May and Secretary, Department of Family and Community Services an D Anor
[2003] AATA 1201
•27 November 2003
CATCHWORDS – SOCIAL SECURITY – FAMILY TAX BENEFIT –
shared care of children – apportionment of benefit – whether correct amount of Family Tax Benefit paid to each carer where amount of contact differed from Family Court Order – pattern of care – decision varied.
A New Tax System (Family Assistance) Act 1999 ss. 21, 22, 22A, 25 and 59
Child Support Legislation Amendment Act 2001 s. 3; Schedule 1A, items 19 and 20
A New Tax System (Family Assistance) (Administration) Act 1999 ss. 5, 7, 7A, 8, 9, 10, 13, 16, 17, 19, 21, 23, 24, 25, 27, 27A, 28, 28A, 29, 30, 31, 31A, 31B, 51B, 54B, 70, 71, 104, 105, 107, 225 and 226
Data-matching Program (Assistance and Tax) Act 1990
Social Security Act 1991 s. 869(1)
Bertelli and Secretary, Department of Social Security (1996) 41 ALD 458
Nowicz and Secretary, Department of Family and Community Services (2001) 65 ALD 314
Blight and Secretary, Department of Family and Community Services [2002] AATA 1123
DECISION AND REASONS FOR DECISION [2003] AATA 1201
ADMINISTRATIVE APPEALS TRIBUNAL )
) S2002/327
GENERAL ADMINISTRATIVE DIVISION )
Re JULLIANNE KAYE MAY
Applicant
AndSECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
AndDAVID HORNE
Party Joined
DECISION
Tribunal: Deputy President S A Forgie
Date: 27 November, 2003
Place: Adelaide
Decision:The Tribunal:
1.set aside the decision of the Social Security Appeals Tribunal dated 14 August, 2002; and
2.substitute a decision that:
(1)the decision of a delegate of the respondent dated 28 December, 2001 and affirmed by an Authorised Review Officer on 24 May, 2002 is varied by:
(a) setting aside that part that rejected the applicant’s claim for FTB at the rate of 100% for the period from 19 October, 2001 to 13 December, 2001; and
(b) substituting a decision that the applicant is entitled to FTB at the rate of 100% in respect of the FTB children, Erin and Nicole, during the period from 19 October, 2001 to 13 December, 2001; and
(2)the decision is otherwise affirmed.
S A FORGIE
Deputy President
REASONS FOR DECISION
On 12 September, 2002, the applicant, Mrs Julianne Kaye May, applied for review of a decision of the Social Security Appeals Tribunal (“SSAT”) dated 14 August, 2002. The SSAT had affirmed a decision made by a delegate of the respondent, the Secretary of the Department of Family and Community Services (“the Secretary”) dated 28 December, 2001 and affirmed by an Authorised Review Officer on 24 May, 2002. The delegate had rejected a claim for 100% payment of the family tax benefit (“FTB”) payable in respect of her two children, Erin Horne and Nicole Horne, during the period 1 July, 2001 to 13 December, 2001.
At the hearing, Ms May represented herself as did Mr Horne, who attended the hearing with his wife. The Secretary was represented by Ms Pugsley, an Advocate from Centrelink. Regard was had to the documents lodged pursuant to s. 37 of the Administrative Appeals Tribunal Act 1975 (“T documents”).
THE ISSUE
The issue in this case is whether the correct amount of FTB was paid to Mrs May under the A New Tax System (Family Assistance) Act 1999 (“the FA Act”) in respect of her two children, Erin Horne and Nicole Horne, for the period from 1 July, 2001 to 13 December, 2001.
BACKGROUND
Some of the facts forming the background to the issue that I must resolve were not in dispute between the parties. On the basis of the material in the T documents and after listening to Mrs May, I have made the findings of fact set out in the following paragraphs.
Mrs May and Mr David Horne were married and had three children, Matthew, born on 3 January, 1987, Erin, born on 11 December, 1990 and Nicole born on 21 April, 1992. At some time in 1997, Mrs May and Mr Horne separated. On 23 September, 1999, a Registrar of the Family Court of Australia ordered by consent that the three children reside with Mrs May, who was to be responsible for their day-to-day care, welfare and development. Mrs May was required to give, and Mr Horne required to take, contact with the children as follows:
“(a) each alternate weekend from 10.00 a.m. Saturday to 5.00 p.m. Sunday;
(b)if a contact weekend falls on a long weekend, then for the Easter weekend from 10.00 a.m. on Good Friday to 5.00 p.m. on Easter Monday and for each other long weekend from 10.00 a.m. Saturday to 5.00 p.m. Monday;
(c)on Father’s Day from 10.00 a.m. to 5.00 p.m.;
(d)that the husband’s contact with the children be suspended from 10.00 a.m. on Sunday if Mother’s Day falls on a husband’s contact weekend;
(e)by telephone to each of the children, on the wife’s mobile telephone, each Sunday of the non-contact weekend between 6.30 p.m. and 7.00 p.m. or alternatively on the Monday immediately following that Sunday between 3.30 p.m. and 7.00 p.m.;
(f)that the children be at liberty to telephone the husband at any time;
(g)from 3.00 p.m. on 25th December 1999 to 5.00 p.m. on 26th December 1999 and in each alternate year thereafter;
(h)from 5.00 p.m. on 24th December 2000 to 3.00 p.m. on 25th December 2000 and in each alternate year thereafter;
(i)from 5.00 p.m. on 31st December 2000 to 5.00 p.m. on 1st January 2001 and in each alternate year thereafter;
(j)from 6.00 p.m. on 2nd January 2000 to 6.00 p.m. on 9th January 2000 and each year thereafter;
(k)such further or other contact as agreed or ordered.” (T documents, page 47)
On 13 June, 2001, Mr Horne lodged a claim for FTB in respect of the three children (T documents, pages 49B-49M). In relation to each of the children, Mr Horne stated that Mrs May is their mother. Matthew, he stated, had been living with him indefinitely. It was confirmed with Mrs May that Matthew had left her care and Mr Horne was granted 100% FTB from 4 June, 2001. In relation to Erin and Nicole, Mr Horne referred to the Family Court order and stated that he had 16% care of Erin and 14% care of Nicole. In respect of Erin and Nicole, Mrs May was also contacted by a Centrelink officer. A decision was then made that Mr Horne was entitled to FTB in respect of Erin at the rate of 18% and in respect of Nicole at the rate of 16% for the period 1 July, 2000 to 24 July, 2001.
From 25 July, 2001, the rate at which FTB was paid to Mr Horne was reduced to 10% in respect of each of Erin and Nicole. Mrs May was advised of that variation as was Mr Horne. On 9 August, 2001, Mrs May disputed Mr Horne’s claim that he had 10% care of Erin and Nicole. On 14 September, 2001, the decision was affirmed on the basis that, pursuant to the Family Court’s order, Mrs May had 90% care of Erin and Nicole.
On 19 October, 2001, Mrs May advised Centrelink that Mr Horne no longer had any contact with Erin and Nicole and requested that 100% FTB be paid to her. Relying on the Family Court order dated 23 September, 1999, the delegate decided that Mrs May should continue to be paid FTB in respect of each child at the rate of 90%.
On 14 December, 2001, the Family Court varied its previous order dated 23 September, 1999 (T documents, pages 94-95). It suspended its earlier order in so far as it related to Matthew and ordered that he reside with Mr Horne and that Mr Horne have responsibility for his day to day care, welfare and development. In relation to Erin and Nicole, Mr Horne was to have supervised contact with them each alternate Sunday from 1.00 pm until 3.00 pm commencing on 23 December, 2001 and a further period of supervised contact from 3.00 pm to 5.00 pm on Christmas Day. A decision was made to cease payment of FTB to Mr Horne as of 14 December, 2001 and to pay 100% FTB to Mrs May.
LEGISLATIVE BACKGROUND
Eligibility for FTB
Eligibility for FTB is the subject of s. 21 of the FA Act and it provides:
“(1) An individual is eligible for family tax benefit if:
(a)the individual has at least 1 FTB child (see section 22 and later provisions); and
(b)the individual:
(i) is an Australian resident; or
(ia)is a special category visa holder residing in Australia; or
(ii) satisfies subsection (1A); and
(c)the individual’s rate of family tax benefit, worked out under Division 1 of Part 4, is greater than nil.
When individual satisfies this subjection
(1A)An individual satisfies this subsection if the individual is the holder of a visa determined by the Minister for the purposes of subparagraph 729(2)(f)(v) of the Social Security Act 1991, and either of the following applies:
(a)the individual is in Australia; or
(b)the individual:
(i) is temporarily absent from Australia for a period not exceeding 26 weeks; and
(ii) the absence is an allowable absence in relation to special benefit within the meaning of Part 4.2 of that Act.
(2)However, the individual is not eligible for family tax benefit if another provision of this Subdivision so provides.”
Apart from the criteria relating to an FTB child, there is no question in this case that Mrs Horne satisfies the criteria in s. 21. The circumstances in which a person is an FTB child of an adult is set out in s. 22 of the FA Act. In so far as it is relevant to the facts of this case, s. 22 provides that:
“(1) …
(2)The individual is an FTB child of the adult if:
(a) the individual is aged under 18; and
(b)the adult is legally responsible (whether alone or jointly with someone else) for the day-to-day care, welfare and development of the individual; and
(c)the individual is in the adult’s care; and
(d)the individual is an Australian resident, is a special category visa holder residing in Australia or is living with the adult.
(3)The individual is an FTB child of the adult if:
(a)the individual is aged under 18; and
(b)a family law order or registered parenting plan is in force in relation to the individual; and
(c)under the order or plan, the adult is someone with whom the individual is supposed to live or someone with whom the individual is supposed to have contact; and
(d)the individual is in the adult’s care; and
(e)the individual is an Australian resident, is a special category visa holder residing in Australia or is living with the adult.
(4)The individual is an FTB child of the adult if:
(a)the individual is aged under 18; and
(b)the individual is in the adult’s care; and
(c)the individual is not in the care of anyone with the legal responsibility for the day-to-day care, welfare and development of the individual; and
(d)the individual is an Australian resident, is a special category visa holder residing in Australia or is living with the adult.
(5)…
(6)…
(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) after I December, 2001*] 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.”
* Amended by Child Support Legislation Amendment Act 2001 (“CSLA” Act) with effect from 1 December, 2001 (s. 3 and Schedules 1A, item 19)
Section 22A specifies circumstances in which, despite the provisions of s. 22¸an individual cannot be the FTB child of another but none is relevant in this case. Section 25 is also relevant for it relates to circumstances in which an individual is in a person’s care for less than 10% of a period. It was amended with effect from 1 December, 2001 by the CLSA Act (s. 3 and Schedule 1A, item 20) but, for the purposes of this case its amendments do not effect its “pattern of care” concept. Section 25 provides:
“(1) 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 in accordance with subsection 22(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)the Secretary is satisfied that the child was, or will be, in the care of that last‑mentioned individual for less than 10% of that period;
the child is to be taken, despite that subsection, not to be an FTB child of that last‑mentioned individual for any part of that period.
(2)For the purposes of this section, a child cannot be in the care of more than one of the other individuals referred to in subsection (1) on any particular day.
(3)For the purposes of this section, the Secretary must determine which of the other individuals referred to in subsection (1) has the care of the child on any given day having regard to the living arrangements of the child.”
Where an individual has been found to be the FTB child of a person and also the FTB child of another person but the two persons are not members of the same couple, s. 59 of the FA Act provides that the Secretary may determine the percentage that is to be the first person’s percentage of FTB for the individual.
Making a claim for FTB
Section 5 of the A New Tax System (Family Assistance) (Administration) Act 1999 (“FAA Act”) provides that “the only way that a person can become entitled to be paid family tax benefit is to make a claim in accordance with … Subdivision [A of Part 3]”. An individual or an approved care organisation (described in the legislation as a “claimant”) may make a claim:
“(a) for payment of family tax benefit by instalment; or
(b)for payment of 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.” (FAA Act, s. 7)
The manner in which a claim is made is the subject of s. 7(2) of the FAA Act. A claim for FTB by instalment must give details of a bank account in accordance with s. 7A (FAA Act, s. 7(2)(aa)) and a claim for FTB by instalment and a claim for payment of FTB by instalment or for a past period must give a tax file number (“TFN”) in accordance with s. 8 (FAA Act, s. 7(2)(b)). Sections 9 and 10 impose certain restrictions on claims for payment of FTB by instalment and for a past period respectively. Those limitations are not relevant in this case.
Determination of claim for FTB
The claimant’s claim for payment of FTB must be determined according to Subdivision B of Part 3 of the FAA Act (FAA Act, s. 13). The manner of determination depends upon whether the claim is for a payment of FTB by instalment or for a past period or in substitution because of the death of another. Section 16 applies to the determination of an instalment entitlement claim and provides:
“If the Secretary is satisfied that the claimant is, at the time the Secretary makes the determination on the claim, eligible for family tax benefit in accordance with Subdivision A or C of Division 1 of Part 3 of the Family Assistance Act, the Secretary must determine that he or she is entitled to be paid Family Tax Benefit for each day on which the determination is in force at the daily rate at which the Secretary considers the claimant to be eligible” (FAA Act, s. 16(2)).
Section 17 applies to the determination of a past period claim and s. 17(b) provides that if:
“the Secretary is satisfied that the claimant was eligible for family tax benefit:
(i)for the whole of the period in accordance with Subdivision A or C of Division 1 of Part 3 of the Family Assistance Act; or
(ii)for part of the period in accordance with Subdivision A of that Division and for the remainder of the period in accordance with section 31 of that Act;
the Secretary must determine that the claimant is entitled to be paid family tax benefit for the past period.”
If the Secretary is not satisfied of the matters addressed in ss. 16 and 17, he must, if the claim is for payment of FTB by instalment, determine that claimant is not entitled to be paid FTB for each day on which the determination is in force or, if the claim is for payment for a past period, determine that the claimant is not entitled to be paid FTB for that period (ss. 19(a) and (b)).
When is a determination in force?
Section 21(1) provides that, subject to qualifications appearing elsewhere in s. 21, a determination comes into force when it is made and remains in force at all times afterwards. In very broad terms, ss. 21(2) provides that a determination under ss. 16 or 19(a) that a person is not entitled to be paid FTB ceases to be in force if another determination is made on a claim for payment of FTB by instalment or on a claim for payment of FTB for a past period. Section 21(3) provides that a determination ceases to be in force if a claimant advises the Secretary that he or she wishes the determination to cease to be in force.
Payment of FTB
Section 23(1) of the FAA Act, provides that:
“Subject to this section, 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 the claimant.”
An “instalment amount” is the “amount accruing for the days in the instalment period for which an entitlement to be paid family tax benefit arose under the determination” (s. 23(2)). An “instalment period” means:
“(a) the period of 14 days beginning on such day as the Secretary considers appropriate in relation to the claimant, or class of claimants in which the claimant is included; and
(b)each successive period of 14 days.” (s. 23(2))
Section 23(6) provides that s. 23 is subject to Part 4 and ss. 225 and 226 of the FAA Act. Sections 225 and 226 permit the Commissioner of Taxation to make certain deductions in order to collect amounts that may be or become payable under the FAA Act and to set off family assistance amounts against tax liability. Part 4 is concerned with overpayments and debt recovery.
With respect to a claim for FTB for a past period, the Secretary may pay the amount to the claimant at such time and in such manner as the Secretary considers appropriate (FAA Act, s. 24(1)). Section 24(4) provides that the provisions of s. 24 are subject to those in Part 4 and ss. 225 and s. 226 of the FAA Act.
The claimant’s obligations to notify Secretary
Section 25 of the FAA Act sets out the obligations of a claimant who has become entitled to be paid FTB by instalment. If:
“… after a claimant becomes entitled to be paid family tax benefit by instalment:
(a)anything happens that causes the claimant to cease to be eligible for family tax benefit on the days for which the claimant will become entitled to be paid the benefit under the determination concerned, or to become eligible for a daily rate of family tax benefit that is less than that specified in the determination; or
(b)the claimant becomes aware that anything is likely to happen that will have that effect;
the claimant must, in the manner set out in a written notice given to the claimant under section 25A, as soon as practicable after the claimant becomes aware that the thing has happened or is likely to happen, notify the Secretary that it has happened or is likely to happen. …”
Variation of determination
Subdivision C of Part 3 provides for the variation of the Secretary’s determination. The Secretary may vary a determination of instalment and past period determinations if the claimant fails to provide a TFN in the circumstances set out in s. 27 of the FAA Act. He may vary a determination where the claimant fails to provide bank account details in the circumstances set out in s. 27A. There may also be a variation of a instalment and past period determinations where the claimant or the claimant’s partner have not lodged income tax returns when required to do so (FAA Act, s. 28). Section 28A provides for variation where the estimate of the claimant’s amount of adjusted taxable income is not regarded by the Secretary as reasonable. Section 28 provides for variation of a determination that a claimant is entitled to be paid FTB by instalment in respect of an individual, who is an FTB child, if the individual makes a claim for certain payments including a social security pension or a social security benefit (FAA Act, s. 28). Sections 29 and 30 provide for variation where there is a failure to provide certain information.
Section 31(1) is relevant in this case and it provides that:
“If:
(a)a determination is made under section 16 that a claimant is entitled to be paid family tax benefit by instalment; and
(b)after the determination is made an event occurs; and
(c)when the Secretary becomes aware of the occurrence, the Secretary considers that, if he or she were making the determination immediately after the occurrence, he or she would conclude:
(i)that the claimant was no longer eligible for family tax benefit; or
(ii)that the claimant was still so eligible but that the rate of family tax benefit should be a different rate to the rate previously determined;
the Secretary must, subject to subsection (2):
(d)if subparagraph (c)(i) applies – vary the determination so that the claimant is not entitled to be paid family tax benefit with effect from the date of occurrence; and
(e)if subparagraph (c)(ii) applies – vary the determination so as to establish the different rate with effect from the date of occurrence.”
The reference to an “occurrence” does not include the occurrence of any event:
“(a) that causes the claimant to provide a revised estimate of the claimant’s adjusted taxable income to the Secretary; or
(b)that causes the Secretary to revise an estimate of the claimant’s maintenance income;
unless:
(c)the event also affects the claimant’s eligibility for family tax benefit, or the rate of family tax benefit payable to the claimant, for a reason other than the amount of the claimant’s adjusted taxable income or maintenance income;” or
(d)the event is the claimant’s becoming, or ceasing to be, a member of a couple.” (FAA Act, s. 31(1B)).
A determination may be varied in a manner that is favourable to a person claiming or being paid FTB. Section 31(2) provides that beneficial variations have only limited effect.. They are not relevant in this case in any circumstances for Mrs May notified Centrelink of what she thought were relevant changes in her circumstances before the end of the income year in which those changes occurred. Any changes under ss. 27 to 30 are also not relevant.
Section 31A provides for a determination to be varied to reflect revised estimates of adjusted taxable income where a claimant is paid FTB by instalment and his or her rate of FTB has been worked out on the basis of an estimate of adjusted taxable income. Those provisions are not relevant in this case. Section 31B of the FAA Act provides for a variation of a determination where a claimant’s rate of FTB has been worked out on the basis of an estimate of the claimant’s maintenance income in a particular income year and the claimant is entitled to be paid by instalment. Again, those provisions are not relevant.
The Secretary’s review of decisions
Section 104 of the FAA Act sets out the decisions that the Secretary may review on his own initiative. Those decisions are all the decisions of any officer under the family assistance law except for certain determinations under ss. 51B and 54B. Determinations in relation to FTB are not excluded. Section 105 provides that a decision coming within s. 104 may be reviewed by the Secretary if “the Secretary is satisfied that there is sufficient reason to review the decision” (FAA Act, s. 105(1)(b)). There are qualifications to the circumstances in which the Secretary may conduct that review but those qualifications are not applicable in this case (FAA Act, ss. 105(2) and (3)). After reviewing the decision, the Secretary may decide to affirm the original decision, vary it or set it aside and substitute a new decision. He may also deem certain events to have occurred in certain circumstances but they are not relevant in this case (FAA Act, s. 105(5)). The date of effect of a decision made under s. 105 is the subject of s. 107 but none of its provisions is relevant in the context of this case.
Overpayments and debt recovery
If an amount has been paid by way of family assistance, which includes FTB, the amount is a debt due to the Commonwealth only to the extent that a provision of the FAA Act or the Data-matching Program (Assistance and Tax) Act 1990 expressly provides that it is (FAA Act, s. 70). Section 71 applies to family assistance other than child care benefit and family tax benefit advance and so applies to FTB. It provides:
“No entitlement to amount
(1)If:
(a)an amount has been paid to a person by way of family tax benefit, maternity allowance or maternity immunisation allowance (the assistance) in respect of a period or event; and
(b)the person was not entitled to the assistance in respect of that period or event;
the amount so paid is a debt due to the Commonwealth by the person.
Overpayment
(2)If:
(a)an amount (the received amount) has been paid to a person by way of assistance; and
(b)the received amount is greater than the amount (the correct amount) of assistance that should have been paid to the person under the family assistance law;
the difference between the received amount and the correct amount is a debt due to the Commonwealth by the person.”
CONSIDERATION
Mrs May said that she had tried to get a listing in the Family Court earlier than 14 December, 2001 but had been unsuccessful. She had consulted her lawyer earlier regarding the variation of the Contact Order but he had advised her that this was the date he had been given. Mrs May said that she did not feel that it was safe for the children to go to Mr Horne’s home. The children had run away on one occasion and had gone to Mr Horne’s home but the Family Court had returned them to her care, she said. The Family Court had ordered that the eldest child be returned to her care, she said.
Mrs Horne said that they had received a letter from Mrs May’s lawyer. They contacted him and understood that he had told Mrs May that she could not simply stop her former husband from having contact with his children but had to apply for a variation of the Contact Order. Mrs Horne and her husband could not understand why the Family Court had not been able to list the matter on an earlier date. They had contact with the children and had established a pattern of care. After the order was varied, her husband had supervised contact with the two younger children for two hours between 14 December, 2001 to 19 March, 2002. It was an interim order. On a number of occasions, Mrs Horne said, the children did not attend for the contact period. The eldest child had not returned to Mrs May’s care but had gone to live with her sister and his girlfriend, she said. Mr Horne said that he had not contested the proceedings in the Family Court as there had been too much fighting. He would explain the situation to the children at a later time.
During the hearing, reference was made to three authorities: Bertelli and Secretary, Department of Social Security (1996) 41 ALD 458 (Senior Member Gibbs), Nowicz and Secretary, Department of Family and Community Services (2001) 65 ALD 314 (Senior Member Kiosoglous) and Blight and Secretary, Department of Family and Community Services [2002] AATA 1123 (Senior Member Purcell). In each case, it was found that the children were the FTB children of more than one person. There then followed a consideration of the percentage of the FTB to which each was entitled in the context of s. 22(7) or, in the case of Bertelli, in the predecessor of s. 22(7) i.e. s. 869(1) of the Social Security Act 1991, which related to the share of family payment to which two people were entitled.
In this case, it seems to me that I should also start my consideration with s. 22(7) but, rather than focusing first on the percentage of FTB that is payable, I should focus on the “the period” during which the issue is being considered. Had Mr Horne applied for the FTB in his income tax return, it would have been clear that “the period” is the period of the preceding financial year. Mr Horne’s claim for FTB was a claim for payment by instalments which are payable in advance during the following financial year. It follows from the outline of the legislative provisions that I have set out above that the Secretary would have considered Mr Horne’s claim under s. 16.. He would have considered issues of entitlement as they existed at that time and not future possibilities. Whether or not the two approaches would lead to different results is a matter of speculation and I do not express a view on it.
Starting with the period is, however, relevant in this case for it is clear from s. 31 that, even when a determination has been made regarding entitlement to instalments, it may be varied. It may be varied if there is an occurrence that, if the Secretary had made a determination immediately after the occurrence, it would mean that a person is no longer entitled to FTB or is entitled to it at a different rate. When FTB is paid in advance by instalments, such a determination may be made at any time during the financial year to which an application for FTB relates. The period under examination, therefore, is not limited to the whole of the financial year but may relate to any portion of it. Despite that, care needs to be taken that periods are not excised from the whole and the care arrangements examined in each. That would be contrary to the express requirement in ss. 25 and 22(7) that there be an examination of the pattern of care of an individual over a period. They recognise that there may be gaps in the care and that there may be variations in the pattern of the care. The important thing is that there is a patten of care over a period. There are, however, occasions on which the variations are such that there can no longer be said to be a pattern of care or that the pattern of care has changed to the extent that it is a new pattern. In those cases, consideration must be given to whether the variation or the new pattern amounts to an occurrence that, if the Secretary had made a determination immediately after it had occurred, he would have determined that the person is no longer entitled to FTB or is entitled to it at a different rate.
Was there an occurrence in this case that did alter Mr Horne’s entitlement to FTB? Erin and Nicole had been FTB children of Mr Horne by virtue of s. 22(3) of the FA Act; they were both under the age of 18 years, there was a family law order in relation to them and under that order, Mr Horne was supposed to have contact, they were in his care and were Australian residents. On the basis of the evidence, I am satisfied that Mr Horne ceased to have contact with the children, Erin and Nicole, from 19 October, 2001 until 23 December, 2001, which was the first day of contact under the varied Family Court order. Contact from 23 December, 2001 became supervised contact. I will not consider whether supervised contact can amount to “care’ within the meaning of s. 22 of the FA Act for Mr Horne has not sought review of the delegate’s determination to cease to pay him FTB after 14 December, 2001. What I am satisfied of is that Mr Horne did not have care of Erin or Nicole from 19 October, 2001 to 13 December, 2001. In some contexts, such a span of time might not be regarded as relevant when assessing whether a person has care of an individual but, in the context in which it occurred, it seems to me that it is significant. It seems to me that neither Erin nor Nicole could be said to be in Mr Horne’s care, as that term is used in s. 22(3)(d) during that time.
Once it is decided that Erin and Nicole were not in Mr Horne’s care at that time, it follows that neither can be his FTB child in that period. That is so even though there was a Family Court order to the effect that he was entitled to have contact with them and that contact would have led to a conclusion that they were in his care. In adopting this interpretation, I do not wish to be regarded as countenancing a breach of the Family Court’s order. Such breaches should not be countenanced and such a consideration remains relevant in the exercise of the Secretary’s discretion to determine the percentage of FTB to which a person is entitled where an individual is the FTB child of two persons. Certainly, it is easy to envisage situations in which a person manipulates circumstances to deny another person contact to his or her child. In those circumstances, my interpretation of s. 22(3) and, indeed, the other provisions of s. 22, would mean that he or she would manipulate circumstances to deny a person of his or her entitlement to FTB. The FA Act, however, is not the arbiter of who should and who should not have contact with their children and nor is it a vehicle for ensuring compliance with Family Court orders. It way intended to improve the assistance that families can get through the tax and social security systems (Second Reading Speech by the Treasurer, 31 March, 1999, House of Representatives, page 4889).
35. The period from 1 July, 2001 to 18 October, 2001 raises different issues. In that period, I find that Mr Horne had contact with Erin and Nicole in accordance with the Family Court order and had care of them for parts of the period. As the other requirements of s. 22(3) were met in that period, they were his FTB children. At the same time, there is no issue that they were also FTB children of Mrs May. That then raises s. 59(1) and an assessment of the percentage that is to be Mr Horne’s percentage of the FTB for this period.
The Act does not set out how that assessment is to be undertaken but there is guidance to be found in the cases to which Ms Pugsley referred and in the Family Assistance Guide as well as in s. 22(7). Section 22(7) is relevant because it draws attention to the whole of the period and to the pattern of care in that period. It does not necessarily draw attention to individual days in a particular period once a pattern has been established even though there may be occasions when that pattern is broken by a change in the contact. This is reflected in the Family Assistance Guide, which encourages the percentage to be agreed between all parties if at all possible but which focuses on the pattern of care where it cannot:
“Where the carers do not agree on the care arrangements, the FAO decision maker must determine the care percentage to be applied based on the available evidence of what is the actual pattern of care.
This percentage is applied when calculating the standard rate (1.1.S.103) of FTB Part A and Part B each person is eligible to receive. (2.1.1.40)
2.1.1.45 Establishing a Pattern of Care
Summary
If the care percentage or care arrangements are not agreed on between the carers, it is necessary to establish a pattern of care (1.1.P.70) in order to make a shared care determination for FTB. A pattern of care is established by using either the number of nights in care (1.1.N.15) or hours of care for each FTB child. The percentage of care for each FTB child is then calculated and applied to the standard rate (1.1.S.103) of FTB Part A and Part B.”
In this context, the order of the Family Court in force during the period is relevant in determining the pattern of care but it is only part of it. As Senior Member Kiosoglous said in Nowicz:
“… sub-section 22(7) equally does not limit the Secretary’s discretion to only consider care arrangements as stipulated in a Court order or parenting plan. A common sense approach necessarily means that the Secretary, and therefore this Tribunal, considers the relevant documentation, and the evidence of both parties as to what has been happening in the past, and what is intended to happen in the future, if such differs from the documentary evidence. Based upon such consideration, the Secretary is then in a position to determine what pattern of care has existed, or will exist in relation to the relevant FTB child.
16. Once established, it is appropriate that variation only occur where there is to be a significant departure in an established pattern of care. This may occur, for example, when contact weekends are changed from fortnightly to monthly. It would not occur when the odd weekend contact visit was missed, or a child stayed for one particular weekend in addition to the contact weekend in a given fortnight during a particular assessment period. The Tribunal would also note that the legislation is clearly not concerned with patterns of expenditure on the children, and is based purely on the time spent in each of the carers’ care. ” (page 318)
If regard is had only to the Family Court order, Erin and Nicole were in Mr Horne’s care for approximately 14% of the period if it were considered that Mr Horne had their care for the whole of each alternate weekend. He did not, though, for his period of care began at 10.00 am on Saturday and concluded at 5.00 pm on Sunday. This was the arrangement for other periods. In view of that, and in the absence of any other evidence suggesting that the period of care was different during this period prior to 19 October, 2001, 10% seems to be a more accurate assessment of the time for which Erin and Nicole were in Mr Horne’s care in the period. It follows that, pursuant to s. 59(1), the percentage that is Mr Horne’s percentage of FTB for the period 1 July, 2001 to 18 October, 2001 is 10% and the percentage that is Mrs May’s is 90%. This was the assessment made by the SSAT and by the delegate.
It follows that, for the reasons I have given, I:
1.set aside the decision of the Social Security Appeals Tribunal dated 14 August, 2002; and
2.substitute a decision that:
(1)the decision of a delegate of the respondent dated 28 December, 2001 and affirmed by an Authorised Review Officer on 24 May, 2002 is varied by:
(a) setting aside that part that rejected the applicant’s claim for FTB at the rate of 100% for the period from 19 October, 2001 to 13 December, 2001; and
(b) substituting a decision that the applicant is entitled to FTB at the rate of 100% in respect of the FTB children, Erin and Nicole, during the period from 19 October, 2001 to 13 December, 2001; and
(2)the decision is otherwise affirmed.
I certify that the thirty-nine preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie
Signed: ................................................................
P. Paczkowski Associate
Date/s of Hearing 2 June, 2003
Date of Decision 27 November, 2003
For the Applicant self representedFor the Respondent
Ms A. Pugsley, Advocate
The Service Recovery Team Centrelink
For the Party Joined self represented with Mrs P. Horne
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