income support until such time that she was granted the Spouse (Migrant) visa.

(n)The applicant’s wife obtained permanent residency in Australia in January 2006 when she was granted a Spouse (Migrant) visa.

(o)The applicant and his wife and children returned to Australia in December 2007 with the intention of thereafter remaining permanently.

(p)The applicant contacted the Centrelink call centre at Wendouree on 13 August 2007 and made application for FTB and Baby Bonus with respect to his younger child, Clara.

(q)There is no evidence that Clara suffered from any health problems that would have prevented her flying in the first 13 weeks of her life.

consideration and application of the law

30. The term “Australian resident” is set out in the FA Act and is to be defined by reference to the Act. Section 7(3) of the Act provides assistance to the decision-maker in determining whether a person is residing in Australia.

31.     The Tribunal must determine whether, within 13 weeks of the date of Clara’s birth, the applicant was residing in Australia within the meaning of the legislation and whether he was residing in Australia within the meaning of the legislation on the date that he applied for FTB.  The period that is to be considered is the period from March to August 2007.  During all of that period the applicant was absent from Australia and residing in Japan.

32. Section 7(3) of the Act requires consideration of the nature of the accommodation used by a person in Australia during the relevant period. The applicant did not enter Australia at all during that time. During his earlier visits to Australia with his wife he would stay with relatives and friends. He did not keep any accommodation in Australia after his former matrimonial home was sold in 1998 and until he purchased a property in 2006. He held that subsequent property in a Family Trust, of which he had control, and from the date of purchase until he returned to Australia in 2007 it was rented to tenants.

33.     The applicant maintained contact with his Australian family throughout the entire period that he was living in Japan.  This is to be expected as he clearly has a good relationship with his family.  He resided with his immediate family in Japan during the relevant period and he had his extended family in Japan by way of his wife’s family.

nature and extent of his employment business or financial ties with australia

34.     By 2007 the applicant had purchased the property in Adelaide via the Family Trust.  This purchase was made with the long-term intention of returning eventually to Australia to live.  That property was rented out at the time by the Trust.  The applicant’s employment was in Japan during the relevant period.  He held a National Australia Bank (NAB) account in his name, with his Tokyo address.  He and his wife also held a joint NAB account with the address being his address in Tokyo.  He presented to the Tribunal a bank statement for the account in the joint names of himself and his wife for the period July 2006 to January 2007.  This showed a zero opening balance and no activity on that account during that time.  He held a Family Trust account into which rentals from the rental property were paid and that was in the name of the Halls Family Trust, with his father’s address in Crafers used as the relevant address.

35.     The applicant did not lodge personal income tax returns in Australia during the period that he was residing in Japan.  He also did not lodge income tax returns in Japan.

examination of the nature and extent of his assets located in australia

36.     The applicant did not own assets in Australia between 1998 and 2006.  He then set up a Family Trust to purchase a property which was rented out at the relevant period.  His furniture, belongings and personal effects were in Japan during the relevant period.

the frequence and duration of a person’s travel outside australia

37.     The Tribunal refers to its findings about the extent to which the applicant was living outside Australia between 1996 and December 2007.  He was essentially outside Australia and on a percentage basis, he spent less than one percent of his time in Australia and 99 percent of his time in Japan, with all his employment activity taking place in Japan and no employment activity taking place in Australia.

38.     The ordinary meaning of the word “reside” is defined by the Macquarie Dictionary in the following terms:

“to dwell permanently or for a considerable time; have one’s abode for a time: …”

39.     The New Shorter Oxford English Dictionary defines it in the following terms:

“… Dwell permanently or for a considerable time, have one’s regular home in or at a particular place. …”

40.     The leading decision where the concept “usual place of residence” was considered is that of Justice Wilcox in Hafza v Director-General of Social Security (1985) 60 ALR 674. His Honour considered the earlier authorities with respect to residence and abode and commented as follows:

“There is a plethora of decisions, arising in various contexts but predominantly matrimonial causes and revenue cases, relating to the legal concept of residence. As a general concept residence includes two elements: physical presence in a particular place and the intention to treat that place as home; at least for the time being, not necessarily forever. The concept was explained in a taxation case, Koitaki Para Rubber Estates Limited v The Federal Commissioner of Taxation [1941] HCA 13; (1941) 64 CLR. 241 at 249, by Williams J: ‘The place of residence of an individual is determined, not by the situation of some business or property which he is carrying on or owns, but by reference to where he eats and sleeps and has his settled or usual abode. If he maintains a home or homes he resides in the locality or localities where it or they are situate, but he may also reside where he habitually lives even if this is in hotels or on a yacht or some other abode.’

Physical presence and intention will coincide for most of the time. But few people are always at home. Once a person has established a home in a particular place even involuntarily (see Commissioners of Inland Revenue v Lysaght [1928] AC 234 at 248 and Keil v Keil [1947] VLR 383) a person does not necessarily cease to be resident there because he or she is physically absent. The test is whether the person has retained a continuity of association with the place (Levene v Commissioners of Inland Revenue [1928] UKHL 1; [1928] AC 217 at 225 and Judd v Judd (1957) 75 WN (NSW) 147 at 149) together with an intention to return to that place and an attitude that that place remains ‘home’ (see Norman v Norman (1969) 16 FLR 231 at 236). It is important to observe firstly, that a person may simultaneously be a resident in more than one place, - see the facts of Lysaght and the reference by Williams J to ‘a home or homes’ - and, secondly, that the application of the general concept of residence to any particular case must depend upon the wording, and underlying purposes, of the particular statute in relation to which the question arises. But, where the general concept is applicable, it is obvious that, as residence of a place in which a person is not physically present depends upon an intention to return and to continue to treat that place as ‘home’, a change of intention may be decisive of the question whether residence in a particular place has been maintained.”

41.     The concept of “ordinarily reside” probably has a wider meaning than the concept of “reside”.  In Re Firdousi and Department of Family and Community Services (2005) 89 ALD 436, DP Forgie comments as follows:

“26. It is clear from these authorities that the notion of ‘reside’ and ‘ordinarily reside’ have common elements when used in ordinary language. Both require that there be some physical presence and some intention to live or dwell in a place. The difference between them comes from differences of degree. That is to say, it comes from differences of degree in physical presence and differences of degree of intention. A person who, for example, lives or dwells continuously, or relatively so, in a place and intends to do so may be said to be ordinarily resident in that place. A person who lives or dwells in a place for only a short period and who intends nothing else may be said to be resident, but not ordinarily resident, in that place for that period. Given the myriad of ways in which people arrange their affairs, it is impossible to go beyond generalities when considering the meaning of the words in the absence of any particular context. It is impossible to point to the precise degree at which a person will be said to be a resident in a place, as opposed to a visitor, and the precise point at which a person will not only be resident in a place but also ordinarily resident there. Once the words are interpreted in a particular factual context, it may be possible to draw on that context to point to the degree with some precision.”

42. The Tribunal notes that the FA Act and the Act refer to the arguably narrower concept of “resident” rather than “ordinarily resident”. To be an Australian resident the applicant must fulfil the criteria of being “resident in Australia”.

43.     The Tribunal was referred to the matter of Re Wybrow and Secretary, Department of Social Security (AAT 8321, 19 October 1992) which was also considered by the SSAT as being possible authority for the applicant’s contention that he was resident in Australia at the time that his child, Clara, was born and at the time that he made application for FTB.  That case is distinguishable from the present case.  The applicant in that case retained a home base in Australia at all times during his absence.  His immediate family remained in Australia and all his substantial ties remained in Australia. 

44.     In this case the applicant effectively severed his last significant tie with Australia when he sold the property in 1998 and thereafter the Tribunal is satisfied that, in any ordinary meaning of the word, Japan is where he resided and was even ordinarily resident in the wider sense until he decided to finally come back to Australia in December 2007. 

45.     The Tribunal attributes no significance to the fact that he was issued with a Medicare card in March 2007.  The Tribunal is not obliged to look to Medicare legislation and the criteria used by other legislation and other Departments when pursuing such entitlements.  However, from what was provided to the Tribunal, that Medicare card would only have provided medical assistance to the applicant and the relevant child were they receiving treatment in Australia in any event.

46.     There is no doubt that the applicant considered Australia to be his home in the ultimate emotional sense.  Nevertheless, his whole life was in Japan for more than 10 years and until December 2007.  During that time his place of abode, his personal possessions and his immediate family were residing with him in Japan.  He would visit Australia for special events and to see family, which is characteristic of anyone who becomes an expatriate, but who wants to from time to time visit their relatives in Australia.  His wife had the right of multiple re-entry to Australia and to live in Australia from the time that her visa was granted in 2004 and then had a Spouse (Migrant) visa from 2006 which would have enabled the family to return to live in Australia had they so desired.  However, it was still another three years from the date of grant of the first visa before they elected to make the move to Australia.  His home was in Japan.

47.     The fact that an Australian bank was used, in Australia, for the relevant period, is not, in the Tribunal’s view, sufficient to make the applicant an Australian resident.  In this day of instant electronic communications, it is possible to have an account in one country and to transact on that account on a day to day basis from another country.  The applicant chose to use a NAB account.  This may have been because he had a NAB account when he left Australia and it was just as easy for him to continue banking with that bank while in Japan.  Bank account statements were produced to the Tribunal, but there is no evidence as to what was happening throughout the entire period in Japan with respect to his accounts or his wife’s accounts.  Even if the evidence was that he banked solely with the NAB throughout his time in Japan, the Tribunal is not satisfied that should ground his argument that he was residing in Australia at the relevant time.

48.     The Tribunal agrees with the SSAT’s analysis of the situation, which was that the applicant’s primary place of residence throughout the relevant period was Japan, and although he ultimately intended to return to Australia to make his home, that remained an uncertain point in the future until he finally made his decision.  It is not clear whether the refusal of his application for FTB may have been the final point at which he and his wife decided it was time to return to Australia. 

49.     Having considered all the evidence, the Tribunal is satisfied that the applicant does not satisfy the requirement of being an Australian resident within 13 weeks of Clara’s birth or at the time that he applied for FTB in August 2007.

50.     The decision under review is affirmed.

I certify that the 50 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member
L Hastwell

Signed:         ............J Coulthard..........................................
  Associate

Date of Hearing  3 June 2008
Date of Decision  12 August 2008
Advocate for the applicant        In person

Advocate for the respondent     Ms M Welfare

Centrelink Legal Services Branch