McDonald and Secretary, Department of Family and Community Services

[2005] AATA 1278

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 1278

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No   Q2005/237

GENERAL ADMINISTRATIVE DIVISION		)
Re		JULIE McDONALD

Applicant

And SECRETARY, DEPARTMENT
OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Ms M J Carstairs, Member

Date17 November 2005

PlaceTownsville

Decision For reasons given orally at the hearing the Tribunal sets aside the decision under review and substitutes the decision that Ms McDonald was entitled to payment of Family Tax Benefit Part A at the higher rate from 4 December 2002 to 23 December 2002 and 5 February 2003 to 4 February 2004.

.................[Sgd]................................
   M J Carstairs

Member  

CATCHWORDS

SOCIAL SECURITY – pensions and entitlements – family tax benefit Part A – higher and lower rates of Part A payment – decision set aside and substituted.

A New Tax System (Family Assistance) Act 1999
A New Tax System (Family Assistance) (Administration) Act 1999

Thomas and Secretary, Department of Family and Community Services [2004] AATA 221
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Re Frost and Secretary, Department of Social Security (AATA 10369; 17 August 1995)

WRITTEN REASONS FOR ORAL DECISION

21 December 2005 Ms M J Carstairs, Member

1.      Julie McDonald has three children, nine year old twin boys, Logan and Riley McDonald, and a daughter, Paris Delacour born on 6 November 2002.  On 7 July 2002 Paris’ father, Gavin Delacour, was imprisoned for a term of 9 years. 

2.      Ms McDonald claimed family tax benefit (FTB) after Paris was born.  She was already receiving this payment for her sons.  FTB has two parts: Part A and Part B. There are two rates at which FTB Part A can be paid and one factor affecting which rate applies is whether the claimant has taken action for maintenance from the other parent.  The legislation anticipates that support for the upbringing of children will be pursued where the relationship between the parents of children may have broken down.  There are good public policy reasons for this.

3.      Ms McDonald’s FTB Part A component for Paris has been paid at both the higher and the lower rate at different times.  Centrelink now pays her the higher rate because she took maintenance action through the Child Support Agency.  The Child Support Agency assessed Gavin Delacour as liable to pay $1.26 per week for Paris.  Ms McDonald says she was always entitled to payment at the higher rate of the FTB Part A payment.

4.      Ms McDonald seeks review for the periods when she was not paid the higher  rate of FTB Part A, that is:

·4 December 2002 to 23 December 2002; and

·4 February 2003 to 5 February 2004

5.      The respondent says she was not entitled during those times, effectively because she had not claimed maintenance, relying on Clause 10 of Part 2 of Schedule 1 of the New Tax System (Family Assistance) Act 1999 (the Act) which provides as follows:

The FTB child rate for an FTB child of an individual is the base FTB child rate (see clause 8) if:

(a)the individual or the individual’s partner is entitled to claim or apply for maintenance for the child; and

(b)the Secretary considers that it is reasonable for the individual or partner to take action to obtain maintenance; and

(c)the individual or partner does not take action that the Secretary considers reasonable to obtain maintenance.

ISSUES

6.      There are two issues that arise in this matter.  The first concerns whether Ms McDonald is within the time limits for seeking review of the decisions about her rate of payment.  The second issue concerns the application of Clause 10: whether it was reasonable for her to take action to obtain maintenance for Paris; and whether she took action that was reasonable in the circumstances.

BACKGROUND

7.      The documentary records (T-documents) showed that when Ms McDonald first claimed FTB her Part A payment was paid briefly at the higher rate (6 November 2002 to 4 December 2002) and then again between 24 December 2002 and 4 February 2003).  She was unaware that the rate changed at these times.  She believed that she was being paid at the higher rate and was only pressed to check the rate when Mr Delacour later insisted, when she was visiting him at the prison, that the partners of other prison inmates with three children were receiving a higher fortnightly amount than she was. 

8.      These changes in the rates of FTB Part A were reflected in the computer records produced at T42 and summarised at page 111. 

Event Date    Maintenance Action  Mat Met?     

26 May 2004   CAM    CSA assessment made  Yes

4 Feb 2003     NMA    No maintenance action  No

24 Dec 2002    APP     Applied for CSA assessment           Yes

4 Dec 2002     NMA    No maintenance action  No

6 Nov 2002     DMA    Deciding maintenance action           Yes

9.      It can be seen here that there were two earlier occasions prior to when Ms McDonald had a completed child support assessment for maintenance of $1.26 per week where Centrelink decided that she was eligible for the higher rate.  I note that to reach that conclusion Centrelink must have been satisfied about the matters addressed in Clause 10.

10.     Ms Heffner told me that the justification for the first higher rate payment was that there is a period of grace immediately after the birth of a child and this extended until 4 December 2002 (T11) when a letter was sent to Ms McDonald at 65 Peel Street, Garbutt telling her that if you take reasonable action to obtain child support…you may be eligible to receive more FTB Part A.

11.     I also noted that in her claim for FTB received at Centrelink on 11 November 2002 Ms McDonald had indicated she was then living with friends and awaiting public housing.  Ms McDonald told me at the hearing that she did not receive the letters sent to Peel Street.  It was a temporary address where she was staying with friends until she secured her own accommodation in late December 2002.  The letter advising about the grant of her payment dated 28 November 2002 (T10) was sent to 65 Peel Street, Garbutt. On the same day and to the same address (T9)  Centrelink sent a letter stating:

It may be possible for you to receive more assistance through the child support scheme.

To receive more than the base rate of Family Tax Benefit Part A you must take reasonable steps to get child support from Morgan’s father.  This action must be taken within 28 days of Morgan’s date of birth, or the date you separated from Morgan’s other parent, whichever is the later date, or the date Morgan entered your care.

As you are receiving Family Tax Benefit Part A you need to fill in the enclosed Application for Child Support Assessment form and return it to us as soon as possible so we can make sure you are being paid correctly.

12.     Unfortunately, because it was sent to Peel St, she did not receive that letter with the form for her to fill out.   On 4 December 2002 (T11) a further letter, also sent to Peel St, included the advice that she would be paid from 26 December 2002 the amount of $294.19 for FTB Part A but that :

If you take reasonable action to obtain child support for Morgan you may be eligible to receive more Family Tax Benefit Part A.

13.     The next letter that issued to Ms McDonald dated 24 December 2002 (T15) was sent to an address at Cassowary Court where Ms McDonald moved in December 2002 and still resides.  This letter recorded that she would be paid FTB Part A at $294.14 per fortnight payable on 30 December 2002 but that from 9 January 2003 she would be paid $380.10 per fortnight. 

14.     Ms McDonald said that she did receive the letters sent to Cassowary Court, including one dated 4 February 2003 advising her that her next rate of payment for Paris would be the reduced one of $294.14, but she said she did not take particular note of the reference to action to obtain child support as she believed that the information she obtained at a face-to-face interview she attended at Centrelink on 24 December 2002 superseded any other general information in letters.

TIME LIMITS FOR SEEKING REVIEW

15.     The respondent has identified the two periods above as the periods for which Ms McDonald seeks review of the decision to pay her at the lower rate of FTB Part A.  The legislation provides that a person can seek review under s109A of the A New Tax System (Family Assistance)(Administration Act) 1999 (the Administration Act) within 52 weeks of being notified of the decision concerned:  s109D(1).  Both of these periods where she was paid the lower rate followed letters when she was advised about the rate she was going to be paid.  The first letter that is relevant is one dated 28 November 2002 (T10) in which she was told that she would be paid $190.05 per fortnight from 12 December 2002.    The second relevant piece of correspondence was the letter dated 4 February 2003 (T16).

16.     The Social Security Appeals Tribunal (SSAT) were satisfied that the first time when Ms McDonald sought review at all was on 18 December 2003 (T18) when she queried the rate of FTB Part A that she was being paid.  However, Ms Heffner submitted that, taking the approach applied by the Tribunal in the decision of Re Frost and Secretary, Department of Social Security(AATA 10369; 17 August 1995) the Tribunal is able to review both periods.   I accept that submission.

WHETHER IT WAS REASONABLE FOR MS McDONALD TO TAKE ACTION TO OBTAIN MAINTENANCE FOR PARIS

17.     Ms McDonald signed a statement dated 26 October 2004 (exhibit A1) in which she referred to an interview that had taken place at the Centrelink office shortly after Paris was born.  As there was only one face-to-face interview that took place, I infer that she is referring in her statement to an interview that took place on 24 December 2002 (T14).  Ms McDonald stated that at the interview a Centrelink officer asked for proof of paternity and this was provided and she then explained to the Centrelink officer about Mr Delacour’s term of imprisonment.  Ms McDonald said that it was then explained to her that in these circumstances she would receive full FTB and nothing further was required of her as checks would be done with taxation records to establish that the father was earning no income. 

18.     In her statement (exhibit A1) Ms McDonald also referred to her attempts to lodge a maintenance claim with the Child Support Agency and delays she experienced in obtaining the statutory declaration about paternity through the prison system.  She also said that the child support assessment resulted in a payment of $1.26 per week but that informally she had received a total of $160 from Gavin Delacour before that child support determination was made.   Ms McDonald told me that she has now received a total of about $300 from Mr Delacour for Paris.  She said that she has receipts for all amounts paid to her by Mr Delacour as she must attend the prison personally to collect then and must sign for the receipt of any payments from the prison. 

19.     I accept Ms McDonald’s evidence about the discussions that she had with the Centrelink officer that took place on 24 December 2002.  The record of the interview was as follows:

Customer attended RFG review appointment today.  No change in customer circumstances.  Information re maintenance – in process of getting birth certificate (father in prison)

20.     The officer no longer works at Centrelink, so I did not have the benefit of her recollections of what was discussed in the interview.  I cannot make firm findings on what took place, or what exactly was said. I do not suggest that Ms McDonald was given incorrect information at the interview but clearly a number of matters particular to Ms McDonald’s circumstances were discussed.  There are a number of possibilities as a result of these discussions, including that Ms McDonald may have misunderstood what the officer was attempting to tell her on a range of matters.  Nevertheless, Ms McDonald had a good recollection of the interview and went away with information, including the information that I accept she obtained from the Centrelink officer on that occasion, that satisfied her that the Child Support Agency does not collect from prison inmates;, that all she was required to do was obtain a statutory declaration about paternity;, and that she was now going to be paid the full rate of FTB Part A.   The computer records immediately after that interview showed that that officer was satisfied that Ms McDonald was entitled to be paid at the higher rate (see  paragraph 8) and a letter was sent the same day (T15) informing Ms McDonald of this.

21.     On 4 February 2003 (T16)  Ms McDonald was notified that there would be a payment at the rate of $373.96 payable on 4 February 2003 and then from 20 February 2003 she would be paid $294.14.  This letter, as referred to above, had the additional information that she would be eligible to receive more FTB Part A if she took reasonable action to obtain child support.

22.     Taking into account the evidence that is now available about Ms McDonald’s circumstances I consider that the discretion to pay at the higher rate of FTB Part A should be exercised.  It seems to me that there is a reason that there are three questions to be addressed under Clause 10 and effect should be given to considering all the sub-clauses when exercising the discretion.   I note also that the sub-clauses are expressed conjunctively, being  connected by the word and.  Each clause should be given its operative effect, bearing in mind the purpose of the legislation.

23.     I also took into account that the Act does allow for an extensive period in which a person can seek review.  This necessarily places the Tribunal in the position of being able to look back over a period of 12 months and if satisfied that it is desirable to do so, correct the decision over that period.  

24.     When matters are on review by this Tribunal it is well established that the Tribunal is looking at the decision under review but unless the statute indicates otherwise it can take into account matters and evidence up to the date of hearing.  That is, I am not simply limited to the question of what was the correct and preferable decision at the time the decision was made, on the information that was before the decision-maker at that time.  I can take into account the additional information that we now have and it seems to me very important in considering Ms McDonald’s entitlement to the higher rate to take into account that:

·     Ms McDonald received information from Centrelink that in her circumstances she was not required to do more to seek maintenance because her husband was in jail; 

·     When assessed by the Child Support Agency, Mr Delacour was assessed at the very minimal liability  of $1.26 per week;

·     Ms McDonald received payments from Mr Delacour for Paris and these were roughly equal to what Mr Delacour later was assessed by the Child Support Agency as required to pay; and

·     There seems to be no question that had Ms McDonald applied through the Child Support Agency earlier, she was entitled to the higher rate of FTB Part A.

25.     The term reasonable used in Clause 10 imports that there is a judgment that needs to be made and that the factors of a particular case must be weighed up and balanced.  Clearly to be taken into account, as well as the person’s particular circumstances, are policy matters and this has been emphasised in Tribunal decisions including Thomas and Secretary, Department of Family and Community Services [2004] AATA 221. The legislation is drafted to ensure that people do pursue maintenance before drawing upon the public purse but it seems to me that if this were simply a categorical requirement, Clause 10 would have that as the sole test, rather than address the questions of reasonableness as it does.

26.     I note also that the definition of maintenance in the Act is a wide one that includes child support but is not limited to child support (elsewhere defined in the Act).  As pointed out in Thomas there is no requirement in the Act that maintenance must be assessed under the Child Support Act and the Tribunal in Thomas pointed out that it would have been quite easy to make that the mandatory requirement.  As stated in Thomas (at [34]):

Clearly there is great diversity in the circumstances of FTB claimants that may arise for consideration under the Family Assistance Act and flexibility may be required to respond to the specific circumstances of a particular case in order to ensure a fair and just outcome.

27.     I was satisfied that the amounts that Ms McDonald received from Mr Delacour were maintenance within the meaning of the legislation, even though they did not come through a Child Support Agency assessment, which occurred later.

28.     I was also referred to Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634. This is an important case to consider where, as here, the question is the impact of policy considerations on the exercise of discretions. That case emphasised the importance of the Tribunal following policy but also pointed out that it should not be applied slavishly where it would work an injustice in a particular case…for consistency is not preferable to justice.  Drake stated that the Tribunal will follow policy unless its application tends to produce an unjust decision in the circumstances of the particular case.  It was a case dealing with Ministerial Policy, where this had been through parliamentary scrutiny.  None of the departmental extracts to which I was referred came within that category of policy.  Furthermore much of the policy extracts to which I was referred dealt with matters arising under Clause 10(c) only.

29.     Taking into account the evidence as it now stands, it seems to me that the correct and preferable decision is that Ms McDonald should be paid the arrears at the higher rate in the two periods for which she seeks review because the base rate as provided for in Clause 10 was not the correct rate for her given the circumstances.  For the lower rate to be correct all parts of clause 10 had to be satisfied.   I accept that she was an individual entitled to claim or apply for maintenance: Clause 10(a).  I accept that she or her partner did not take action to obtain maintenance: Clause 10(c).  However I was not satisfied that it was reasonable for her to take action because she believed after the discussions with the Centrelink officer on 24 December 2002 that she did not have to do so.  She believed that in her particular circumstances it was not necessary for her to do so.   Those circumstances were compelling, and include the length of time for which Mr Delacour had been imprisoned and the unlikelihood that maintenance would be forthcoming from him. I accept her evidence that these were matters that she discussed with the Centrelink officer in the interview.  The low rate at which Mr Delacour’s child support obligation subsequently was assessed confirms that in all the circumstances  it was not reasonable for the individual...to take action to obtain maintenance: clause 10(b).  It is also relevant that maintenance was in fact paid.

30.     As stated previously, for Ms McDonald to be paid at the lower rate of FTB Part A all parts of Clause 10 needed to be met.  Putting all these factors together it seems to me that the preferable decision is that Ms McDonald be paid at the higher rate of FTB Part A because I cannot be satisfied that it was reasonable, given what we know now of all the circumstances, that she take action to obtain maintenance (Clause 10(b)), a matter of which I needed to be satisfied if she were to be paid the base rate of FTB Part A.

31.     For these reasons I set aside the decision under review.

DECISION

32.     For reasons given orally at the hearing the Tribunal sets aside the decision under review and substitutes the decision that Ms McDonald was entitled to payment of Family Tax Benefit Part A at the higher rate from 4 December 2002 to 23 December 2002 and 5 February 2003 to 4 February 2004.

I certify that the 32 preceding paragraphs are a true copy of the reasons for the decision herein of Ms M J Carstairs, Member

Signed:         Jeff Mills
  Legal Research Officer

Date/s of Hearing  17 November 2005 (Townsville)
Date of Decision  17 November 2005 (Townsville)
Date of Request for Written Reasons       21 November 2005
Date of Written Reasons  21 December 2005
The Applicant was unrepresented.
For the Respondent  Ms C Heffner, Departmental Advocate