Kerferd and Secretary, Department of Education, Employment and Workplace Relations
[2008] AATA 446
•28 May 2008
CATCHWORDS – SOCIAL SECURITY – child care benefit – CCB% – date from which change takes effect – effect of public holiday – decision set aside and substituted
CATCHWORDS –PRACTICE AND PROCEDURE – family tax benefit – jurisdiction to review SSAT decision when it decided it had no jurisdiction – identifying power under which decision made – whether jurisdiction excluded by legislation – jurisdiction.
CATCHWORDS – SOCIAL SECURITY – family tax benefit – maternity immunisation allowance – method of payment – whether may be paid by cheque – decisions affirmed.
A New Tax System (Family Assistance) Act 1999ss 41(1), 42, 43, 47, 76(1), 82(3)(a) and Schedule 2
A New Tax System (Family Assistance) Administration Act 1999 ss 3, 7, 7A, 12, 13, 15, 15A, 16, 22, 23, 25, 26A, 27A, 27, 43, 48, 49(1), 50B, 51, 51B, 50F, 50G, 50J, 55, 55A, 55B, 55C, 59D, 60B, 65, 65A, 65B, 65BA, 65BB, 109A, 108, 109A, 109C, 109D, 111, 113 and 142
Acts Interpretation Act 1901 s 36(2)
Administrative Appeals Tribunal Act 1975 ss 3, 25(4) and 37
Collector of Customs (NSW) vBrian Lawlor Automotive Pty Ltd (1979) 2 ALD 1; 24 ALR 307
Crompton v Repatriation Commission (1993) 30 ALD 45
Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577; 2 ALD 60
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Re Watson and Secretary, Department of Family and Community Services (2003) 74 ALD 523; [2003] AATA 599
Walker v Secretary, Department of Social Security (1997) 75 FCR 493; 147 ALR 263;
Ward v Nicholls (1988) 16 ALD 353; 84 ALR 471
DECISIONS AND REASONS FOR DECISIONS [2008] AATA 446
ADMINISTRATIVE APPEALS TRIBUNAL )
) 2007/1679
GENERAL ADMINISTRATIVE DIVISION )Re:DAVID KERFERD
Applicant
And:SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
Respondent
DECISION
Tribunal: Deputy President S A Forgie
Date: 28 May 2008
Place: Melbourne
Decision:The Tribunal:
(1)set asides the decision of the Social Security Appeals Tribunal dated 28 March 2007; and
(2)substitutes a decision that the applicant’s CCB% was 0% from 25 December 2006 until 2 January 2007.
S A FORGIE
Deputy President
ADMINISTRATIVE APPEALS TRIBUNAL )
) 2007/1681
GENERAL ADMINISTRATIVE DIVISION ) 2007/1682Re:DAVID KERFERD
Applicant
And:SECRETARY, DEPARTMENT OF FAMILIES, HOUSING COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISIONS
Tribunal: Deputy President S A Forgie
Date: 28 May 2008
Place: Melbourne
Decisions:The Tribunal:
(1)in application No 2007/1681:
(a)sets aside the decision of the Social Security Appeals Tribunal dated 28 March 2007; and
(b)substitutes a decision declining to make a determination under s 27A(2) of the A New Tax System (Family Assistance) Administration Act 1999 that the consequence in s 27A(3) does not apply; and
(2)in application No 2007/1682:
the Tribunal affirms the decision of the Social Security Appeals Tribunal dated 28 March 2007.
S A FORGIE
Deputy President
REASONS FOR DECISIONS
Mr David Kerferd applied for review of three decisions made by the Social Security Appeals Tribunal (SSAT) relating to three claims that he had made under the A New Tax System (Family Assistance) Act 1999 (FA Act). One related to the payment of Child Care Benefit for Approved Care (CCB), the second to the payment of family tax benefit by instalment (FTB) and the third to maternity immunisation allowance (MIA). Decisions had been made that he was entitled to receive each payment.
In so far as the CCB is concerned, Mr Kerferd asked that the CCB%[1] be reduced from 100% to 0% from 25 December 2006 until he advised Centrelink[2] that it should be restored to 100% again. A delegate changed the rate but from a different date in accord with administrative policy. I have decided that administrative policy cannot override the provisions of the FA Act or of the A New Tax System (Family Assistance) Administration Act 1999 (FAA Act) and have substituted a decision that Mr Kerferd’s CCB% be reduced to 0% from 25 December 2006 until he notified the respondent that his child had returned to care by an approved child care service.
[1] “CCB% in respect of an individual, means the CCB % calculated in respect of the individual under subclause 2(2) of Schedule 2 to the Family Assistance Act: A New Tax System (Family Assistance) Administration Act 1999”, FAA Act s 3(1)
[2] Centrelink, which is also known as the Commonwealth Services Delivery Agency, was established under the Commonwealth Services Delivery Agency Act 1997. Its Chief Executive Officer has entered arrangements with the respondents in this case to provide services for them in relation to pensions, benefits and allowances paid or payable under the legislation with which I am concerned in this case. Each of the respondents may delegate powers to the CEO or to an employee ofCentrelink
The remaining two matters concern their payment. Mr Kerferd has closed the bank accounts that he nominated for their payment and the payments of FTB and MIA have been returned by the bank to Centrelink. In relation to FTB, the SSAT decided that it did not have jurisdiction to review the decision. I do not consider that is an impediment to my reviewing the substantive decision. My decision is to decline to set aside a requirement made by Centrelink that Mr Kerferd give it details of a bank account into which it may pay FTB to which he is entitled. I have reached the same conclusion in relation to payment of MIA and have declined to make a direction that it be paid in a way other than by credit to a bank account nominated and maintained by Mr Kerferd.
APPLICATION NO. 2007/1679: Child Care Benefit
The background
In 2006, the CCB% calculated in respect of Mr Kerferd was 100%. On 18 December 2006, he contacted Centrelink and asked that his CCB% be reduced to 0% with effect from 25 December 2006. He was taking holidays at that time and would contact Centrelink when he returned to ask that the rate be restored. The Centrelink officer advised Mr Kerferd that the rate might have to be changed from
22 December 2006 as it may not be possible to change it from a future date.[3] On 22 December 2006, Mr Kerferd contacted Centrelink once more to be told that his CCB% had been reduced to 0% with effect from 18 December 2006. Mr Kerferd expressed his dissatisfaction with that outcome as he had asked that the reduction take place on 25 December 2006.[4][3] Documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (T1679 documents) at 300.
[4] T1679 documents at 304
Other communications took place between Mr Kerferd and Centrelink officers during December 2006. In a conversation with Centrelink on 22 December 2006, Mr Kerferd advised that he wanted his CCB% changed to 0%. It would appear that an officer of Centrelink was unable to contact Mr Kerferd with regard to that matter. It is apparent from the notes kept by the officer that he was unable to alter Mr Kerferd’s CCB% from 25 December 2006 due to public holidays. In view of that, Mr Kerferd’s CCB% had been altered with effect from 22 December 2006. This decision had been taken as Centrelink had wanted to avoid Mr Kerferd’s being undercharged by the child care centre due to a higher % reduction.[5] On 28 December 2006, Mr Kerferd contacted Centrelink and repeated that he wanted the CCB% to be 0% from 25 December 2006.[6] In a letter dated 28 December 2006, Centrelink advised Mr Kerferd that the CCB was 0% from that day.[7]
[5] T1679 documents at 309
[6] T1679 documents at 311
[7] T1679 documents at 315
On the following day, 29 December 2006, Mr Kerferd telephoned Centrelink to protest that the CCB had been changed with effect from 18 December 2006. He was concerned that he would have to provide full fees to the child care provider for the week of 18 December 2006. A Centrelink officer advised him that changes that favour a recipient within a week take effect for the whole of the week and that changes adverse to the recipient take effect from the following week. In view of that, a Centrelink officer restored the rate of Mr Kerferd’s CCB to 100% for the week of 18 December 2006 and then reduced it to 0% from 28 December 2006 with effect from 1 January 2007 in line with policy.[8]
[8] T1679 documents at 318-319 and see also 322-325
On 2 January 2007, Mr Kerferd asked for a review by an Authorised Review Officer (ARO)[9] and repeated his request on 3 January 2007.[10] A note of his second request states that the officer explained to him that “there are system limitations affecting the date that we use.”[11] I see from a note on the T documents lodged in V2006/1682 that Mr Kerferd advised Centrelink on 2 January 2007 that he wanted to adjust his CCB% so that it was no longer 0%.[12]
[9] T1679 documents at 321
[10] T1679 documents at 327
[11] T1679 documents at 327
[12] T1682 documents at 438
An ARO prepared a draft response to Mr Kerferd purporting to affirm the decision[13] but it was not sent. A different ARO sent instead a letter dated 29 January 2007 in which he reviewed the decision made on 18 December 2006 to apply 0% of CCB from that date. That decision had already been rescinded, he noted, and that meant that Mr Kerferd’s application had been successful. In the reasons that the ARO attached to his letter, he wrote:
“While the letters may appear to indicate that a benefit was not paid for the week commencing 18/12/2006 until 27/12/2006, due to the time lag it takes for the benefit to be paid to the service provider, the following protocols are followed
Child Care Benefits are paid on Monday to the following Sunday basis
In the case of favourable decisions i.e. when the 0% is actually increased, the effective date for the change is the week when the decision is advised
In the case of adverse decisions, i.e. When the % rate is reduced, the change is effective from the following week
In your case, therefore, the statement sent to the providers dated 26/12/2006 advised them to apply 0% rate from 18/12/2006. As this was an adverse decision, the rate would have applied from 1/1/2007 i.e. the following week. On 2/1/2007, they were sent another statement, that the applicable rate be reverted to the full rate. As this was a favourable decision it was to apply from 1/1/2007 and any previous adverse decision for the same date had no effect.”[14]
[13] T1679 documents at 330
[14] T1679 documents at 339
Legislative framework of the FA Act and FAA Act: eligibility for CCB
CCB is the subject of both the FA Act and the FAA Act. Division 4 of the FA Act deals with eligibility for a CCB. Before a person may be paid CCB, the person must first be eligible for it.[15] Only a person who is an individual, as opposed to the wider sense in which the word “person” may be used, may be eligible.[16] Eligibility for CBB is by way of fee reduction for care provided by an approved child care service (service), for a past period of care provided by such a service, for a past period of care provided by a registered carer or by a single payment in substitution because of the death of another person.[17]
[15] FA Act, s 41(1)
[16] FA Act, s 41(2)
[17] FA Act, s 41(2)(a)-(d)
Only eligibility for CCB by way of fee reduction is relevant in this case. A person is conditionally eligible for CCB by way of fee reduction if he or she meets the conditions set out in s 42 of the FA Act. There is no suggestion in this case that those conditions have not been met. Section 43 then deals with eligibility for CCB for a session of care provided by a service. That section provides that:
“An individual is eligible for child care benefit by fee reduction for a session of care provided by an approved child care service to a child if:
(a)when the session of care is provided, a determination is in force under Part 3 of the Family Assistance Administration Act with the effect that the individual is conditionally eligible for child care benefit by fee reduction in respect of the child;
(b)the care is provided in Australia; and
(ba)the care is not provided as part of the compulsory education program in the State or Territory where the care is provided; and
(c)the individual, or the individual’s partner, has incurred a liability to pay for the session (whether or not the liability has been discharged).”
There are limitations on eligibility for CCB related to hours[18] or to other matters that are not relevant in this case.[19]
[18] FA Act, Part 3, Division 4, Subdivision G
[19] FA Act, Part 3, Division 4, Subdivision F
Legislative framework of the FA Act and FAA Act: overview of process of fee reductions
Section 48 of the FAA Act sets out an overview of the process to be followed should an individual person be eligible for CCB by way of a reduction in fees. Where a person is eligible for CCB in that way, the CCB is paid directly to the service, which passes it on to the eligible person in the form of a reduction of the fees otherwise payable for child care.
Under the process of fee reduction, a service is obliged to notify the Secretary of the Department of Education, Employment and Workplace Relations (DEEWR Secretary) if a person enrols a child for care by it.[20] Once the DEEWR Secretary confirms the enrolment, the service must give weekly reports about the care it provides to the child.[21]
[20] FAA Act, s 48(1)
[21] FAA Act, s 48(2)
Provided two conditions are met, the DEEWR Secretary will calculate the amount by which the fees are to be reduced. One condition is that the weekly report is made. The other is that there has been a determination under s 50F of the FAA Act that the individual is conditionally eligible for CCB by fee reduction for care provided by the service to the child in a week.[22] That determination presupposes that the person has made a claim under s 49(1) or, where it is deemed to have been made in limited circumstances. There are various restrictions on the claims that may be made and the requirements they must meet. Where a claim is made for CCB by way of fee reduction, s 50B requires the DEEWR Secretary to make a determination either to determine that the person is conditionally eligible under s 50F or that the person has no entitlement under s 50G.
[22] FAA Act, s 48(3)
Legislative framework of the FA Act and FAA Act: determination of CCB%
If making a determination of conditional eligibility under s 50F of the FAA Act, the DEEWR Secretary must determine the CCB% applicable to the person and the child by using the provisions of Schedule 2 to the FA Act.[23] Clause 1 of Part 1 of Schedule 2 sets out the method of calculating a person’s rate of CCB for a session of child care provided to a child. The method requires that cl 4 of Part 2 is first used to work out the standard hourly rate for the session. The person’s adjustment percentage is then calculated using cl 2 of Part 1. The final step is to apply that percentage to the standard hourly rate. The result is that person’s rate of CCB for the care.[24]
[23] FAA Act, s 50J
[24] FA Act, Schedule 2, Part 1, cl 1(1)
I will do more than sketch each step as the detail is not relevant in this case. The calculation of the standard hourly rate for a session is by reference to a table in cl 4(1). It specifies the kind of care provided by the carer and, next to each kind, the way in which the hourly rate is to be calculated. It does so either by specifying an amount or by providing a formula that factors in that amount.
The second step is determined by reference to the formula:
“CCB% x Schooling% x Part-Time%”[25]
These components of the formula are themselves worked out according to other formulae specified in the FAA Act. Those formulae take into account various factors that are calculated taking into account such matters as a person’s taxable income, hours of care of the child, whether the person has multiple children and whether the child is a school child.
[25] FA Act, Schedule 2, Part 1, cl 2(1)
Of particular relevance in this case is the CCB% which is defined as the:
“Multiple child% x Taxable income%”[26]
Taxable income% is worked out by reference to cll 6 to 12 of Part 4 of Schedule 2 to the FA Act. It depends on income thresholds, income excess, weekly taper amounts and taxable income. The multiple child% is worked out using cl 5 of Part 3. It depends on the number of children that the person has in a particular type of care. After working out the person’s maximum weekly benefit under cl 11, the result is the multiple child rate. Clause 11 is also used to work out the person’s maximum weekly benefit if that person had only one child and then multiplied by the number of children the person does have. That is the single child rate. The multiple child rate is then divided by the single child rate and the result is the multiple child%.
[26] FA Act, Schedule 2, Part 1, cl 2(2)
Section 55 of the FAA Act provides that, in certain circumstances, the CCB% may be calculated on the basis of an estimate, indexed estimate or of the indexed actual income needed to apply the formula for its calculation. Section 55A permits the calculation to be based on an estimate. Section 55B permits the minimum taxable income% to be used in the calculation as the taxable income% and s 55C provides for the situation in which the person has not given a tax file number. Section 60B permits recalculation where the CCB% is calculated using the minimum taxable income% as the taxable income% because a situation in ss 55, 55B or 55C has arisen, the DEEWR Secretary must vary those determinations.
The DEEWR Secretary may vary a variety of determinations including that relating to CCB in various situations. There can, for example, be a variation for failure to provide information in the data verification from relating to CCB%.[27] Another is provided for in s 65A. Section 65A(1) provides that:
“If:
(a)determinations of conditional eligibility under section 50F and of CCB% under section 50J are made in respect of a claimant who is an individual; and
(b)after the determinations are made, an event occurs; and
(c)the determination of conditional eligibility has, at some time after the occurrence, the effect that the claimant is conditionally eligible; and
(d)when the Secretary becomes aware of the occurrence, the Secretary considers that, if he or she were making the determination of CCB% immediately after the occurrence, the CCB% would be different to the CCB% previously determined;
the Secretary must, subject to subsection (4), vary the determination of CCB% with effect from the date of the occurrence.”
[27] FAA Act, s 59D
Section 65A(4) provides that the variation may take place from a later date in certain circumstances when the person did not notify the DEEWR Secretary of the event before the end of the income year following that in which the event occurred. An “event” includes the expiration of a period of time if the expiration is relevant to the operation of the FAA Act.[28] It does not usually include the occurrence of any event that causes a person to provide a revised estimate of his or her adjusted taxable income.[29] A revised estimate of adjusted taxable income will only be the occurrence of an event under s 65(1) if the event also affects the person’s CCB% for a reason other than the amount of that person’s adjusted taxable income or the event is the person’s either becoming, or ceasing to be, a member of a couple.[30]
[28] FAA Act, s 65A(2)
[29] FAA Act, s 65A(3)
[30] FAA Act, s 65A(3)
Section 65B permits a variation of a determination of CCB% to reflect revised adjusted taxable income estimates, s 65BA permits a variation to reflect indexation of an estimate of an adjusted taxable income and s 65BB permits a variation to reflect the indexation of adjusted taxable income. None is relevant in this case.
Legislative framework of the FA Act and FAA Act: the approved service must pass on the amount of fee reduction
The service must pass on to the person the amount of fee reduction calculated by the DEEWR Secretary.[31] Section 48(4) of the FAA Act explains the way in which the amount of fee reduction is calculated when it provides that:
“The amount by which the fees are reduced is referable to the amount of child care benefit that would be paid in respect of the sessions if entitlement to an amount of child care benefit was determined under section 51B in respect of the income year in which the week falls. The amount of fee reduction is calculated by the Secretary using the provisions of the Family Assistance Act.”
[31] FAA Act, s 48(4)
Section 43 of the FA Act sets out the circumstances in which a person is eligible in respect of “a session of care provided by an approved child care service to a child”. One that is relevant in this case is that “when the session of care is provided, a determination is in force under Part 3 …” of the FAA Act with the effect that the person is conditionally eligible for CCB by fee reduction in respect of the child.[32]
[32] FA Act, s 43(1)(a)
Legislative framework of the FA Act and FAA Act: determination of entitlement
Subdivision D of Division 4 of Part 3 of the FAA Act deals with determination of entitlement if a determination of conditional eligibility is in force under s 50F in respect of an individual and a child at any time during an income year.[33] The DEEWR Secretary must determine the claimant’s entitlement to be paid CCB by fee reduction in respect of the income year.[34] Section 51B provides for the Secretary to determine a person’s entitlement to be paid CCB by fee reduction for sessions of care. It begins with the statement that:
“If the Secretary is satisfied that the claimant is eligible under section 43 of the Family Assistance Act for child care benefit by fee reduction in respect of one or more sessions of care provided by an approved child care service to the child during the income year, the Secretary must determine that the claimant is entitled to be paid child care benefit by fee reduction for the sessions:
(a)at the rate for which; and
(b)in the amount for which;
the Secretary considers the claimant eligible.”
[33] FAA Act, s 51
[34] FAA Act, s 51A(1)
In making a decision under s 51B(1) of the FAA Act, the DEEWR Secretary must take into account the matters listed in s 51B(2). Those matters include determinations made under the Act and certain certificates given by the service with regard to a weekly limit of hours of care and setting a rate of CCB under s 76(1) of the FA Act. Section 76(1) relates to care provided by a service to a child at risk of serious abuse or neglect or to a person experiencing hardship of a kind specified in an instrument in force under s 82(3)(a) of that legislation.
Family Assistance Guide
The days of 25 and 26 December 2006 were public holidays and 27 December 2006 was a public service holiday. The Family Assistance Guide (Guide) contains a table setting out dates of effect for particular events. Dates of effect are those to be specified in the letter to the person, the dates of effect used by the service and the date used in any subsequent reconciliation. It is acknowledged in the Guide that:
“The dates of effect of these actions do NOT always coincide. A service applies the adjusted CCB percentage from Monday of the relevant billing week. This may NOT be the actual date of effect of the change in circumstances advised in the letter from the FAO. When acquittal occurs, in some instances, 2 different dates of effect can apply, depending on whether the change results in an increase or decrease in entitlement.”[35]
[35] Guide, cl 4.8.1.20
This principle is reflected in that part of the Guide dealing with advice received from a person that a child is leaving care. It provides:
| If an individual … | The date of effect in the letter is the date … | The date of effect the service uses is the Monday of the week … | The date of effect used in reconciliation is the Monday of the week … |
| … | … | … | … |
| Advises of a: … - child leaving care … | the new information is received. | after notice is received | - the change occurred, if the CCB percentage increases, OR - after the change occurred, if the CCB percentage decreases. |
| … | … | … | … |
The submissions: 2007/1679
Mr Kerferd said that the fee at the service at which his son is enrolled charges $292 per week for care. The amount of CCB by fee reduction was $147.92. That left him with a net amount of $144.08 to pay the service. When the family takes holidays, the service continues to charge for his son’s care but, provided he gives it two weeks’ notice, it charges him only 50% of the rate otherwise payable. That is a sum of $146 as the service will not charge 50% of the net amount remaining after CCB by fee reduction i.e. $72.04. Should Mr Kerferd’s income be higher than he has estimated, there will be a reduction in the CCB payable to him. Although he had asked that the CCB% be reduced from 25 December 2006, he was happy if it were reduced from 22 December 2006. The CCB% needed to be reduced to 0% for two weeks in December 2006 so that he was not out of pocket. Mr Kerferd believed that it was too late to do anything about the matter as the CCB had already been paid to the service.
On behalf of the DEEWR Secretary, Mr Perdon set out the history of the discussions and communications between Mr Kerferd and Centrelink regarding the CCB. He submitted that s 65A of the FAA Act provides the legislative authority to vary a decision regarding the rate of CCB and added: “That discretion is applied via the respondent’s policy and Centrelink systems”.[36] The Centrelink CCB system will not accept a date of effect of Christmas Day as the system is not available on that day and child care centres are not open on that day.[37] The Centrelink computer system applies the date of notification as the date of effect of a CCB variation. It is not possible to input future dates. Advices regarding variations are held until their date of effect has passed and then actioned. CCB is paid on a Monday to Sunday basis. Favourable decisions to increase a CCB% are effective for the week following the week in which the decision is advised to the services and an adverse decision takes effect in the week following the week in which the decision was made. Centrelink had applied s 65A and, if Mr Kerferd now wishes to resile from his instructions of 2 January 2007, it was “prepared to enter such new instructions as they relate to a reduced percentage of CCB onto his CCB record.”[38] He referred me to the case of Re Drake and Minister for Immigration and Ethnic Affairs (No 2)[39] (Drake (No 2)).
[36] Submissions lodged 21 August 2007 at [10a]
[37] T1679 documents at 309-310
[38] Submissions lodged 21 August 2007 at [10c]
[39] (1979) 2 ALD 634
Consideration: 2007/1679
To date, it seems to me that the officers of the Centrelink making the initial decisions and then the SSAT on review of their final decision, have focused on the policy relating to the implementation of decisions favourable and adverse to a person. What they have not focused upon is whether the delegate of the DEEWR Secretary initially had power to alter the CCB% and, if so, whether the legislation prescribed the date of effect. I have spent some time in setting out the legislative framework of the type of CCB that Mr Kerferd received in order to identify the power as well as its place in the scheme of the payment of CCB.
Starting with the power, I agree with the ARO and SSAT that it lies in s 65A of the FAA Act. In order to exercise it, each of the conditions specified in its four paragraphs must be specified. The first is clearly satisfied in that there has been a determination that Mr Kerferd is conditionally eligible under s 50F as well as a determination of CCB% in respect of him. The second is also satisfied in that there has been an “event” that has occurred after those determinations were made. The third is satisfied in that Mr Kerferd is conditionally eligible for CCB.
The fourth is also satisfied. The event on which Mr Kerferd relies is that he advised Centrelink that he wanted his CCB% changed while he took his family on holiday and his child would not be cared for at the service. The DEEWR Secretary, through Centrelink, must be taken to be aware of that event. The condition specified in
s 65A(1)(d) is satisfied to that extent. That condition also requires that the event must have some relevance to the determination of the CCB% for otherwise, how could it be said that:
“… the Secretary considers that, if he or she were making the determination of CCB% immediately after the occurrence, the CCB% would be different to the CCB% previously determined”.
The determination of the CCB% is the subject of cl 2 of Schedule 2 of the FA Act with reference to ss 55–55C and to variations specified in Subdivision P of Division 4 of Part 3 of the FAA Act. It relies on the multiple child% and the taxable income%. The latter relies on the person’s taxable income whether actual or estimated and on the former on the number of children in sessions of care in the week concerned. In this case, there were to be no children in care because they were going on holidays. That would mean that the number of children would be nil and the multiple child% must be 0%. When multiplied by the taxable income%, the CCB% must also be 0%.
I understand that administrative expediency or efficiency would mean that this determination should take effect from a predetermined time as provided for in the policy. It seems to me, though, that Parliament has specified that it take effect from the date of the occurrence of the event. That event is Mr Kerferd’s going on holidays and his child not being in care. That date, as initially advised, was 25 December 2006 although Mr Kerferd later accepted 22 December 2006 as an appropriate date. At no time did Mr Kerferd suggest that he was taking his child on holidays, with the necessary implication that his child would not receive care, from 18 December 2006. On the evidence, I am satisfied that his initial notification of 25 December 2006 was the day from which care would not be given to his child by the service.
My attention has not been drawn to, and I have been unable to find, a reference in the FAA Act or the FA Act that provides that the date of effect cannot be a public holiday such as Christmas Day. The same is true for the Guide. Later in these reasons, I have set out the principles established by Brennan J in Drake (No 2) and it is clear that he was concerned only with policy that guided the exercise of a discretion, that has been given by Parliament, to make a decision. His Honour’s words cannot be read as suggesting that policy can override or modify legislation enacted by Parliament.
My attention has not been drawn to any legislative provision that suggests that it overrides a provision of the FAA Act such as s 65A. I have looked at the Acts Interpretation Act 1901. Section 36(2) provides for the reckoning of time to exclude, among others, a public holiday where that is the last day on which something must be done. It does not provide that something may not take effect from a public holiday. In the absence of any legislative support for what is described as Centrelink’s policy, I cannot allow that policy to override a provision enacted by Parliament. That is not to say that Mr Kerferd’s entitlement had to be reassessed on that day or that the service had to be notified on that day; only that, when it is reassessed, the reassessment take account of the determination from the date specified by Parliament. In this case, that happens to be Christmas Day and a day on which child care centres are not open.
For the reasons I have given, I:
(1)set aside the decision of the Social Security Appeals Tribunal dated 28 March 2007; and
(2)substitute a decision that the applicant’s CCB% was 0% from 25 December 2006 until 2 January 2007.
APPLICATION NO. 2007/1681: Family Tax Benefit
The background: 2007/1681
There is no disagreement between the parties that Mr Kerferd is entitled to be paid FTB but they cannot agree as to how it should be paid to him. He wants it to be paid by way of a cheque and the Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA Secretary) wants to pay him by way of direct credit. Mr Kerferd had initially provided Centrelink with details of his bank accounts but did not provide those details to Centrelink after his FTB was cancelled in July 2006. A Centrelink officer advised him that he would need to reapply for the FTB but that his payments could be restored if he were to give Centrelink details of his bank account.[40] Centrelink attempted to pay FTB to Mr Kerferd by means of the accounts but two were closed on 24 December 2005 and 17 March 2006 respectively and the remaining two on 1 November 2006. Payments of FTB relating to periods from 8 November 2005 to, for the purposes of this case, 1 January 2007 have been returned to it by the bank.
[40] T1681 documents at 412
On 31 January 2007, an ARO affirmed an earlier decision to pay the FTB by means of direct credit to a bank account nominated by Mr Kerferd. Mr Kerferd had already lodged an application to the SSAT by telephone on 3 January 2007[41] and the ARO sent a copy of his decision to the SSAT. The SSAT decided that it did not have jurisdiction to as it could not review a decision made under s 7(2) of the FAA Act.[42]
[41] T1681 documents at 413
[42] T1681 documents at 409
Legislative framework of the FAA Act: Payment of FTB to which a person entitled
Division 1 of Part 3 of the FA Act is concerned with eligibility for Family Tax Benefit (FTB) and Division 1 of Part 3 of the FAA with its payment. I am concerned only with its payment in this case to an individual person i.e. Mr Kerferd.
Section 7(1) of the FAA Act provides that an individual may make a claim in one of the following three ways:
“(a) for payment of family tax benefit by instalment; or
(b)for payment of a family tax benefit for a past period; or
(c)in the case only of a claimant who is an individual – for payment of family tax benefit by single payment/in substitution because of the death of another individual.”
Section 7(2) goes on to provide for the form of the claim. As Mr Kerferd claimed FTB by way of instalment, I will set out only those provisions that relate to a claim for FTB by way of instalment but note that particular conditions must be met in relation to each of the three ways that FTB may be paid. Section 7(2) provides:
“To be effective:
(a)a claim must:
(i)be made in a form and manner; and
(ii)contain any information; and
(iii)be accompanied by any documents:
required by the Secretary; and
(aa)in the case of a claim for family tax benefit by instalment – the bank account requirement set out in section 7A must be satisfied in relation to the claim; …
(b)…
(c)…”
Section 7A sets out the bank account requirements that must be satisfied in relation to a claim for the purposes of s 7(2)(aa).[43] Section 7A(2) provides that:
“The requirement is that the claimant provide:
(a)details of a bank account maintained by the person alone or jointly or in common with someone else into which instalments of family tax benefit are to be paid; or
(b)a statement that the claimant will nominate, and provide details of, such a bank account within 28 days after the claim is made.”
[43] FAA Act, s 7A(1)
The claimant must give details of the bank account or make the
statement in the claim[44] but the requirement may be modified for:
“The Secretary may determine that the requirement in subsection (2) does not apply to a claimant if the Secretary considers that it is appropriate to exempt the claimant from the requirement.”[45]
[44] FAA Act, s 7A(3)
[45] FAA Act, s 7A(4)
The claimant may withdraw or vary a claim before the claim is determined but may only do so in a manner determined by the FaHCSIA Secretary.[46] If a claim is withdrawn, it is taken never to have been made. That is the effect of s 12(3).
[46] FAA Act, ss 12(1) and (2)
If an effective claim is made, the FaHCSIA Secretary must determine the claim in accordance with Subdivision B of Division 1 of Part 3 of the FAA Act. If it is not effective, it is taken never to have been made.[47] Subdivision B goes on to make provision for specific circumstances. Among them are the circumstances in which a person makes a statement that he or she will nominate details of a bank account within 28 days as referred to in s 7A(2)(b) and as referred to in s 7A(2)(A). If that is the case:
“… the Secretary can only determine the claim concerned if, within 28 days after the claim is made, the person nominates, and provides details of, a bank account of a kind referred to in paragraph 7A(2)(a) into which instalments of family tax benefit are to be paid.”[48]
If, after 28 days have passed, the FaHCSIA Secretary cannot, because of s 15A(1), determine the claim, the claim is taken never to have been made.[49]
[47] FAA Act, s 13(1)
[48] FAA Act, s 15A(1)
[49] FAA Act, s 15(2)
If the FaHCSIA Secretary is satisfied that the claimant is eligible for FTB by instalment in accordance with Subdivision A or C of Division 1 of Part 2 of the FAA Act, the FaHCSIA Secretary must determine that the claimant is entitled to be paid that FTB for each day on which the determination is in force at the daily rate for which the claimant is eligible.[50]
[50] FAA Act, s 16(2)
The FaHCSIA Secretary must give a notice of determination to a claimant stating whether that claimant is entitled to be paid FTB by entitlement under the determination and, if so, the daily rate of the benefit, the days on which the entitlement arises and how it is to be paid.[51] Section 23(1) provides that, subject to exceptions elsewhere in s 23 that are not relevant:
“… if the claimant is entitled to be paid family tax benefit by instalment, the Secretary must, after each instalment period ending after the determination is made, pay the instalment amount to the claimant, at such time as the Secretary considers appropriate and to the credit of a bank account nominated and maintained by each claimant.”
[51] FAA Act, s 22(1)(a) and (b)(i)
Section 26A provides that the FaHCSIA Secretary may require the claimant to give details of a bank account within 28 days if two conditions are satisfied. The first is that there is a determination in force that the person is entitled to be paid FTB by instalment. The second is that the claimant has not nominated a bank account into which instalments of FTB are to be paid.
Section 27A applies if the claimant has been required to nominate a bank account under s 26A and does not do so within 28 days of that requirement’s being made.[52] Section 27A(3) provides that there is a consequence for failing to comply with the requirement. It is that:
“… the Secretary may vary the determination so that it has effect that the claimant is not entitled to be paid family tax benefit for any day, on which the determination was or will be in force, after the end of the instalment period before the variation takes place.”
[52] FAA Act, s 27A(1)
The FaHCSIA Secretary has it within his power to prevent the application of that consequence. Section 27A(2) provides that:
“The Secretary may determine that the consequence in subsection (3) does not apply if the Secretary considers that it is appropriate to exempt the claimant from the consequence.”
The claimant also has it within his or her power to undo the consequences of failing to give details of a bank account. That comes in s 27A(4),
which provides:
“If:
(1)under subsection (3), the Secretary varies the determination; and
(2)the Secretary finds out the bank account details of the claimant concerned before the end of the income year following the one in which the variation took effect;
the Secretary must vary the determination to undo the effect mentioned in subsection (3).”
Legislative framework of the FA Act and FAA Act: reviewability of decision
Part 5 of the FAA Act provides for the review of decisions made under the family assistance law, which includes those made under the FA Act and the FAA Act.[53] Subdivision A of Division 1 of that Part provides for review initiated by the FaHCSIA Secretary. Subdivision B provides for review initiated by a person affected by certain decisions. Such a person may apply to the FaHCSIA Secretary for review of that decision. That is the effect of s 109A(1) and the decisions of which the person may seek review are limited to those for which review is provided under s 108. Section 108(1) provides that any decision of any officer under the family assistance law, including the FAA Act, must be reviewed on an application under s 109A(1) unless that decision is excluded by s 108(2). A decision made under s 7(2) is not excluded. Time limits are imposed under s 109D but they are not relevant. The decision on review is made by an ARO authorised under s 109C.
[53] FAA Act, s 3(1)
Most decisions that the ARO affirms, varies or sets aside and substitutes with another may be reviewed by the SSAT if the person affected by them applies to it.[54] Exceptions are listed in s 111(2) of the FAA Act and that list includes decisions made under s 7(2). It does not include decisions made under s 27A(2).
[54] FAA Act, s 111(1)
Section 142 sets out the right of a person to apply to the Tribunal for review. In so far as it is relevant, it provides:
“(1) If:
(a)a decision has been reviewed by the SSAT; and
(b)the decision has been affirmed, varied or set aside by the SSAT;
the Secretary or a person affected by the decision made by the SSAT may apply to the AAT for review of that decision.
(2) For the purposes of subsection (1), the decision made by the SSAT is taken to be:
(a)where the SSAT affirms a decision – that decision is affirmed; and
(b)where the SSAT varies a decision – that decision as varied; and
(c)where the SSAT sets a decision aside and substitutes a new decision – the new decision; and
(d)where the SSAT sets a decision aside and sends the matter back to the Secretary for reconsideration in accordance with any directions or recommendations of the SSAT – the directions or recommendations of the SSAT.”
The submissions: 2007/1681
Mr Kerferd said that he did not want to receive the arrears of FTB until Centrelink officers correctly calculated the arrears to which he was entitled.
On behalf of the FaHCSIA Secretary, Mr Perdon submitted that the Tribunal does not have jurisdiction to review the decision as it has not greater power than that given to the SSAT. As a person cannot apply to the SSAT for review of a decision made under s 7(2), Mr Kerferd cannot apply to the Tribunal for review of such a decision. Mr Perdon relied on a decision of Re Watson and Secretary, Department of Family and Community Services.[55]
[55] (2003) 74 ALD 523; [2003] AATA 599
If I were to decide that the Tribunal does have jurisdiction to review the decision, Mr Perdon continued, I should have regard to ss 7(2), 26A and 27. All of those sections suggest that payment of FTB by direct credit was clearly intended. The advantage of payment in that form to a recipient is that the funds are immediately available. That can be contrasted with payment by a cheque as there is delay in clearing the cheque and a cheque can be subject to greater administrative costs than direct credit. Payment by direct credit avoids the delay or non-delivery that can occur when a cheque is trusted to the mail system. It is consistent with the policy set out in the Guide at [4.3.3]. That policy should be applied in accordance with the principles in Drake (No 2).
Consideration: 2007/1681
When does the Tribunal have jurisdiction and, if so, what is its extent?
The first question that I must consider is whether the Tribunal has jurisdiction to review the decision. That question takes me back to the foundation of the Tribunal’s jurisdiction. Unlike a court of general jurisdiction which may consider all matters that come before it for trial, the Tribunal’s jurisdiction is limited. The first limitation imposed on its jurisdiction is that it may review only decisions made in the exercise of powers conferred by an enactment. That is the effect of s 25(1) of the Administrative Appeals Tribunal Act 1975 (AAT Act). An “enactment” includes an Act or an instrument, such as regulations or by-laws, made under an Act.[56] A “decision” is broadly defined in s 3(3).[57] The second limitation is that the “… Tribunal has power to review any decision in respect of which application is made to it under any enactment.”[58] Implicit in the provision is that the Tribunal does not have jurisdiction if a decision does not conform to these two limitations. Therefore, in order to have jurisdiction, the Tribunal must find an enactment that provides that an application may be made to it.
[56] AAT Act, s 3(1)
[57] Section 3(3) of the AAT Act provides that the word “decision” includes a reference to:[58] AAT Act, s 25(4)
The AAT Act itself is not an “enactment” within the meaning of
s 25(1) but the FAA Act is. In this case, the SSAT has not affirmed, varied or set aside the decision of the ARO made under the FAA Act. Instead, it has found that it has no jurisdiction and has done so on the basis that the decision was made under
s 7(2) with reference to s 7A. As such, an application could not be made to it by virtue of s 111(2) of the FAA Act.
As will become apparent, I do not think that the SSAT, and the ARO before it, considered the matter on the correct basis. The decision that each reviewed was a decision to refuse to pay FTB by instalments to Mr Kerferd by way of a cheque and to pay him instead by way of direct credit to a bank account that he nominated. Each looked to the source of power of that decision as being s 7(2) of the FAA Act. So too did Mr Perdon in arguing the case at the hearing but, for reasons I give below, I think that it actually lies in s 26A.[59] My view will be irrelevant, though, if I do not have jurisdiction to consider the SSAT’s decision that it does not have jurisdiction.
[59] See [70]-[71] below
My doubts whether I do come from the wording of s 142(1) that requires not only that a decision has been reviewed by the SSAT but that the SSAT has affirmed or varied it or, failing either of those, set it aside and substituted another. It could be argued that the SSAT has reviewed the decision if only to find that it did not have jurisdiction to review it but it is difficult, if not impossible, to argue that it has varied it or set it aside and substituted another decision. Affirmation of the decision is another matter. I have given some thought to whether it is possible to argue that the SSAT’s decision that it had no jurisdiction may be read as an affirmation of the ARO’s decision. Looking at the matter from a pragmatic point of view, the effect of its decision that it had no jurisdiction meant that the ARO’s decision remained in operation. That is what would have happened had it expressly made a decision affirming it. Arguably, the SSAT should have made a decision affirming it for, in most circumstances arising in a review under the FAA Act, its powers are set out in s 113(1). It does not contemplate a decision that the SSAT does not have jurisdiction when it provides:
“If a person applies to the SSAT for review of a decision, the SSAT must:
(a)affirm the decision; or
(b)vary the decision; or
(c)set aside the decision and:
(i)substitute a new decision; or
(ii)send the matter back to the Secretary, for reconsideration in accordance with any directions or recommendations of the SSAT.”
If it is correct to look to the substantive effect of the decision, it is a view is consistent with the principles expressed by Smithers J in Collector of Customs (NSW) vBrian Lawlor Automotive Pty Ltd [60] in a slightly different context. That was a case regarding the Tribunal’s jurisdiction to review decisions made without a legitimate source of power. His Honour illustrated the practical consequences of such a decision to revoke a licence made without a legitimate source of power:
“ … It is to be noted also that the subjects of reviews are decisions. If an administrator makes a particular decision in the course of government administration, then whether or not he is authorized to do so, there is in fact a decision made. The fact that that decision cannot affect legal rights or liabilities is irrelevant to that fact.
… But to decide to revoke the licence was also itself a decision according to the natural meaning of that term. Such a decision may have serious results for the citizen. No doubt the officers of the department will act upon it. Thus, after the decision in question had been made they would be expected to refuse to permit goods to be entered to the defendant's warehouse. In this case, also action was taken against the licensee under s 94 of the Customs Act. That action did not necessarily depend upon revocation but in all probability it would not have been taken had the decision to revoke the licence not been made. ...”[61]
[60] (1979) 2 ALD 1; 24 ALR 307
[61] (1979) 2 ALD 1; 24 ALR 307 at 23-24; 335-336
The precise situation I face was considered by Wilcox J in Ward v Nicholls[62] although in the context of an application to the Tribunal that it review a decision by the Veterans’ Review Board (VRB) that it had no jurisdiction. The Tribunal had decided that the VRB had not made a decision with the consequence that it had nothing to review and so no jurisdiction. The provisions of the Veterans’ Entitlements Act 1986 relating to review of decisions by the VRB and by this Tribunal are drafted in terms similar to those in the FAA Act. Wilcox J said:
“ It would be a very odd situation … if the appointed first instance reviewer, the Veterans’ Review Board, erroneously found that it had no jurisdiction, and the Administrative Appeals Tribunal — which is set up by statute to review on their merits decisions of that Board — was then precluded from considering for itself whether that Board in fact had jurisdiction and, if so, what decision it should have made. There would be a lacuna in the system of administrative review disappointing to those who had laboured to set up the comprehensive system which appears to be provided by the statute. I cannot think that this is right. I think that the true position is that the Veterans’ Review Board is always in the position of having to decide whether to affirm, to vary or to set aside the decision of the Commission, and that, whatever decision it makes, that decision is subject to review by the Administrative Appeals Tribunal.”[63]
[62] (1988) 16 ALD 353; 84 ALR 471
[63] (1988) 16 ALD 353; 84 ALR 471 at 361; 481
The Full Court of the Federal Court considered Ward v Nicholls in the context of an appeal against a finding of the Tribunal that the VRB did not have jurisdiction to hear a veteran’s application for review. The basis of the Tribunal’s finding was that the veteran had failed to comply with a statutory condition precedent which prevented the matter from being heard on its merits by the VRB and so by it. Keely, O’Connor and Beazley JJ said in Crompton v Repatriation Commission[64] that:
“… although the tribunal has jurisdiction to accept an application for review of the board’s decision, the tribunal must, during the course of the review, have the power to re-determine the question of its own jurisdiction. If it is shown that the board lacked the jurisdiction in the first instance then it follows that the tribunal must also lack jurisdiction to review the merits. In our view there is nothing … that precludes the finding that the tribunal can, and indeed must, re-decide the question of its jurisdiction in each case before proceeding to merits review.
In administrative proceedings, having the power to determine and re-determine questions of jurisdiction is essential to the process of determining questions of law and fact. The board is a body of limited jurisdiction which is capable of binding subsequent administrative bodies on a question of jurisdiction. The applicant’s proposition that a board or tribunal’s finding on the question of its own jurisdiction must stand unassailed until overturned by a court of competent jurisdiction cannot be accepted.
In the present case, there is a right of appeal from the board on questions of both law and fact, and it would indeed be ‘a lacuna’ in administrative proceedings if questions of jurisdiction had always to be determined by court intervention. Where a board or tribunal determines a question of law during its own proceedings, question must be open to redetermination by a superior tribunal.”[65]
[64] (1993) 30 ALD 45
[65] (1993) 30 ALD 45 at 49-50
A different issue arose for consideration in Walker v Secretary, Department of Social Security,[66] to which reference was made in Re Watson and Secretary, Department of Family and Community Services.[67] Both were concerned with decisions relating to the method of payment of social security benefit in circumstances in which the SSAT was not permitted to exercise the FaHCSIA Secretary’s powers and discretions on their review. In Walker v Secretary, Department of Social Security, the Full Court of the Federal Court considered a decision under s 1223 of the Social Security Act 1991 (SS Act) to issue a garnishee notice. Section 1253(4) denied the SSAT, on review of a decision under s 1223, authority to exercise the powers and discretions of the Secretary. The SSAT had decided that it had power to review the decision but no power to exercise the FaHCSIA Secretary’s powers and discretions. Therefore, it affirmed the decision and remitted it to the FaHCSIA Secretary without considering the applicant’s financial position. The Tribunal had seen the matter in the same way. On appeal, Burchett J looked to s 1283(1) of the SS Act. It provided that:
“If a decision has been reviewed by the Social Security Appeals Tribunal (SSAT) and has been affirmed, varied or set aside, application may be made to the Administrative Appeals Tribunal for review of the decision of the SSAT.”
[66] (1997) 75 FCR 493; 147 ALR 263
[67] (2003) 74 ALD 523; [2003] AATA 599
Burchett J said:
“ Not surprisingly, [s 1283(1)] gives no right to apply to the Administrative Appeals Tribunal for a review of a decision simply declining jurisdiction. I say ‘not surprisingly’, because such a decision involves a question which is quite plainly appropriate to be decided upon judicial review, by proceedings in the nature of mandamus. Therefore, if the Administrative Appeals Tribunal rightly interpreted the decision of the Social Security Appeals Tribunal as a refusal of jurisdiction, then the Administrative Appeals Tribunal had itself no jurisdiction to deal with the matter …
… An affirmation springing from a denial of any capacity to consider the matter is no affirmation at all … Furthermore, it could not be said, in the words of s 1283(1), that the decision in question had ‘been reviewed by the Social Security Appeals Tribunal’. Accordingly, the Administrative Appeals Tribunal was right in finding that there had been a refusal of jurisdiction; but, for that very reason, it was wrong to find any jurisdiction in itself …”[68]
[68] (1997) 75 FCR 493; 147 ALR 263 at 497; 267
In a joint judgment, Drummond and Mansfield JJ did not address this issue as the case turned on another. It would appear from the report of the judgments that the attention of the Full Court of the Federal Court was not drawn to the earlier authorities of Ward v Nicholls and Crompton v Repatriation Commission. That is perhaps understandable because the case concerned the extent of the powers of the SSAT in a situation in which they had been curtailed by the legislation. The SSAT had not declined to exercise any power at all when it affirmed the decision and certainly did not make a decision that it had no jurisdiction to review the ARO’s decision. The Full Court resolved the issue by tracing the powers of the SSAT, and so of the Tribunal, from their source and identifying a power that the SSAT, and so the Tribunal, could have used in reviewing the decision. It follows that the case of Walker v Secretary, Department of Social Security is not so much an authority contrary to Ward v Nicholls and Crompton v Repatriation Commission as a case that contains a statement by one member of the Full Court that is contrary to what was said in those other cases. It was, though, a statement on a matter that was not necessary to decide the issue that required decision in Walker v Secretary, Department of Social Security. That is to say, Burchett J’s statement was obiter dicta and I should follow the principles in those cases in which the issue that I must decide was squarely before the court and decided by it even though in different circumstances.
The principles in Ward v Nicholls and Crompton v Repatriation Commission are equally applicable to this case. There was a decision of which Mr Kerferd sought review by the SSAT. He sought review of the SSAT’s decision by this Tribunal and it is open to this Tribunal to consider whether it has jurisdiction. That necessarily entails its looking at the decision of which review was sought by the ARO and then by the SSAT. If the Tribunal decides that the SSAT would have had jurisdiction to review that decision if it had chosen to do so, then it has jurisdiction even though the SSAT neither reviewed the decision nor exercised its powers to affirm or vary the decision or set it aside and substitute another. If it decides that the SSAT would not have had jurisdiction, it must decide that it also does not have jurisdiction for the scheme of the review provisions giving the Tribunal jurisdiction to review a particular decision depends upon Parliament’s having given the SSAT jurisdiction to review that decision. The scheme of review does not give the Tribunal a general power to review all decisions made by the FaHCSIA Secretary but only those that Parliament has said may be reviewed. In looking for the particular power to review a decision, the fact that the SSAT has said that it does not have jurisdiction is irrelevant.
Does the Tribunal have jurisdiction to review the decision in this case?
At the time that the FaHCSIA Secretary attempted to make the payments, a decision must have been made that there was an effective claim for otherwise there could never have been any attempt to forward payments to the bank accounts. There could only have been that attempt to make the payment if there were a determination that the FaHCSIA Secretary was satisfied that Mr Kerferd was entitled to be paid FTB by instalment as required by s 23(1) of the FAA Act. The only way in which a person can become entitled to be paid FTB is to make a claim in accordance with Subdivision A of Division 1 of Part 3 of the FAA Act. Section 7(2) comes within Subdivision A. In order to be effective, the claim for FTB must meet the requirements of that section. When ss 7(2)(aa) and 7A(2) are read together, one of those requirements is that details of a bank account into which the instalments of FTB are to be paid are provided or the claimant states that he or she will provide them within 28 days. Once the FaHCSIA Secretary made the determination that Mr Kerferd was entitled to FTB and the attempt to pay it was made, I must presume that he was satisfied that Mr Kerferd had provided the details. There is no suggestion in this case that the FaHCSIA Secretary has made any decision under s 7A(4) to exempt Mr Kerferd from the requirement to give details of a bank account.[69]
[69] I have considered whether Mr Kerferd might have made a statement in his claim that he would provide details of a bank account in accordance with s 7A(2)(b) rather than giving the details of an account. Had that been the case and had he not provided those details within 28 days, his claim would be taken never to have been made at all. The Secretary cannot make a determination unless those details are received within the 28 day time limit. That is the effect of s 15A. Therefore, Mr Kerferd must have set out the details of his account in his claim.
The FaHCSIA Secretary’s power to require details of a bank account arises if the claimant has not nominated a bank account into which instalments of FTB are to be paid. That is the power given by s 26A but the reference to a determination must, in this case, be a reference to a determination under s 16 as to entitlement to be paid FTB for each day on which the determination is in force. If the conversation between Mr Kerferd and the Centrelink officer on 25 October 2006 can be taken as a requirement under s 26A, then regard must then be had to s 27A when Mr Kerferd did not provide the required details. That would raise the issue of whether Mr Kerferd should be exempted from the consequences that are provided for in s 27A(3) by an exercise of the discretion under s 27A(2). An exemption could take the form of a decision that he be paid by cheque. Equally, a decision that he not be paid by cheque could be characterised as necessarily incorporating a decision that the FaHCSIA Secretary’s discretion under s 27A(2) not be exercised.
The effect of s 108(2) of the FAA Act is that a decision under s 27A(2) is not excluded from being reviewed by the ARO. Once the ARO had affirmed the decision, it became a decision that came within the description of decisions in relation to which a person affected by it could apply to the SSAT for its review. Those decisions are described in s 111(1). Unlike a decision under s 7(2), it was not a decision that was specified in s 111(2) as a decision in respect of which a person could not make an application under s 111(1) to the SSAT. Therefore, the SSAT had jurisdiction to review it had it found the course of events to be as I have found them to be. There is nothing in the FAA Act that suggests that a person affected by a decision made under s 27A(2) may not seek its review under s 142. Had it been a decision that the SSAT had reviewed, the SSAT’s decision would have come squarely within the description of decisions set out in s 142(1). As it is, there remains a decision that exists in fact and the SSAT has considered it if only to find that it could not review it. In view of the authorities to which I have referred, I consider that I have jurisdiction to review it.
Review of the decision
Section 27A(2) does not set any parameters within which the discretion must be exercised or specify any matters that must be taken into account. As Mr Perdon submitted, ss 7(2), 26A and 27A suggest that payment by direct credit is preferred but they do not suggest any principles. The Guide does have a passage dealing with direct credit, which specifies:
“A claimant who is granted an exemption from the direct credit requirement is paid by cheque. Depending on the circumstances, an exemption may be temporary or permanent.
Examples:
Temporary exemption from payment by direct credit may be granted when the claimant:·is temporarily disabled or staying in a remote or isolated area … and is unable to get access to their account, or
·requires a payment immediately and this cannot be done in time through the direct credit system.
Permanent exemption from payment by direct credit may be granted when the claimant:
·lives in a remote or isolated area,
·is aged, frail or disabled and unable to get access to their account,
·is deprived of payment due to a legal or administrative problem, or
·does not operate an account for religious or cultural beliefs.
If the claimant's circumstances change, the reasons for direct credit exemption may need to be reconsidered. If a temporary exemption has been granted a review should be noted to follow up when the exemption may no longer be appropriate.
Example: Carol is granted a temporary exemption as she is travelling interstate when she lodges her claim. Carol's intention is to open an account at her local branch when she arrives home two weeks later. A review is noted to follow up the account details before the next payment is made.”[70]
[70] Guide, cl 4.3.3
It is clear from the principles expressed by the Tribunal’s then President, Brennan J, in Re Drake and Minister for Immigration and Ethnic Affairs (No. 2),[71] that the decision-maker:
“… is equally free, in point of law, to adopt such a policy in order to guide him in the exercise of the statutory discretion, provided the policy is consistent with the statute.”
This is consistent with the earlier judgments of the Full Court of the Federal Court in Drake v Minister for Immigration and Ethnic Affairs[72] and Smithers J.[73] Brennan J explained the reason for adopting a policy in relation to decision-making:
“… It can serve to focus attention on the purpose which the exercise of the discretion is calculated to achieve, and thereby to assist the Minister and others to see more clearly, in each case, the desirability of exercising the power in one way or another. Decision-making is facilitated by the guidance given by an adopted policy, and the integrity of decision-making in particular cases is the better assured if decisions can be tested against such a policy. By diminishing the importance of individual predilection, an adopted policy can diminish the inconsistencies which might otherwise appear in a series of decisions, and enhance the sense of satisfaction with the fairness and continuity of the administrative process.”[74]
[71] (1979) 2 ALD 634 at 640
[72] (1979) 24 ALR 577; 2 ALD 60 at 590; 70 per Bowen CJ and Deane J
[73] (1979) 24 ALR 577; 2 ALD 60 at 602; 80
[74] (1979) 2 ALD 634 at 640
When viewed against these principles, it is seen that the Guide is important in ensuring consistency and integrity in decision-making but that it cannot override or circumscribe the discretion given by Parliament in the legislation. That means that regard must first be had to the words that Parliament has used in order to identify the discretion that it has given and the matters, if any, that Parliament has expressly or implicitly set out to guide its exercise.
When I approach that, I do not think that the FAA Act in general, and
s 27A(2) in particular, can be read in isolation from other legislation. If it were, some might question why the FaHCSIA Secretary could not accommodate a person’s wishes as to the manner of payment. Generation of cheques may well be more costly in administrative terms but there is no evidence to that effect to support my finding that it is so. What I do have is a wider legislative intention in the FAA Act and a wider context in which the Act exists. The wider legislative intention of the FAA Act is that the payments reach their intended recipient and not become lost. That is imperative from the point of view of recipients but also from the point of view of the FaHCSIA Secretary. That payments reach their intended recipients is an important consideration in a world in which the income of recipients, and so their entitlements to benefits under the FAA Act, is checked by means of the Data-Matching Program (Assistance and Tax) Act 1990 and otherwise.
In giving examples, the Guide suggests that regard must be had to the ability of the recipient to gain access to his or her funds in an appropriate and timely manner. Appropriateness is determined by reference to whether the recipient is reasonably able to gain access to his or her bank account or to have and operate a bank account. Timeliness is determined by reference to whether the claimant requires a payment immediately and cannot gain it with sufficient immediacy if paid by direct credit in a bank account. Despite the submission that direct credit of payments gives a recipient greater and more immediate access to funds, it is not difficult to imagine circumstances in which payment by cheque may give the greater and more immediate access even if the administrative costs may be higher. One such circumstance may arise if the person had yet to open a bank account and was unable to do so immediately or at all. Having regard to the FAA Act, it seems to me that [4.3.3] of the Guide is consistent with it.
Mr Kerferd’s wish that he paid by cheque has no basis in ensuring that the payments of FTB reach him or that he have access to them more immediately than would otherwise be the case. His wish not to receive a payment of FTB unless it is accurately assessed is understandable but not a reason that can justify his being paid by a means other than direct credit. He can check the payment and question its accuracy equally as easily when paid by direct credit as by cheque. Therefore, I have decided that Mr Kerferd’s payment should be made by direct credit to a bank account and that it is not appropriate to exempt Mr Kerferd from the consequences of s 27A(3) of the FAA Act. This means that the consequence specified in s 27A(3) will apply for that period. I note from V2006/1682 that it would appear that Mr Kerferd gave Centrelink details of a bank account on 2 January 2007.[75] That would seem to be contrary to what he said at the hearing but, if it is so, it would mean that s 27A(4) would operate to alleviate the consequences imposed by s 27A(3).
[75] T1682 documents at 437
As the SSAT decided that it did not have jurisdiction, I:
(1)set aside the decision of the Social Security Appeals Tribunal dated 28 March 2007 that it did not have jurisdiction to review the decision; and
(2)substitute a decision:
(a)declining to make a determination under s 27A(2) of the A New Tax System (Family Assistance) Administration Act 1999 that the consequence in s 27A(3) does not apply.
APPLICATION NO. 2007/1682: Maternity immunisation allowance
The background: 2007/1682
Under the FA Act, Mr Kerferd was entitled to receive a maternity immunisation allowance of $227.90. On 10 January 2007, Centrelink attempted to pay MIA to Mr Kerferd by means of direct credit to a bank account that he had nominated. The bank returned the payment to Centrelink two days later as the account had been closed. On 15 January 2007, Centrelink wrote to Mr Kerferd advising him that his MIA had been returned by the bank and asking him to provide details of an account into which it could be paid.[76] An ARO reviewed the decision on 30 January 2007 and affirmed the decision not to pay the MIA by cheque. The SSAT also affirmed it on 28 March 2007.
[76] T1682 documents at 440
Legislative framework of the FAA Act: MIA
There is no question that Mr Kerferd is entitled to MIA and that the only issue relates to the manner of its payment. Section 47(1) of the FAA Act provides, in so far as it relates to MIA, that:
“If the claimant is entitled to be paid … maternity immunisation allowance, the Secretary must pay it to the claimant, at such time as the Secretary considers appropriate and to the credit of the bank account nominated and maintained by the claimant.”
Section 47(5) of the FAA Act provides that:
“The Secretary may direct that the whole or part of an amount which is to be paid for the purposes of this section is to be paid in a different way from that provided for by subsection (1) …. If the Secretary gives the direction, the amount is to be paid in accordance with the direction (despite those subsections).”
The submissions: 2007/1682
As I understand his submission, Mr Kerferd wishes to be paid by cheque until Centrelink accepts that he acts on behalf of his wife by virtue of a lawfully and properly executed power of attorney and until he is satisfied that he is being paid the correct amounts. If he were to accept payment of MIA by direct credit, he may be told that he has accepted the payment so it must be right.
Mr Perdon referred to [4.3.3] of the Guide and to the cases of Drake (No 2) and Re Watson and Secretary, Department of Family and Community Services, to which I have referred above. He submitted that the decision not to pay by cheque should be affirmed.
Consideration: 2007/1682
I have already considered the Guide and its place in the exercise of the discretion under s 27A(2) of the FAA Act. Its place is no different in the exercise of the discretion under s 47(5) and nor are the principles that can be drawn from the FAA Act and related legislation regarding its exercise. Although s 47 does not impose a consequence of the sort provided for in s 27A(3), I see no differences of substance between the two discretions. I also see no differences between the circumstances in which Mr Kerferd finds himself in relation to the two payments. Therefore, for the reasons that I gave in relation to the FTB, I decline to exercise the discretion to make a direction under s 47(5). That means that the FaHCSIA Secretary remains obliged to pay MIA to Mr Kerferd by way of credit to a bank account that he has nominated and maintained.
For these reasons, I affirm the decision of the Social Security Appeals Tribunal dated 28 March 2007.
I certify that the eighty five preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie,
Signed: .......................................................................
Jayne Haydon Associate
Date of Hearing 28 September 2007
Date of Decision 29 May 2008
Representative for the Applicant unrepresented
Representative for the Respondents Mr D. Perdon
Legal Services Branch
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