MacDonald and Secretary, Department of Family, Community Services and Indigenous Affairs and Anor

[2007] AATA 1349

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1349

ADMINISTRATIVE APPEALS TRIBUNAL        № N2006/190

GENERAL ADMINISTRATIVE  DIVISION

Re           Tammy MacDonald

Applicant

AndSecretary, Department Of Family, Community Services and Indigenous Affairs

Respondent

And           Mark Evans

Third Party

DECISION [2007] AATA 1349

Tribunal:       Ms R Hunt, Senior Member

Date:23 May 2007

Place:Sydney

Decision:The reviewable decision is affirmed and remitted to the Secretary with a direction that the debt owed by the applicant be calculated in accordance with that decision that the applicant had 20% of the care of two children from 29 October 2003 to 25 November 2004.

…………[Sgd]..………..

Robin Hunt

Senior Member

SOCIAL SECURITY – family tax benefit – shared care of children - correct calculations of respective percentages of care  – decision affirmed and remitted for re-calculation of debt

A New Tax System (Family Assistance) Act 1999, ss 21, 22 and 23

Social Security (Administration) Act 1999

Wade v Secretary, Department of Family & Community Services [2004] FCA 1660.

REASONS FOR DECISION

23 May 2007  Ms R Hunt, Senior Member

INTRODUCTION

1.      Ms MacDonald, the applicant, and the father of her children, Mr Evans, separated in 2004. They agreed to share the care of their three children. Under terms which were the subject of family court orders, the three children of the marriage resided with their father. The orders granted Ms MacDonald contact with the children at particular times. Centrelink initially paid a proportion of family tax benefit to Ms MacDonald based on the assumption that she was caring for the children at the times indicated in family court orders. However, Ms MacDonald did not care for the children at all the times contemplated. Centrelink then raised a debt against Ms MacDonald for overpayment.

2.      Ms MacDonald argued that she was entitled to the money she had received because she had made reasonable efforts to collect the children at the times ordered by the court. Ms MacDonald’s solicitor asked the tribunal to make a decision on the papers and the other parties did not object to this course. Mr Evans, the third party, was not represented and made no submissions.

3. I had before me the documents lodged by the respondent pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (the T‑documents), a statement of facts and contentions and written submissions from the respondent. For the applicant I had “a statement of facts, contentions and new evidence” as well as written submissions on her behalf which were submitted by her solicitor together with a copy of a letter to the authorised review officer (ARO) on 20 October 2005, which also made some representations.

THE ISSUE

4.      The issues in this case are:

·     what are Ms MacDonald’s and Mr Evans’ respective percentages of shared care of their children, for the period 23 March 2004 to 30 June 2005; and

·     whether Ms MacDonald made reasonable efforts to regain the care of the children following the terms of settlement reached on 23 March 2004.

5. The applicant argued that she was entitled to be paid the benefit pursuant to section 23 of the A New Tax System (Family Assistance) Act 1999.

Positions of the Parties

6.      Ms MacDonald’s position is well summarised in her Statement of Facts, Contentions and New Evidence. This sets out that she and Mark Evans separated on 29 October 2003 and that there had been a significant and ongoing dispute between them. They agreed that Ms MacDonald should have contact with the children and their arrangements were the subject of three orders under the Family Law Act 1975 made on about 24 March 2004, then on 22 November 2004 and again on 30 May 2005.  

7.      Despite these orders, Ms MacDonald had no contact with the children between 23 March 2004 and 25 November 2004. She continued to receive Centrelink payments over this period. Her argument is that she was entitled to those payments because she made reasonable efforts to exercise her contact rights. As evidence of this, she refers to the letter from her solicitor to the ARO dated 20 October 2005, the grant of legal aid to her former solicitors on 6 July 2004 and her signed authority for her former solicitors to forward her file to her new solicitor.

8. In his letter to the ARO, Ms MacDonald’s solicitor, Mr Malone, referred to affidavits of Mr Evans and of Ms MacDonald and other documents on the Centrelink file, which deal with telephone contacts and attempts by Ms MacDonald to see the children. As Mr Maloney observes, this evidence was not tested but does indicate that Ms MacDonald did make efforts to see her children. Mr Maloney also pointed to Ms MacDonald’s lodgement of contravention orders and her seeking of legal aid as evidence that she was trying to overcome barriers to her seeing the children. He asked the ARO to exercise the discretion available under s 23 of A New Tax System (Family Assistance) Act 1999 in favour of the applicant.

CONSIDERATION

9. Section 21 of A New Tax System (Family Assistance) Act 1999 (Family Assistance Act) provides, in part:

(1)  An individual is eligible for family tax benefit if:
   (a)  the individual has at least 1 FTB child …

(2)However, the individual is not eligible for family tax benefit if another provision of this Subdivision so provides.

10. Section 22 of the Family Assistance Act provides when an individual is an “FTB child” of another individual. Subsection 22 (3) most closely resembles Ms MacDonald’s situation in respect to her children, as her solicitor submitted. The section provides, in part:

(3)  The individual is an FTB child of the adult if:

(a)  the individual is aged under 18; and

(b)  a family law order, … is in force in relation to the individual; and

(c)  under the order …, the adult is someone with whom the individual is supposed to live or someone with whom the individual is supposed to spend time; and

(d)  the individual is in the adult's care; and …

11.     Ms MacDonald contends that each of her children is her “FBT child”. Paragraph 22(3)(c) contemplates that there will be times when the ‘individual’ or child is not in the adult’s care. Among other requirements, paragraph 22(3)(d) says that, for the provision to apply to an individual, the individual is in the adult's care. These paragraphs apply to situations of shared care, which is the situation between Mr Evans and Ms MacDonald.

12. Next, section 23 makes provision for situations where something happens that prevents an FTB child from being in an individual's care without consent. The section provides, in part

(1)  This section applies if:

(a) an individual is an FTB child of another individual (the adult ) under subsection 22(2) or (3) …; and

(b)an event occurs in relation to the child without the adult's consent that prevents the child being in the adult's care; and

(c) the adult takes reasonable steps to have the child again in the adult's care.

…..

Section 23(5) provides,

(5)  In this section:

"qualifying period" means the period beginning when the child ceases to be in the adult's care and ending at the earliest of the following times:

(a)  if the child again comes into the adult's care at a later time--that later time;
   (b)  after 14 weeks pass since the child ceased to be in the adult's care;
   (c)  if:

(i)  the adult is a parent of the child; and

(ii)  no family law order, registered parenting plan or parenting plan is in force in relation to the child; and

(iii)  the child comes into the care of the other parent at a later time;

that later time.

13. Ms MacDonald argues that she is in the situation contemplated by section 23(1)(c). As I understand her claim, she says she did not consent to the children being in her former husband’s care at the times she was entitled to access and she took reasonable steps to have the children again in her care.

14.     The respondent’s facts and contentions set out events recorded in the T documents which occurred between 23 March 2004 and 30 June 2005. Mr Evans and the children continued to live in the family home at Coffs Harbour. Based on representations by Ms MacDonald and the then current family court orders regarding her contact with the children, Centrelink determined to pay her 26% of the benefit for each of the 3 children.  On 27 May 2004, after discussion with both parents, Centrelink increased Ms MacDonald’s share of the benefit to 29%.

15.     On 10 August 2004, Ms MacDonald sought relief for contravention of the consent orders. In her supporting affidavit of 18 August 2004, a copy of which was received by Centrelink on 15 March 2006, Ms MacDonald stated she had moved away from Coffs Harbour in October 2003 and had moved back on 2 April 2004. She had not had any contact with the children since the time she moved back on 2 April to the date of the affidavit, which was sworn on 11 August 2004. Ms MacDonald detailed times and places when she waited in the expectation that the children would be there for her to collect them. She mentioned times when she had spoken to the children but they had declined to go with her. Ms MacDonald said she believed that Mr Evans had turned the children against her and that the younger children followed the oldest child.

16.     Mr Evans also furnished an affidavit for the purpose of the contravention proceedings and a copy of it is also on the Centrelink file. Mr Evans admitted he had not taken the children to the location where Ms MacDonald had waited for them because the children had said they did not want to go there. Both affidavits described times when Ms MacDonald visited the children in Mr Evans’ presence at his home although they gave different accounts of what occurred during those visits. Subsequently, the court ordered new contact times for Ms MacDonald starting from 24 November 2004.

17.     The respondent notes in the facts and contentions that Ms MacDonald resumed shared care of two of the children from 26 November 2004.  Then, on 30 May 2005, the court issued further orders, in which Ms MacDonald withdrew her contravention application and she was given new contact entitlements to two of the children commencing on 3 June 2005.  Ms MacDonald advised Centrelink of these arrangements on 21 June 2005.

18.     On 17 August 2005, Centrelink raised a debt against Ms MacDonald of $1,767.50 for the period 1 July 2003 to 30 June 2004 and $3,236.96 for the period 1 July 2004 to 30 June 2005. Certain Centrelink determinations and internal reviews took place concerning the appropriate percentages of care and whether the resulting debt should be waived. On 17 January 2006, the Social Security Appeals Tribunal (SSAT) decided the shared care percentages of 20 per cent for two of the children and 0 per cent for the oldest child were correct and that the debt should be recalculated. The SSAT found no basis for debt waiver. This is the decision under review.

FINDINGS

19.     Ms MacDonald and Mr Evans legally shared the care of all three of the children until November 2004 when new court orders came into force and Ms MacDonald no longer had access rights to the oldest child except as agreed between her and the child. Contact arrangements with the other two children commenced on 3 June 2005.

20. Ms MacDonald claims that each of the children was her “FTB child” but both subsections 22(2) and 22(3) require that the child is in the adult’s care before the child meets the definition of that term. An exception occurs where an event occurs in relation to the child without the adult's consent that prevents the child being in the adult's care and the adult takes reasonable steps to have the child again in the adult's care. See section 23 provisions above.

21.     None of the children were physically in Ms MacDonald’s care from 29 October 2003 to 25 November 2004. While Ms MacDonald made some efforts to see the children in this time, I do not accept that Ms MacDonald’s situation comes within the exception described in paragraphs 23(1)(b) and (c).

22.     Ms MacDonald moved away from the region where her children were living with their father. She has not provided any evidence that she tried to see the children between 29 October 2003 and 2 April 2004 during the period when she resided in Sydney. There is no element of lack of consent on her part during this period or of her taking reasonable steps to have the children in her care. She had agreed to the terms ordered by the court for the children to live with their father. Then, in her affidavit, she details unsuccessful attempts to see the children from 14 May 2004, after she returned to Coffs Harbour in the hope of exercising her contact rights. She also mentions visits to the family home but she does not claim to have taken the children into her care at those visits.

23.     Under subsection 23(5), the qualifying period begins when the child ceases to be in the adult’s care and ends if the child comes into the adult’s care at a later time or after 14 weeks. The Guide to the Family Assistance Act Law at 2.1.1.70 explains that the 14-week qualifying period is intended to apply where a child is removed from a parent’s care without any legal authority. While Ms MacDonald did not consent to her children not coming with her when she tried to exercise her contact rights from 14 May 2004, they were not removed from her care. They were in their father’s care and declined to accompany her. I make this finding, on balance, taking into account the affidavits of both parents referred to above. Therefore, the qualifying period does not apply in Ms MacDonald’s case.

24.     As the oldest child was never in Ms MacDonald’s care after 29 October 2003 she was not her FTB child for any of the period in question. This means she had no entitlement in respect to the oldest child. The other children also were not in Ms MacDonald’s care and therefore not her FTB children from 29 October 2003 to 25 November 2004. This means she had no entitlement for that period.

25.     The SSAT calculated that Ms MacDonald had 44 overnight contacts with the two younger children in the 217 days from 26 November 2004 to 30 June 2005, and worked out that 20 per cent of the benefit was payable to her. The Secretary agrees in paragraph 51 of the facts and contentions that this is correct for this period. The overnight stay approach was also endorsed in Wade v Secretary, Department of Family & Community Services [2004] FCA 1660. I therefore affirm the SSAT decision in this respect.

26.     As Ms MacDonald had no FTB children from 29 October 2003 to 25 November 2004, she had no entitlement for that period, and there has been an overpayment to her for the period. The Secretary calculates the debt for the financial year 1 July 2003 to 30 June 2004 as amounting to $1,767.50. The applicant has not disputed this calculation and I therefore accept it as being correct.

27.     As to the remainder of the period, from 1 July 2004 to 30 June 2005, the Secretary concedes that the wrong percentage of care was used by Centrelink in calculating the overpayment. The ARO calculated the debt of $$3,236.96 using 12 per cent of care as the basis for Ms MacDonald’s benefit entitlement. The SSAT calculated her entitlement should be 20 per cent. This will result in a reduction of the debt. New calculations will have to be made to work out the actual debt for the 2004/2005 financial year. I therefore will remit the matter on the basis that the Secretary must make the correct calculation.

28. As to possible waiver under section 97 of the Social Security (Administration) Act 1999 or special circumstances under section 101 of that Act, the applicant has made no submissions. I therefore make no findings that the debt, once correctly calculated, should be waived.

CONCLUSION

29.     I find that the decision of the SSAT was correct and should therefore be affirmed. However, I note that the correct calculation of part of the debt owed by Ms MacDonald has not, unfortunately, been made. I will remit the matter to the Secretary for this to be done on the basis that the applicant had 20% of the care of the two younger children from 26 November 2004 to 30 June 2005.

DECISION

30.The decision under review is affirmed and remitted to the Secretary with a direction that the debt owed by the applicant be calculated in accordance with that decision that the applicant had 20 per cent of care of two children from 29 October 2003 to 25 November 2004.

I certify that the 30 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member Hunt

Signed:         [Talaishia Collis]
  Associate

Date/s of Hearing  9 January 2007 
Date of Decision  23 May 2007
Solicitor for the Applicant          Stacks/Coffs Harbour     
Solicitor for the Respondent     Centrelink Legal Services Branch