MANDY JULIE REID and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

[2009] AATA 410

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 410

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2008/3788

GENERAL ADMINISTRATIVE DIVISION		)
Re		MANDY JULIE REID

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Senior Member L Hastwell

Date5 June 2009

PlaceAdelaide

Decision The Tribunal varies the decision under review.

..............................................

L HASTWELL
  (Senior Member)

CATCHWORDS

SOCIAL SECURITY – pensions, benefits and allowances – eligibility for Family Tax Benefit – assessment of care arrangements for FTB child – establishing pattern of care – conflicting evidence as to pattern of care – special circumstances considered – financial hardship alone not sufficient – applicant’s failure to give correct account of pattern of care in first instance – no special circumstances established – decision varied

A New Tax System (Family Assistance) Act 1999 ss 22(7), 25, 59

A New Tax System (Family Assistance) (Administration) Act 1999 ss 71(1), 97(1), 101

Family Assistance Guide

Re Ivovic and Director-General of Social Security (1981) 3 ALN N61
Boscolo v Secretary, Department of Social Security (1999) 90 FCR 531
Doelle v Department of Families, Housing and Community Services [2009] FMCA 388

REASONS FOR DECISION

5 June 2009   Senior Member L Hastwell   

1.      Mandy Reid (the applicant) and Bevan Nicholas are the parents of Jezzika Eliza Nicholas. 

2.      Ms Reid and Mr Nicholas separated in September 2004. 

3.      Ms Reid received the full Family Tax Benefit (FTB) for Jezzika for the years ended 30 June 2005 and 30 June 2006. 

4.      In July 2007 Mr Nicholas lodged a claim for FTB for Jezzika in which he claimed to have cared for Jezzika on a certain number of nights in each of the previous two financial years.  Ms Reid gave a differing account of her pattern of care for Jezzika for each of the relevant periods.

5.       Centrelink made an assessment of the patterns of care for Jezzika as between Ms Reid and Mr Nicholas in each of the financial years in question and, as a result of this assessment, they raised an overpayment of FTB against Ms Reid of $1,539.93 for the financial year 2004/2005 and $895.90 for the financial year 2005/2006. 

6.      Ms Reid sought review of that decision and an Authorised Review Officer (ARO) affirmed the decision on 17 December 2007.  Upon review, the Social Security Appeals Tribunal (the SSAT) affirmed the decision on 17 July 2008.  Ms Reid now seeks review of the SSAT decision to this Tribunal.

relevant legislation

7.      The relevant legislation is contained in the A New Tax System (Family Assistance) Act 1999 (the FA Act) and the A New Tax System (Family Assistance) (Administration) Act 1999 (the FA Administration Act).

8.      In this case, it is conceded that Ms Reid satisfies all the requirements to be eligible for FTB during each of the relevant financial years in question with respect to Jezzika.

9. Section 22 of the FA Act sets out the definition of a FTB child. That section also recognises that there will be occasions where a child is the FTB child of more than one individual because of the particular care arrangements that are in place with respect to a child. This can give rise to competing claims for FTB with respect to a child for the same period of time.

10. Section 22(7) of the FA Act provides as follows:

“(7)     If:

(a)the Secretary is satisfied there has been, or will be, a pattern of care for an individual (the child) over a period such that, for the whole, or for parts (including different parts), of the period, the child was, or will be, an FTB child of more than one other individual under subsection (2), (3), (4), (5) or (6); and

(b)one of those other individuals makes, or has made, a claim under Part 3 of the A New Tax System (Family Assistance) (Administration) Act 1999 for payment of family tax benefit in respect of the child for some or all of the days in that period; and

(c)subsection 25(1), (1A) or (1B) does not require that the child be taken not to be an FTB child of that individual for any part of that period;

the child is to be taken to be an FTB child of that individual for the purposes of this section on each day in that period, whether or not the child was in that individual’s care on that day.”

11. The pattern of care determined under s 22(7) of the FA Act is used to then calculate the percentage of care that each individual has for the child and that determines each individual’s entitlement to FTB for a child for the relevant period.

12. Section 59 of the FA Act allows for the rate of FTB to be split between two adults.

13. Section 22 of the FA Act provides no specific guidance as to how the Secretary determines the “pattern of care” and then the percentages of care that two individuals have for a FTB child over a period for the purposes of the legislation.

14.     Paragraph 2.1.1.45 of the Family Assistance Guide (the FA Guide) is designed to give some assistance to the decision-maker in determining the pattern of care where two individuals cannot agree as to the pattern of care that they have for a FTB child.

15.     How to convert a pattern of care to a percentage of care is dealt with in the FA Guide at paragraph 2.1.1.50.

16. If an individual’s percentage of care of a FTB child is less than 10 percent, then they have no entitlement to FTB (s 25 of the FA Act).

17.     Paragraph 2.2.1.30 of the FA Guide gives some practical advice to the decision-maker as to how to verify shared care arrangements where there is disagreement between the parties.

18. Section 71(1) of the FA Administration Act provides that if, during a period, a person has been paid an amount by way of FTB that they were not entitled to, then the amount so paid is a debt to the Commonwealth.

19. If there has been an overpayment pursuant to s 71(1) of the FA Administration Act, there is still the possibility that there can be a waiver of the debt either because of an error or in the special circumstances of the case. The relevant provisions are as follows:

“97       Waiver of debt arising from error

(1)The Secretary must waive the right to recover the proportion (the administrative error proportion) of a debt that is attributable solely to an administrative error made by the Commonwealth if subsection (2) or (3) applies to that proportion of the debt.

…

101    Waiver in special circumstances

The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:

(a)the debt did not result wholly or partly from the debtor or another person knowingly:

(i)making a false statement or a false representation; or

(ii)failing or omitting to comply with a provision of the family assistance law; and

(b)there are special circumstances (other than financial hardship alone) that make it desirable to waive; and

(c)it is more appropriate to waive than to write off the debt or part of the debt.”

issues

20.     The issues to be determined in this case are:

·what pattern of care did Ms Reid and Mr Nicholas each have of Jezzika in the 2004/2005 and 2005/2006 financial years;

·what was the percentage of care that is to be used for the purposes of calculating each party’s entitlement to FTB  during each of those periods; and

·if there has been an overpayment to Ms Reid, whether there are any special circumstances in her case or any error on the part of the Department that would justify a waiver of the debt?

background facts

21.     An Interim Restraint Order was taken out by Child and Family Services against Bevan Nicholas in December 2005 as a result of which an order was made on 6 December 2005 that effectively prevented Mr Nicholas from thereafter spending any time or seeing Jezzika.

22.     Mr Nicholas made contact with Centrelink in 2007 and claimed that he had shared care of Jezzika from 1 October 2004 to 5 December 2006 (T12/86).  In particular, he said that he had Jezzika for 219 nights in the 2004/2005 financial year and for 142 nights in the 2005/2006 financial year.  He was sent a calendar and also asked to indicate exactly when he had the child in his care. 

23.     When Mr Nicholas returned his calendars to Centrelink on 19 July 2007, he advised that he was mistaken and that he had last had Jezzika in his care on 2 December 2005 and not 2006 as previously advised.

24.     In the calendar that he returned to Centrelink on 19 July 2007, he had increased the percentage of nights that he was claiming.  On a form subsequently lodged by him at Centrelink, he stated that between the period 1 October 2004 and 2 December 2005, he had the child with him for 29 percent of the time.  This is the percentage that the Department then elected to use in determining the parties’ care percentages with respect to Jezzika.

25.     Ms Reid was contacted by the Department on 9 July 2007 and was asked to advise the percentage of care that she had had for Jezzika during the two relevant periods.  She advised that prior to late 2005 Mr Nicholas’ care of Jezzika was patchy and that he would see her over each weekend for a month and then not see her again for three months.  She did not believe that he had enough care even to claim 10 percent.  She was asked to return calendars marked with when she said that she had Jezzika in her care during the relevant periods.  Those calendars (T7/37-38) indicate that she had Jezzika with her for 90 percent of the time during each of the relevant periods. 

26.     Ms Reid later calculated that Jezzika may have spent 63-64 nights with Mr Nicholas over a 12 month period which equated, on the ARO’s calculation, to 18 percent of care.

the hearing

27. Ms Reid represented herself at the hearing. The documents filed under s 37 of the Administrative Appeals Tribunal Act 1975 were received into evidence as Exhibit R1.

additional information provided by ms reid

28.     Ms Reid provided the Tribunal with some additional information as follows:

·a copy of a letter sent to her by Mr Nicholas dated 16 May 2005 (Exhibit A2); 

·some journals from a charity in Tasmania where her father had made notations as to when she had attended at the charity with the children (Exhibit A1);

·a copy of an order of the Magistrates Court (Children’s Division) in Launceston made on 6 December 2005 that restrained Mr Bevan from having any further contact with Jezzika; and

·the application and affidavit in support of that application.

29.     Ms Reid told the Tribunal that she separated from Mr Nicholas in October 2004, but thereafter they continued to have a relationship until January 2005.  They had an argument in January 2005 as a result of which neither she nor Jezzika saw him until late February 2005, when he cared for Jezzika for two days while Ms Reid attended her grandmother’s funeral.

30.     She said that between the date of initial separation in October 2004 and January 2005, she was present when Jezzika was with Mr Nicholas as they continued to have a relationship, albeit in different houses.  She said that he then resumed seeing Jezzika on an occasional basis from late February 2005, but she claimed that he did not see her on many nights. 

31.     She said that in June or July 2005, he was charged with some criminal offences and the welfare authorities in Tasmania became involved. 

32.     In December 2005, an Interim Restraint Order was made by the Child and Family Services Department in Tasmania preventing Mr Nicholas from having any further contact with Jezzika.  This information was subsequently confirmed by the Court Order and Affidavit that she provided to the Tribunal.

33.     While she was still living in Tasmania, she would spend time assisting at a  charity in which her father was involved.  She provided the Tribunal with some  log books that she believed would be of assistance to the Tribunal in establishing when Jezzika was at the charity with Ms Reid and therefore not with Mr Nicholas.

34.     She said that after the funeral had occurred in late February 2005, they had intended that Mr Nicholas see the child regularly, but he frequently missed his fortnights with her.  She denied that he ever had any school holiday blocks of time with the child after September 2004.

35.     After Mr Nicholas ceased having any time with Jezzika at the end of 2005, Ms Reid moved to South Australia where she is now residing.

consideration of the other evidence

36.     The letter from Mr Nicholas that the Tribunal accepts as genuine, and which was dated 16 May 2005, contained some dialogue from which one could infer that Mr Nicholas had not seen Jezzika for some time at that point in time.  He comments as follows:

“Now for the reason I haven’t rang on the phone etc, is ‘NOT’ because I don’t care about Jezzika, it has nothing to do with her, and it has nothing to do with you, it’s just me and my way of coping with things at this time.  … I couldn’t handle seeing you or talking to you on the phone, it would put me a bad depression, so for my own protection I have removed myself totally from your life because if I don’t see you or hear from you I am OK.  Unfortunately it means Jezzi won’t see or hear from me either, but I figure that at least this way she still has a father.

I don’t know how long this will go on for, it could be months or even years, so don’t expect any calls from me in the near future, because I will avoid you at all costs, everyone has thier [sic] weaknesses, and mine is you.”

37.     It would appear that Ms Reid came to South Australia in 2006 to get away from Tasmania and to start a new life.  She claims to have never received any child support from Mr Nicholas, although she said that at some stage he was actually working.

38.     The Tribunal was provided with a copy of an Interim Restraint Order and the Application and Affidavit in support of that Restraint Order which was filed in the Magistrates Court (Children’s Division) at Launceston on 6 December 2005.

39.     It establishes that there was a restraining order in place as of that date that prevented Mr Nicholas seeing Jezzika thereafter.

40.     The Affidavit in support of that Application made by an Authorised Officer of the relevant department deposed to an interview that had taken place with Ms Reid.  Ms Claire Gray deposed to the fact that the information received by that department was that the child Jezzika had “non-court ordered contact” with her father from Friday to Monday of each week.  It then refers to the conversations that she had with Ms Reid who agreed that she would not allow the child to go to her father’s house that weekend because of the impending application for restraint orders even though Ms Reid did not believe that there was any reason to have concern about Jezzika’s safety.

41.     Each of the two parties has produced third party statements as to their respective care of the child. 

42.     Ms Reid’s father had prepared a statutory declaration in which he deposed to seeing Mandy Reid with Jezzika on certain weekends between October 2004 and December 2005.  Belinda Reynolds had sworn a similar declaration, as have some other acquaintances of Ms Reid. 

43.     A number of individuals had also sworn statutory declarations in support of Mr Nicholas’ claim.  The various statutory declarations prepared by Mr Nicholas’ witnesses were identical with the names of the deponent and the years that they had known Mr Nicholas filled in blank spaces that had been left for that information.

44.     There is conflict in the evidence provided by the third parties as to the pattern of care of Jezzika by each party.

consideration of the evidence

45.     It is impossible for the Tribunal to establish the exact truth with respect to the nights that Jezzika spent in the care of Ms Reid and in the care of Mr Nicholas during the relevant period. 

46.     The Tribunal can draw no conclusion from the statutory declarations produced by each party from third parties.  They conflict in the information presented about the respective parties’ pattern of care for Jezzika.  They have been sworn by third parties who are not available for cross-examination.  The identical content in Mr Nicholas’ statutory declarations detract from any veracity they may have.

47.     It would appear from all the evidence that despite what Ms Reid has said, she was happy for Mr Nicholas to spend regular time with his daughter on weekends, but it would also appear that there were periods when there were breaks in that care as is evidenced by the letter sent by Mr Nicholas to her on 16 May 2005 in which he indicated that there had been some break in the time that he had seen Jezzika.  It suggests a break of at least some weeks or more.

48.     The only reliable objective evidence is that contained in the affidavit of Claire Gray which deposes to Mr Nicholas seeing Jezzika regularly at that point in time, namely in late 2005.

49.     Ms Reid is very angry at the fact of the overpayment and has given varying accounts of the amount of care that she provided for Jezzika during the relevant period. 

50.     The Tribunal found that the log books provided by the charity in Tasmania were not at all helpful and the statutory declarations prepared by each party were self-serving and could not be taken as reliable evidence. 

51.     From all the evidence, it appears that Mr Nicholas had weekend time with Jezzika on quite a number of occasions between the date that the parties separated and December 2005, when he ceased having any time at all with the child. 

52.     He did not have any contact with Jezzika after the weekend of 19/20 November 2005 as the affidavit in support of the Restraint Order states that Ms Reid agreed that Jezzika would not be allowed to go to her father’s house that following weekend which was the weekend of 26/27 November 2005 and she again agreed to not send the child on the following weekend.  Thereafter the Restraint Order took effect.

53.     It would appear that when Mr Nicholas did have time with Jezzika, it was often a three day weekend when the child would stay with her father from the Friday until the Monday as set out in paragraph 2 of the affidavit of Ms Gray that was filed with the Magistrates Court in Tasmania.

54.     It would appear that a regular pattern of Mr Nicholas spending weekend time with Jezzika did not commence until at least late May or early June 2005.

findings of fact

55.     If Mr Nicholas spent 18 of the available 20 weekends between July and the weekend of 19/20 November 2005 with Jezzika, then based on a three night stay with her, then he would have had her with him in the 2005/2006 year for 64 nights. 

56.     The Tribunal makes the finding, on the balance of probabilities, that in the 2005/2006 financial year Mr Nicholas had Jezzika with him for approximately 64 of 365 nights.  After 20 November 2005, he had no further contact with her.  This amount to him spending 17.53 percent of the nights in that financial year with Jezzika.

57.     It is more difficult to assess the period from 1 October 2004 to 30 June 2005.

58.     The Tribunal is satisfied that Mr Nicholas’ regular weekend contact with Jezzika did not commence until approximately late May 2005. 

59.     The Tribunal accepts Ms Reid’s evidence that the parties had an on-again, off-again relationship between October 2004 and January 2005 when, if Jezzika was with Mr Nicholas, it was because Ms Reid was usually staying with him as well. 

60.     The Tribunal accepts her evidence that the parties had a break in their relationship in January 2005 when the final breakdown occurred and that a pattern of care resumed in late February 2005 with a further break in care for some weeks around April and May 2005 and with the resumption of regular contact on a weekend basis and probably for three nights each weekend from late May 2005.

61.     Based on that, the Tribunal finds, on the balance of probabilities, that Mr Nicholas had Jezzika in his sole care for no more that 30 nights between 1 October 2004 and 30 June 2005.  This amounts to him having Jezzika in his sole care for less than 10 percent of the nights in that financial year.

62.     In all the circumstances, the Tribunal remits the matter back to the Department to determine any overpayment based on the finding that between 1 October 2004 and 30 June 2005, Mr Nicholas had Jezzika in his care for an estimated total of 30 nights and from 1 July 2005 until 30 June 2006, Mr Nicholas had Jezzika in his sole care for 64 nights.

63.     There will remain an overpayment to Ms Reid for at least one of those years which will need to be recalculated by the Department.

64.     This case highlights the difficulties caused by legislation that allows a parent to lodge a retrospective claim for care of a child for a period long gone. 

65.     Ms Reid received no child support from the father of Jezzika and had moved to South Australia to get away from the situation in which she found herself in Tasmania.  More than 18 months after he last spent any time with Jezzika, Mr Nicholas has claimed a financial benefit for caring for her.  This has been a source of stress and confusion for Ms Reid and the Tribunal has some sympathy for her position in the circumstances when she has suddenly found herself exposed to a debt.  Ms Reid is not a sophisticated person and is distressed at which she perceives to be the injustice of the situation.

66.     The Tribunal must have regard as to whether there are any circumstances in this case that would justify waiver of some or all of the overpayment as varied.

67.     The Tribunal must have regard to the case law which establishes that special circumstances must be something “unusual” or “different”.  In Re Ivovic and Director-General of Social Security (1981) 3 ALN N61, the Tribunal commented that in a particular case to establish special circumstances there must be:

“… a factor or factors which justify the making of an exception in whole or in part to the principle of liability which the Act otherwise establishes. …”

68.     In Boscolo v Secretary, Department of Social Security (1999) 90 FCR 531, the Federal Court said:

“… there must be something unusual or different to take the matter the subject of the discretion out of the ordinary course …”

69.     In the recent decision of Doelle v Department of Families, Housing and Community Services [2009] FMCA 388, the Federal Magistrates Court endorsed this line of authority.

70. The Tribunal accepts that Ms Reid is in some financial difficulty, but that alone is not sufficient to justify making the exception as the FA Administration Act specifies that the circumstances must be “other than financial hardship alone” (supra paragraph 19).

71. The FA Administration Act does not put a time limit on a person claiming FTB with respect to a child and so the fact that the claim was made by Mr Nicholas 18 months or more after he last saw his child cannot of itself be a special circumstance.

72.     Ms Reid was not accurate in the information she gave to the Department and she gave varying accounts of Mr Nicholas’ time with the child.  Had she been clear and specific with the Department at the outset about the amount of time that he had cared for Jessica, she may not have found herself in the current situation.

73.     Ms Reid presented no other evidence with respect to special circumstances.

74.     In the circumstances, the Tribunal finds that there is nothing in this case that would justify a finding of special circumstances and therefore there is no basis for varying the overpayment as varied.

I certify that the 74 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member
L Hastwell

Signed:         .............J Coulthard.........................................
  Associate

Date of Hearing  12 May 2009
Date of Decision  5 June 2009
Advocate for the Applicant       Self-represented
Advocate for the Respondent   Martine Welfare

Solicitor for the Respondent     Centrelink Legal Services and Procurement Branch