Horsey and Secretary, Department of Family and Community Services

[2003] AATA 802

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 802

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2002/950

GENERAL ADMINISTRATIVE DIVISION		)
Re		ROSEMARIE HORSEY

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Senior Member KL Beddoe

Date15 August 2003

PlaceBrisbane

Decision

The Tribunal decides:

(a)     to set aside the decision under review; and

(b)     to remit the matter to the respondent with the direction that the Maintenance Income Test should be recalculated on the basis that only maintenance income received in relation to Daniel is to be included in working out the annual rate of the applicant’s maintenance income.

Liberty to apply is reserved to both parties.

(Sgd)     KL Beddoe        

Senior Member

CATCHWORDS

SOCIAL SECURITY – benefits and entitlements – family tax benefit – overpayment – whether debt properly raised – calculation of maintenance income – “maintenance income” – “FTB child” – whether monies received for maintenance of non-FTB children should be included as maintenance income

A New Tax System (Family Assistance) Act 1999 Part A and B, Schedule 1

A New Tax System (Family Assistance) (Administration) Act 1999 ss 71, 101, 102

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

Beadle v Director-General of Social Security (1985) 60 ALR 225

REASONS FOR DECISION

15 August 2003  Senior Member KL Beddoe          

1.      An Authorised Review Officer decided that the applicant had been overpaid as to Family Tax Benefit (“Benefit”) in the fiscal year ended 30 June 2001.

2.      The Authorised Review Officer decided that the overpayment had occurred as follows:

(a)there was a prior claim for overpayment whereby the applicant had been overpaid $4,058.19 for Benefit in respect of Joshua for the period 5 April 2000 to 20 February 2001 and for Jacqueline for the period 27 May 2000 to 20 February 2001;

(b)the applicant had been paid Benefit under Part A and Part B of Schedule 1 of the A New Tax System (Family Assistance) Act 1999 (“the Family Assistance Act”);

(c)in respect of the Benefit paid under Part A of Schedule 1 for the year ended 30 June 2001, the Authorised Review Officer took into account the receipt of $5,010.66 by the applicant and treated that amount as maintenance income;

(d)the maintenance income free area was said to be $1,007.40 for the year ended 30 June 2001 and the amount by which the maintenance received exceeded this amount reduced the Part A Benefit by 50 cents in the dollar to an amount of $421.90 which was less than the base rate Part A Benefit;

(e)the base rate Part A Benefit was $974.55 in respect of Daniel but, as care for Daniel was shared, the applicant’s share was calculated at 80%, amounted to $779.64;

(f)the Part B Benefit maximum rate for the year ended 30 June 2001 was $1,814.05 and the applicant was entitled to 80% of this amount, ie $1,451.24;

(g)total Benefit entitlement for the year was $779.64 + $1,451.24 being an amount of $2,230.88;

(h)the applicant was paid $8,715.33 in Benefit resulting in an overpayment of $6,484.45;

(i)the previous decision that had raised an overpayment of an amount of $4,058.19 related in part to the year ended 30 June 2001 in an amount of $2,580.30 which related to the overpayment for Joshua and Jacqueline (paragraph (a) above) (the Authorised Review Officer made an error of $1 which I am unable to resolve and have ignored);

(j)the overpayment of $6,484.45 was therefore reduced by $2,580.30, being the amount previously claimed as overpaid, so that the resulting overpayment was $3,904.15, the amount now in dispute.

3. Section 102 of the A New Tax System (Family Assistance) (Administration) Act 1999 (“the Administration Act”) provides that the respondent may decide to waive the Commonwealth’s right to recover debts arising under or as a result of the Administration Act that are included in a class of debts specified by the Minister by determination in writing. Section 101 of the Administration Act provides in effect, and subject to the requirements of the section, for waiver of a debt arising from an overpayment in special circumstances.

4. Section 71 of the Administration Act provides, in effect, that overpaid amounts in respect of family assistance shall be a debt due to the Commonwealth.

5.      The documents before the Tribunal include T3 a copy of an unexecuted document entitled Family Assistance Estimate Tolerance (Transition) Determination 2001 (“the Determination”) in the name of the Minister for Family and Community Services purporting to be made under section 102 of the Administration Act.

6. The respondent has proceeded on the basis of the Determination and treated $1,000 of the applicant’s debt as being waived in accordance with the Determination. It is not apparent, however, that there has been a decision that the applicant should have the benefit of the Determination.

7. In the event, the debt still in issue is $2,904.15, being the overpayment amount of $3,904.15 less the $1,000 apparently waived in accordance with the Determination.

8. At the hearing the applicant appeared in person and Mr McQuinlan represented the respondent. The documents lodged in the Tribunal pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 were before the Tribunal as the “T” Documents and further documents were tendered and marked as exhibits.

9.      Oral evidence was given by the applicant.

10.     The facts are not in dispute and may be summarised as follows:

(a)the applicant has three children, Jacqueline (18), Joshua (17) and Daniel (10);

(b)the applicant was entitled to Benefit payments in the year ended 30 June 2001;

(c)the father of two children was liable to pay $710.08 monthly to the applicant in accordance with an assessment by the Child Support Agency from 16 June 2000;

(d)Centrelink was not advised of this assessment by the Child Support Agency and calculated Benefit from 1 July 2000 on the basis of monthly maintenance of $238.75 ($2,864.99 on annual basis) later adjusted to $264 per month ($3,168.47 on annual basis);

(e)the applicant actually received $5,010.66 in child maintenance during the financial year which included an amount for arrears of payments assessed to be payable before 1 July 2000 by the Child Support Agency;

(f)the applicant’s circumstances in relation to care of her children changed and she advised the Child Support Agency but did not advise Centrelink because, I accept, she understood the agencies cross-matched their data;

(g)the change in circumstances was that the applicant no longer had the care of Jacqueline and Joshua at any time in the year ended 30 June 2001 but Centrelink only became aware of the change of circumstances on 22 February 2001 and ceased Benefit payments in respect of them effective from 20 February 2001;

(h)Document T10 shows the payments of maintenance through the Child Support Agency, in the applicant’s favour, for the year ended 30 June 2001 with a total of $5,010.66 in respect of the period 5 July 2000 to 6 June 2001.

Consideration

11.     The essence of the applicant’s case is that it is unfair that maintenance payments relating to periods prior to 1 July 2000 are taken into account in the year ended 30 June 2001.

12.     The respondent contended that the debt was correctly raised and calculated and the write-off and waiver provisions do not apply in the circumstances of this case.

13.     As I understand the respondent’s case, the overpayment in issue has been calculated on the basis of maintenance payments received by the applicant in the year ended 30 June 2001.  It is not clear to me as to who those payments relate to but it is likely the payments relate to Daniel and Joshua and possibly Jacqueline.

14.     Exhibit B, which is a copy of an assessment by the Child Support Agency, sets an annual rate of payment of $8,521 in respect of Joshua and Daniel for the period 16 June 2000 to 30 November 2000.  Presumably, that assessment was no longer appropriate when the applicant ceased to care for Joshua before 1 July 2000.  As to when the applicant advised the change of circumstances to the Child Support Agency is not before me.

15. Schedule 1 of the Family Assistance Act sets out the Family Tax Benefit rate calculator. Division 5 provides for a maintenance income test which essentially provides for calculation of a maintenance income excess which reduces the Benefit payable.

16.     Step 1 in the rate calculator, at clause 20, reads, in part, as follows:

“Step 1.    Work out the annual rate of the individual’s maintenance income. …”

17.     “Maintenance income” is defined in section 3 of the Family Assistance Act to mean, in relation to an individual:

“(a)child maintenance – that is, the amount of a payment or the value of a benefit that is received by the individual for the maintenance of an FTB child of the individual and is received from:

(i)        a parent of the child; or

(ii)       the partner or former partner of a parent of the child; or …”

18.     While the definition of “maintenance income” refers to “the amount of a payment…received” the first step of the maintenance income test refers to the annual rate and not the amount of a payment received.  Further, the context of both provisions indicates that the definition refers to, and Step 1 of the test provides for, the maintenance income in respect of an FTB child.

19.     “FTB child” has the meaning given by section 22 of the Family Assistance Act which relevantly provides that an individual is an FTB child of the adult if:

“(a)the individual is aged under 18; and

(b)the adult is legally responsible (whether alone or jointly with someone else) for the day-to-day care, welfare and development of the individual; and

(c)the individual is in the adult’s care; and

(d)the individual is an Australian resident, is a special category visa-holder residing in Australia or is living with the adult.”

20.     It is my understanding of the evidence that during the year ended 30 June 2001 the only child in the applicant’s care was Daniel.  Neither Jacqueline nor Joshua was in her care for that year.  That satisfies me that neither was an FTB child in relation to the applicant for the year ended 30 June 2001.

21. Annualised maintenance income is determined by section 20A of the Family Assistance Act. It is not necessary to set the provisions of that section out but I am satisfied that the annualised amount of maintenance income only refers to maintenance income received in relation to an FTB child.

22.     The receipt of maintenance income in relation to a non-FTB child – in this case Joshua and possibly Jacqueline, is an unusual event, in my view.  While there is nothing before me about the manner in which parents pay maintenance in respect of non-FTB children, I am prepared to accept that the circumstances of this case are such as to be unusual, uncommon or exceptional and within the concept of special circumstances as explained by the Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 and the Federal Court in Beadle v Director-General of Social Security (1985) 60 ALR 225.

23. However, the applicant cannot have the benefit of a favourable exercise of discretion under section 101 of the Administration Act because she failed to notify her change of circumstances and maintenance payments relating to the children, preferring to rely on the Child Support Agency to tell the respondent. The obligation to advise a change of circumstances to the respondent, is acknowledged by the applicant in Document T19.

24.     In the circumstances, the decision under review should be set aside and the matter remitted to the respondent with a direction that the overpayment be recalculated on the basis that maintenance payments received in relation to Joshua and/or Jacqueline during the year ended 30 June 2001 are to be excluded from annualised maintenance income for the purposes of the maintenance income test.

I certify that the 24 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member KL Beddoe

Signed:         Sarah Oliver
  Associate

Date of Hearing  13 May 2003 (at Gladstone)
Date of Decision   15 August 2003

The Applicant appeared in person
For the Respondent                  Mr R McQuinlan