McManus and Secretary, Department of Social Services and Anor
[2014] AATA 206
•10 April 2014
[2014] AATA 206
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2013/3183
Re
John McManus
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
And
Bridget Pretorious
OTHER PARTY
DECISION
Tribunal Ms N Isenberg, Senior Member
Date 10 April 2014 Place Belmont The Tribunal sets aside the decision under review and finds that the applicant was entitled to FTB for the period 8 January 2012 to 7 January 2013.
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Ms N Isenberg, Senior Member
CATCHWORDS
SOCIAL SECURITY – Family Tax Benefit – percentage of care – shared care – care period – change in care - decision under review set aside
LEGISLATION
A New Tax System (Family Assistance) Act 1999 ss 3, 25, 35B, 35P, 35Q
CASES
Re Drake and Minister for Immigration and Ethnic Affairs (1979) AATA 17
Gillson and Secretary, Department of Families, Housing, Community Services & Indigenous Affairs [2011] AATA 73
SECONDARY MATERIALS
Family Assistance Guide
REASONS FOR DECISION
Ms N Isenberg, Senior Member
10 April 2014
BACKGROUND
The applicant, John McManus, and the other party, Bridget Pretorious, are the parents of two children. The couple separated and their arrangements with respect to the children were determined by Family Court Orders dated 8 July 2010.
Ms Pretorious appears to have applied for and received Family Tax Benefit (FTB) in respect of the children and the applicant also received some FTB during 2010.
In May 2012, the applicant lodged a claim for FTB. Centrelink determined that he had 27 per cent care of the children. His claim for FTB was rejected as he did not reach the 35 per cent eligibility threshold (discussed below). Centrelink re-assessed his care for the children and determined that his level of care was 29 per cent. As a result his claim for FTB was again rejected. That decision was affirmed by the authorized review officer and by the Social Security Appeals Tribunal (SSAT).
The applicant now seeks review by this Tribunal.
LEGISLATIVE SCHEME
The legislation relevant to this application for review is the A New Tax System (Family Assistance) Act 1999 ('the FA Act').
If an individual's percentage of care for a child during a care period is less than 35 per cent, the child is taken not to be a child of that individual for FTB purposes for any part of the period: s 25 of the FA Act. Where the pattern of care for an FTB child for a period shows that two parties share qualification for FTB for that child, then the decision-maker is required to determine the percentage of FTB payable to each party. The decision-maker must weigh the available evidence in deciding whether there is a pattern of care and decide the appropriate shared care percentages arising from that pattern of care.
Section 35P of the FA Act states that a care percentage must be revoked if a new percentage of care is determined under ss 35A or 35B, and the new percentage would be in a different range as set out in the provision. Section 35Q of the FA Act also provides discretion to revoke a care percentage.
Where a child is in an adult's care, a percentage of care is determined under s 35B of the FA Act on the basis of the actual care the person 'has had, or will have during the care period'. The term 'care period' is defined in s 3 of the FA Act as having the meaning given by s 35B(1)(a) or (2)(b) of the FA Act. It requires the Tribunal to consider the pattern of care for the child over a period in which the child was, or will be, an FTB child of two people.
The FA Act does not specify when a care period starts and for how long it continues.
Centrelink relies on the Family Assistance Guide (the ‘Policy') to assist in its decision-making about entitlements to FTB. There are provisions for determining, for example, the actual percentage of care, usually relying upon the number of nights an FBT child may be in the care of one or other of the carers: Instruction 2.1.1.45. These provisions are especially important where carers do not agree as to the pattern of care.
Instruction 2.1.1.50 of the Policy relevantly states as follows:
Step 1 - Establish the pattern of care
The pattern of care to be used in the shared care determination is either the pattern agreed to by all carers of the child or, if there is no such agreement, the pattern of care as established by the FAO decision maker for the assessment period. Depending on the care arrangements for the child, there may be more than one assessment period in an income year...
Instruction 1.1.C.100 of the Policy relevantly states as follows:
1.1.C.100 Care period for FTB Assessments
Definition
The term 'care period' is used in relation to assessing shared care for the purposes of FTB.
The care period for working out the percentage of care provided by an adult:
·begins on the day on which the care of a child starts to be shared between 2 or more adults, or the day on which the pattern of care (2.1.1.45) changes, and
·ends when there is a subsequent change in care.
Explanation: A care period of 12 months from the commencement of the care arrangements will generally be used where the care arrangements are ongoing. The same care arrangements will be assumed to apply for subsequent 12 month periods, unless otherwise advised. If there is no agreed ongoing pattern of care and the care arrangements only apply to a period shorter than 12 months, a one-off shorter care period may be determined.
CONSIDERATION
At the hearing in this matter the applicant said he only sought FTB for the 12 month period 8 January 2012 to 8 (sic) January 2013. He explained that, because of his salary, he is no longer eligible for FTB, although was eligible during that period.
He claimed that 8 January 2012 was an appropriate date from which to re-calculate his entitlement to FTB, for the reasons discussed below. Both Ms Pretorious and the Centrelink advocate agreed that, if 8 January 2012 was found to be an appropriate date from which to re-calculate his entitlement, then it was conceded that his percentage of care was at least 35 per cent for the period sought.
However Ms Pretorious and Centrelink considered that it was not appropriate to regard 8 January 2012 as an appropriate date. If there were a change in circumstances such as to give rise to a re-calculation, then it was 27 January 2012, when the younger child started school. The applicant conceded that if calculations were made from that date, he would not achieve 35 per cent of care in the remainder of the claimed period.
The parties referred to the Family Court Orders. I do not consider it appropriate to refer to them in any detail. Suffice to say, though, that they are very detailed and clearly have been formulated meticulously. During the relevant period the parties agreed that they had been followed scrupulously.
The parties agreed that the Orders had the effect that, in alternate years, the applicant had the children more often than in the other year. Another feature was that he had the children in the second half of the school holidays. The applicant said he had selected 8 January 2012 as a reasonable start date for re-calculation because that was the commencement of his half of the summer holidays.
Ms Pretorious contended that there was no ‘change’ to the arrangements on 8 January 2012, and that the applicant’s having the children for the second half of the summer holidays was merely ‘business as usual’ in accordance with the Orders.
Centrelink’s attitude was that it was misleading to re-calculate the entitlement 12 months about. It asserted that it was ‘more accurate’ to look at the two year cycle anticipated by the Orders. However the representative for Centrelink could point to nothing in the legislation to that effect. Centrelink noted that the legislation enables a care percentage to be calculated when there has been a change in the arrangements and contended that the Orders contain a number of provisions which have come into effect as various milestones are reached, such as when the younger child started school.
Centrelink relied on the Policy and submitted that policy guidelines are to be applied unless there are cogent reasons in a particular case for not doing so: Re Drake and Minister for Immigration and Ethnic Affairs (1979) AATA 179. It also relied on Gillson and Secretary, Department of Families, Housing, Community Services & Indigenous Affairs [2011] AATA 73 where the Tribunal stated that it is appropriate to have regard to the Policy in contested cases of shared care. That case however related to the tensions between the formula for entitlement to FTB on the basis of "hours in care", rather than on the basis of "nights in care" as set out in the Policy. However, even in that case, the Tribunal accepted that in some cases it may be appropriate to assess care arrangements differently than anticipated by the Policy.
I consider that there is nothing inconsistent with the Policy in finding that the care arrangements changed from 8 January 2012 for a year. There was no dispute that the previous calculation accurately reflected the arrangements prior to 8 January 2012. However, there is nothing in the legislation, or the Policy for that matter, that prevents re-calculation from 8 January 2012 when, for the following 12 months, the applicant’s care of his children increased to 35 per cent. It was unreasonable for Centrelink to aggregate the care cycle over two years. To do so operated unfairly to the applicant during a period when he had 35 per cent care of the children. The Orders notified Centrelink that the care of the children that was actually taking place did not correspond with the applicant’s existing percentage of care for the children: s 35Q of the FA Act.
DECISION
The Tribunal sets aside the decision under review and finds that the applicant was entitled to FTB for the period 8 January 2012 to 7 January 2013, he having 35 per cent care of the children during that period.
I certify that the preceding 22 (twenty-two) paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Senior Member
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Associate
Dated 10 April 2014
Date of hearing 6 March 2014 Applicant In person Solicitors for the Respondent Department of Human Services Other Party In person
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