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

[2015] AATA 824

Kristoffersen and Secretary, Department of Social Services (Social services second review) [2015] AATA 824 (27 October 2015)

Division	GENERAL DIVISION
File Number	2015/1979
Re	Kurt Kristoffersen
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Dr P McDermott RFD, Senior Member
Date	27 October 2015
Place	Brisbane

The Tribunal affirms the decision under review.

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Dr P McDermott RFD, Senior Member

CATCHWORDS

SOCIAL SECURITY – pensions and benefits – family tax benefit – FTB Part B – whether tax free benefit a component of adjusted taxable income – decision under review affirmed.

LEGISLATION

A New Tax System (Family Assistance) Act 1999 (Cth) s 58; sch1 cls 29, 29(2), 29A(3); sch 3 cls 2(1), 3(2), 7(c)

A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (Superseded) s 142

SECONDARY MATERIALS

A Guide to Australian Government Payments (1 July – 19 September 2014)

REASONS FOR DECISION

Dr P McDermott RFD, Senior Member

27 October 2015

1. Mr Kristoffersen (“Mr K”) is entitled to payment of Family Tax Benefit (“FTB”). On 9 July 2014 the Department made a decision that he should be paid FTB, Part B at the rate of $30.52 per fortnight. Mr K sought a review of this decision. On 7 January 2015 an Authorised Review Officer (“ARO”) affirmed the decision. On 2 February 2015 Mr K applied to the Social Security Appeals Tribunal (“SSAT”) for a review of the decision. On 9 April 2015 the SSAT affirmed the decision. On 28 April 2015 Mr K sought review of that decision by this Tribunal.

2. This application by Mr K relates to the decision which was made on 9 July 2014 and which was reviewed by the SSAT. This Tribunal determined by order on 29 May 2015 that it does not have jurisdiction to review a decision which was described as “the refusal to allow me access to an indigenous social worker to discuss what assistance is available for me and my family”. The issue before this Tribunal is whether the decision to pay FTB, Part B at a reduced rate was correct.

3. Mr K seeks review of the decisions relating to the payment of FTB since he first sought review on 11 October 2007. However, in this review process the Tribunal only has jurisdiction to review the decision of 9 July 2014 as it is that decision which has been reviewed and affirmed by the SSAT.[1]

   [1] A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (Superseded) s 142.

   LEGISLATION

4. Section 58 of the A New Tax System (Family Assistance) Act 1999 (Cth) (“the Act”) provides for the calculation of FTB:

   Annual rate of family tax benefit for individuals

   (1)  Subject to sections 60 to 63, an individual's annual rate of family tax benefit is to be calculated in accordance with the Rate Calculator in Schedule 1.

5. Schedule 1 of the Act provides for an income test that requires the maximum rate of FTB to be reduced by a formula that takes into account the individual’s “adjusted taxable income”. Clause 29 provides for the general method of calculating the Part B rate. As Mr K is a member of a couple his Part B rate is the maximum rate less the reduction for “adjusted taxable income”: sch1, cl 29(2), Step 3.

6. Clause 2(1) of sch 3 defines “adjustable taxable income”:

   2   Adjusted taxable income

   (1)  For the purposes of this Act and subject to subclause (2), an individual's adjusted taxable income for a particular income year is the sum of the following amounts ( income components ):

   (a)  the individual's taxable income for that year;

   …

   (e)  the individual's tax free pension or benefit for that year;

   …

7. Clause 3(2) of sch 3 of the Act provides that where a person is a member of a couple the individual’s relevant “adjusted taxable income” is the income of the person who earned the lower amount.

   CONSIDERATION

8. There is no issue about the entitlement of Mr K to be paid FTB, part A. This application relates to the method of calculation of FTB, Part B under cl 29 of sch 1 of the Act. It is fair to say that Mr K based his submissions upon the Departmental Guide which contains the statement: “Payments are reduced by 20c for each dollar of income earned over $5,329”.[2] Mr K contended that “reductions to FTB are related solely to earned income”. Mr K also placed reliance on provisions of the Act that refer to where a partner is referred to as an “earner”: see, sch 1, cl 29A(3). Mr K said he and his partner do not earn any taxable income. As his partner is the lower income earner, her income is taken into account in accordance with cl 3(2) of sch 3 of the Act.

   [2] A guide to Australian Government payments (1 July – 19 September 2014) p 6.

9. The reference in the Departmental Guide to “income earned” does not reflect the scheme of calculation of “adjusted taxable income” under the Act. Under cl 2(1) of sch 3 of the Act the term “adjusted taxable income” is not restricted to earned income; it includes “the individual’s tax free pension or benefit”.[3] The adjusted taxable income of the partner of Mr K includes the carer payment that she receives as it is a tax free benefit under cl 7(c) of sch 3 of the Act. It is not necessary in these reasons to disclose the amount of that carer payment except to find that it is excess of $5,329 for the 2014-2015 income year.

   [3] A New Tax System (Family Assistance) Act 1999 (Cth) sch 3, cl 2(1)(e).

10. I have some sympathy for the applicant who has misapprehended the social security law after looking at the Departmental Guide, nevertheless this Tribunal is bound to apply Acts of Parliament.

    DECISION

11. I affirm the decision under review.

I certify that the preceding 11 (eleven) paragraphs are a true copy of the reasons for the decision herein of Dr P McDermott RFD, Senior Member

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Associate

Dated 27 October 2015

Date of hearing	25 September 2015
Applicant	In person
Solicitors for the Respondent	Department of Human Services