Keeton-Hay and Secretary, Department of Social Services (Social security)

[2024] ARTA 473

Keeton-Hay and Secretary, Department of Social Services (Social security) [2024] ARTA 473 (18 November 2024)

Applicant:  Mrs Keeton-Hay

Respondent:  Secretary, Department of Social Services

Tribunal Number:   2024/B190478 

Tribunal:  Member N Foster

Place:Brisbane

Date:18 November 2024

Decision:The Tribunal sets aside the decision under review and remits the matter for reconsideration in accordance with the order that Mrs Keeton-Hay’s entitlement to family tax benefit for the 2023–24 year is to be calculated using the child maintenance she actually received in that year.

CATCHWORDS

SOCIAL SECURITY – family assistance payments – a third party carer – should not be deemed to receive the full amount of maintenance – decision under review set aside and remitted

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted from this decision and replaced with generic information pursuant to subsections 161(1B) of the A New Tax System (Family Assistance) (Administration) Act 1999

Statement of Reasons

BACKGROUND

1. This review is about whether Mrs Keeton-Hay has been paid her correct entitlement to family tax benefit for the 2023–24 year.

2. During the 2023–24 year Services Australia (Centrelink) paid family tax benefit to Mrs Keeton-Hay in fortnightly instalments for various children she had in her care.  In calculating Mrs Keeton-Hay’s rate, Centrelink took into account annual amounts of child maintenance that Child Support had assessed as being payable to her and which were to be collected privately.

3. On 20 April 2024 Centrelink reduced the rate of Mrs Keeton-Hay’s family tax benefit to zero after receiving notification from Child Support that her entitlement to child support had increased.  After Mrs Keeton-Hay ended her child support assessments, Centrelink reinstated her fortnight instalments of family tax benefit.  On 23 July 2024 Centrelink reconciled Mrs Keeton-Hay’s entitlement to family tax benefit for the 2023–24 year and paid her a top-up amount of $2,058.62.

4. In the meantime, Mrs Keeton-Hay had requested a review of the amount of family tax benefit that was paid to her.  On 27 October 2023 an authorised review officer affirmed Centrelink’s decision.  In doing so, the authorised review officer found that, as Mrs Keeton-Hay had been collecting child maintenance privately, the maintenance figure that was used for family tax benefit was the amount she should have been paid under the child support assessment, as it is assumed that this is what was collected.

5. Mrs Keeton-Hay applied to the Administrative Appeals Tribunal[1] (the AAT) on 16 August 2024.  The application was heard by the Tribunal on 18 November 2024, with Mrs Keeton-Hay and her partner and representative, Mr [A], appearing by telephone.

CONSIDERATION

[1] From 14 October 2024 the AAT became the Administrative Review Tribunal (the Tribunal). Under the transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (the Transitional Act), applications for review to the AAT that were not finalised before 14 October 2024 are taken to be an application for review to the Tribunal. The Transitional Act gives the Tribunal the authority to continue and finalise any aspect of the review not already completed by the AAT.

Has Mrs Keeton-Hay been paid the correct amount of family tax benefit?

1. [Mr A] told the Tribunal that Mrs Keeton-Hay was disputing the assessment of her entitlement to family tax benefit for the 2023–24 year because she did not receive the child support figures cited by the authorised review officer.  [Mr A] referred the Tribunal to the bank statements that were provided with Mrs Keeton-Hay’s application, which indicated that she received a total of $339.25 in child support during that year.  These were occasional bank transfers, which Mrs Keeton-Hay assumes were made by Ms [B], the mother of her younger grandchildren.

2. Mrs Keeton-Hay told the Tribunal that the only reason there was a maintenance assessment for her grandchildren is because a Centrelink officer in Darwin told her in 2009 that she was required by law to apply for child support.  It is only recently that she learned that she did not have to apply at all.  She has not received any child support from Mr [C] or Ms [D], despite the assessments by Child Support.  More recently, Mr [C] has been paying the school fees for her younger grandchildren at his own suggestion.  Although Mrs Keeton-Hay and [Mr A] organised the children’s enrolment at a Christian college, they have never received any money from Mr [C]; he instead pays the fees directly.  Ms [B]’s current child support payments are presumably for [Child 1] who, unlike the other children, is not a child of Mr [C].

3. Mrs Keeton-Hay confirmed with the Tribunal that she cancelled her child support cases in May 2024 after Centrelink stopped paying her family tax benefit.  She said that she had previously tried to stop the child support assessments in 2021–22 but they somehow continued.  Even now, she is confused about what is happening given that Child Support keeps sending paperwork to her.  As Mrs Keeton-Hay never received the maintenance amounts that Centrelink has assessed, [Mr A] contended that only the child support that she actually received should be taken into account.

4. In making its decision, the Tribunal must apply the law in the A New Tax System (Family Assistance) Act 1999 (the FA Act). Under Schedule 1 to the FA Act, a person’s rate of family tax benefit is subject to a maintenance income test whereby their rate is reduced by child maintenance that the person has received. Where there is an administrative assessment of child maintenance by Child Support and a person has arranged to collect maintenance privately, clause 20D of Schedule 1 states the person may be deemed to receive all of their maintenance entitlement in the following circumstances:

   20D   Working out amounts of child maintenance for administrative assessments privately collected

   (1)  This clause applies if, during a period in an income year:

   (a)  an individual is entitled to receive an amount of child maintenance for an FTB child of the individual under a liability under an administrative assessment (within the meaning of the Child Support (Assessment) Act 1989 ); and

   (b)  the liability is not an enforceable maintenance liability (within the meaning of the Child Support (Registration and Collection) Act 1988 ); and

   (c)  the child maintenance is not maintenance to which clause   20B applies; and

   (d)  the Secretary considers that it is reasonable for the individual to take action to obtain the amount.

   Individual taken to have received full entitlement

   (2)  For the purposes of this Act, the individual is taken to have received, for the period in the income year, the amount of child maintenance for the child that the individual is entitled to receive under the liability, disregarding so much of that amount as is attributable to the individual receiving disability expenses maintenance.

10.In calculating Mrs Keeton-Hay’s entitlement to family tax benefit for the 2023–24 year, Centrelink has applied clause 20D to deem her to receive all of the maintenance that she was entitled to collect until her child support cases were ended on 16 May 2024. Mrs Keeton-Hay and [Mr A] have taken issue with this decision, contending that only the child support that was actually received should be taken into account when calculating her rate of family tax benefit.

11.The Tribunal observes that the intention behind clause 20D is to simplify the calculation of family tax benefit where a person is collecting maintenance privately. Whereas Child Support automatically notifies Centrelink of the maintenance it collects, Centrelink has no quick and easy way of determining how much maintenance each family tax benefit recipient who collects it privately actually receives. Rather than asking each of these family tax benefit recipients to provide proof of the maintenance they collected over the course of the tax year, clause 20D instead allows Centrelink to automatically base their entitlement on the annual amount of the maintenance that they were entitled to collect.

12.Although clause 20D deems a person to receive their full entitlement to child maintenance irrespective of whether it was actually collected or not, the Tribunal is mindful that this deeming only occurs if all of the pre-conditions in subclause 20D(1) are satisfied. In particular, paragraph 20D(1)(d) states that the decision-maker must consider it reasonable for the person to take action to obtain the amount of child maintenance. This is an issue that bears closer examination in Mrs Keeton-Hay’s case.

13.In particular, the Tribunal notes that Mrs Keeton-Hay is the grandmother of most of the children for whom Child Support had made the child maintenance assessments in question and, in the case of [Child 1], is not related to him at all.  As observed by the authorised review officer in their notes of decision, Mrs Keeton-Hay did not need to have a child support case because she was a third party carer.  This reflects policy guidelines in the Family Assistance Guide (the Guide), which state, at 3.1.5.60:

Maintenance action is not required if the child is in the care of someone who is not their parent.

Example: Grandparents caring for a grandchild do not have to take maintenance action.

14.For her part, Mrs Keeton-Hay told both the authorised review officer and the Tribunal that she had only applied for a maintenance assessment through Child Support because she was previously advised by a Centrelink officer that she had to do so, else she would only be paid family tax benefit at a reduced rate.  The Tribunal observes that such advice is contrary to the Guide and has resulted in Mrs Keeton-Hay’s rate of family tax benefit being reduced by child maintenance that she was not actually required to seek and which, for the most part, was not paid to her.  As indicated by the bank statement information provided by Mrs Keeton-Hay as part of her application to the Tribunal, she received a total of $339.25 in child support in the 2023–24 year, as opposed to the annual maintenance sums ranging between $6,193.50 and $22,316.29 that were used by Centrelink to reduce her rate of family tax benefit.  The Tribunal also notes that, once Mrs Keeton-Hay was made aware in May 2024 that she could end her child support assessments, she promptly did so without any penalty and became entitled to a much higher rate of family tax benefit.

15.Given that Mrs Keeton-Hay was not legally required to apply for maintenance for the children in question, given that she only did so on the basis of incorrect advice from Centrelink and given that she never actually received the large maintenance amounts assessed for the 2023–24 year, the Tribunal does not consider it was reasonable for her to take action to obtain the maintenance amounts assessed by Child Support in respect of that year. This means that clause 20D of Schedule 1 to the FA Act does not apply to Mrs Keeton-Hay and that she should not be deemed to receive the full amount of maintenance assessed by Child Support for that year.

16.Instead, the Tribunal finds that Mrs Keeton-Hay’s entitlement to family tax benefit for the 2023–24 year should be calculated using the amount of child maintenance she actually received in that year.  The Tribunal will therefore set aside the decision under review and return Mrs Keeton-Hay’s matter to Centrelink so that this can occur.

17.As discussed with Mrs Keeton-Hay and [Mr A] at the conclusion of the hearing, the Tribunal does not have jurisdiction to review any other Centrelink decisions, including the calculation of her current rate of family tax benefit.  If Mrs Keeton-Hay is concerned that her current rate of payment is wrong or that child maintenance is still being assessed incorrectly, she should contact Centrelink to discuss this further.

DECISION

The Tribunal sets aside the decision under review and remits the matter for reconsideration in accordance with the order that Mrs Keeton-Hay’s entitlement to family tax benefit for the 2023–24 year is to be calculated using the child maintenance she actually received in that year.

Date of hearing:	Monday, 18 November 2024
Representative for the Applicant:	Mr [A]