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

[2007] AATA 1171

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1171

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2006/747

GENERAL ADMINISTRATIVE  DIVISION		)
Re		ROSS MEYERS

Applicant

And SECRETARY, DEPARTMENT OF FAMILY, COMMUNITY SERVICES & INDIGENOUS AFFAIRS

Respondent

And

LISA KELLY

Third Party

DECISION

Tribunal Senior Member, Mrs Josephine Kelly  

Date 27 March 2007

PlaceSydney

Decision The reviewable decision is affirmed.   

.....................[sgd].........................

Senior Member
  Mrs Josephine Kelly

CATCHWORDS

SOCIAL SECURITY – debts raised in relation to Family Tax Benefit – issue of percentage of care of children by each parent – reviewable decision affirmed.

LEGISLATION

A New Tax System (Family Assistance) Act 1999

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

REASONS FOR DECISION

Senior Member, Mrs Josephine Kelly   

INTRODUCTION

1.           Mr Ross Meyers and Ms Lisa Kelly separated in February 2002.  They have three sons who were born in 1991, 1992 and 1996.  They are both qualified accountants and ran an accountancy business together.  Mr Meyers has sought review of the decision made by the Social Security Appeals Tribunal (“SSAT”) on 19 May 2006 determining the percentage of care provided to the children by Ms Kelly and Mr Meyers, and hence their respective entitlements to Family Tax Benefit (FTB) during the tax years ending 30 June 2003 and 30 June 2004, referred to in this decision as the 2003 and 2004 tax years respectively. 

Issue

2.           The issue is therefore the percentage of level of care of the children provided by Mr Meyers and Ms Kelly during those tax years.  

3.           The year ending 30 June 2005 was also the subject of the SSAT’s decision, however both Mr Meyers and Ms Kelly accept the SSAT’s decision in respect of that year and therefore I do not need address it.

4.           There is no legal issue in this case.  However, I note that the relevant legislation is the A New Tax System (Family Assistance) Act 1999 and the A New Tax System (Family Assistance) (Administration) Act 1999.

BACKGROUND

5.           In order to assess the conflicting evidence given by Ms Kelly and Mr Meyers, it is useful to set out the following chronology which is established by contemporaneous documents or is not in dispute. 

6.             In January 2002, before the separation in February, a property order was made in the Family Court.

7.           From 1 July 2002 Ms Kelly received 100% of FTB for the three children.  She claimed FTB through her tax returns for the tax years 2003 and 2004.

8.           In March 2004 Mr Meyers and Ms Kelly were divorced.

9.           There is in evidence a letter dated 10 June 2004 from Mr Meyers to Ms Kelly claiming that she owed $96,973.29 to the family trust (part Exhibit A5).

10.          In July 2004 Ms Kelly requested the Child Support Agency (“CSA”) to collect child support that should have been paid for the period 15 April 2004 to 14 July 2004, and Mr Meyers lodged an objection.

11.          On 20 September 2004 the CSA wrote to Ms Kelly noting her request that she take over the collection of child support from Mr Meyers which was to begin on 20 September 2004 .

12.          Also in September 2004, Mr Meyers claimed FTB through the Australian Taxation Office (‘ATO’) for the 2003 tax year.  It was rejected because another person was receiving the benefit (Exhibit R2 and T15).

13.          During the second half of 2004 or the beginning of 2005 Mr Meyers began proceedings in which the company sued Ms Kelly for monies said to be owing, in the order of about $90,000.

14.          On 27 July 2005 orders were made by consent in the Family Court in respect of property and parenting arrangements (T4).

15.           On 26 August 2005 Mr Meyers’ claim for FBT for 2003 was received by Centrelink from the ATO.

16.          On 9 September 2005 the following apparently occurred:

-Mr Meyers requested Centrelink to review the rejection of his claim for the 2003 tax year.

-He also claimed FTB for the 2004 and 2005 tax years, and ongoing (T7).  A Centrelink record noted that he provided “interim court orders” in support of his claim. 

17.           On 10 October 2005, as a matter of procedure following Mr Meyers’ claim (for 2004 and 2005), a letter was sent to Ms Kelly asking her about the shared care arrangements for the children (Annexure A to Exhibit R1). As she did not respond, Mr Meyers’ claims were processed between 7 and 18 November 2005 (T12-17) on the basis of the information he had provided.          

18.          On 8 November a calculation was done and assessments made of 11% for the 2004 tax year, 27% for the period 1 July 2004 to 6 March 2005, and 28% from 7 March 2005 to 26 July 2005 based on “an agreement between the parties as a private arrangement” and thereafter in accordance with the current Family Court order (T8).   

19.          On 9 November 2005 Mr Meyers contacted Centrelink about a change in care arrangements.  A further assessment was done based on the court order lodged on 9 September 2005 showing that he had the children every second weekend from Friday to Sunday, every Monday night and no more than half of all school holidays (T13)  Mr Meyers was granted 33% from 27 July 2005 (T13).

20.            On 15 November 2005 a letter was sent to Mr Meyers advising him of his FTB entitlement for the 2004 tax year (T16).  On the same day he contacted Centrelink querying that assessment.  He told the officer that he had care from 1 July 2003 and should be assessed from that date (T14). 

21.          Also on 15 November 2005, Ms Kelly contacted Centrelink questioning the change in her FTB payments.  She said that she did not receive the letter dated 10 October 2005 asking about the shared care arrangements and told the Centrelink officer that her ex partner steals her Centrelink mail from her box (Annexure B to Exhibit R1).

22.          On 18 November 2005 FTB was granted to Mr Meyers for the 2003 tax year.  His share of care was calculated as 22% based on his statements that he had the children for half of the school holidays and each alternate weekend.  He had also wanted Monday and Tuesday nights included but as I understand the document they were not (T15).  He was notified of his entitlement on the same date (T17).

23.          In summary, Mr Meyers’ percentage shared care of the FTB was assessed as:

-2003 tax year               =  22% (T15)

-2004 tax year             =  22% (rounded up) (T8)

-2005 tax year           =  27% from 1 July 2004 until 6 March 2005 and 28% from 7 March 2005 and ongoing (T8)

24.          As a consequence of Mr Meyers’ successful claim, debts were raised against Ms Kelly because she had been paid the full amount of FTB. 

25.          At Ms Kelly’s request, the decision as to the percentage of FTB entitlements and the resultant debts were reviewed and affirmed by an Authorised Review Officer on 9 December 2005 (T18).  Ms Kelly then sought review by the SSAT.   

26.          On 19 May 2006, the SSAT determined the entitlements of Mr Meyers and Ms Kelly.  It is that decision that Mr Meyers wishes to have reviewed.  The SSAT determined Mr Meyers’ percentage of care as follows:

-2003:  less than 10%

-2004:  12%

-2005:  22%

The Evidence

27.          Mr Meyers and Ms Kelly both provided written statements, gave oral evidence, and provided other documentation supporting their cases.  Mr Thorsby, Ms Kelly’s boyfriend and her son’s Scoutmaster, also gave evidence in support of her case. Additional material was provided to the Tribunal by the Secretary, Ms Kelly and Mr Meyers after the hearing.  All parties were given an opportunity to comment upon the new material.

Mr Meyers’ Evidence

28.          The information on which the first assessment for 2003 was carried out was provided by Mr Meyers in September 2005.  He claimed that he had the children for half the school holidays (42 days) and each alternative weekend (40 days), assessed as  22% of the time.  His claim that he had the children from 3.30 to 7.30 pm on Mondays and Tuesdays was not taken into account in the assessment (T15).  During cross-examination, Mr Meyers made a similar claim.  One document he relied on (Exhibit A1) differed a little.  In that document he set out various periods and in summary said that he had the children 70 nights including the soccer season.

29.          The claim made by Mr Meyers was the same for the 2004 tax year as for the 2003 tax year, that is he cared for his sons for half the school holidays and alternative weekends, plus Monday and Tuesday afternoons for a number of hours.   His evidence at the hearing before me was to similar effect. 

30.          Mr Meyers acknowledged that he sent a letter to Ms Kelly’s parents in similar terms to that in Exhibit K1.  At the hearing he said that he thought he sent it in early 2004.  Following is a summary of the letter’s contents.  He asked them to understand his side of the story and sought their intervention to decrease the animosity building between him and Ms Kelly.  He set out a history from 1991.  Relevantly, he wrote that he moved out of their family residence in 2002 with his son and daughter from his first marriage and continued to generate 70% of the business income which he shared equally with Ms Kelly.  He did not think divorce was imminent.   The arrangement ended when Ms Kelly began a new relationship and he agreed to a divorce.  He also stated that in September 2004 Ms Kelly instigated child support proceedings “even though she had stated that she wanted nothing more off me.  The money that she received up until 30 June 2003 and the jobs that I completed for less than half price in 2004 ($23,000) she considers a gift and still maintains that I have never given her child support which tarnishes my reputation.  At present I have now responded by instigating legal proceedings for money owed to the company approx ($85,000).”    

31.          He also stated that he had asked Ms Kelly to agree to child contact which included a clause “to the effect that the agreement constitutes 115 nights contact per year.  Lisa will not agree to this as I assume it will affect her sole parent pension and health care card which she claims under false pretences.  In return I would stop the legal proceedings for the money recovery and pay child support willingly ….”

Consideration

32.          Clearly, Mr Meyers wrote that letter after September 2004.  By that time, he had started litigation against Ms Kelly for money allegedly owed to the company.  His position was, as also expressed at the hearing, that he had provided child support because he had shared the income from the business with Ms Kelly although he had done most of the work, and had not been fully paid for certain jobs.  It seems that the litigation was to recover this “child support” that he had paid.    

33.          Mr Meyers denied Ms Kelly’s claim that he had waived his right to FTB in return for her not claiming child support.  He relied on an FTB instruction booklet for the year 2005 which stated that a person who had care of a dependent child for 10% to 30% of the time can waive the right to a share of FTB.  It followed, he said, that if Ms Kelly was correct, he must have had the children between 10% and 30% of the time.   I did not understand Ms Kelly to use the term “waive” in any legal or formal sense, but rather to indicate simply that he had agreed that she could claim FTB as long as she did not seek child support from him.  The contemporaneous evidence summarised earlier in this decision and the letter just referred to, are consistent with such an arrangement.  Mr Meyers claimed FTB, initially for the 2003 tax year, in September 2004 after Ms Kelly had requested the CSA to collect child support from Mr Meyers, contrary to the “agreement”. I accept Ms Kelly’s evidence that she only applied to the CSA after the divorce because she was advised to do so by Centrelink when she applied for a benefit in about July 2004 as her entitlement to child support affected the level of her benefit.  I find that there was an agreement as Ms Kelly said. 

34.          Both parties provided a number of “testimonials” or statements from people in support of their respective cases.   I give little weight to these documents.  Only Mr Thorsby gave evidence before me.  I prefer to rely on the contemporaneous evidence and on the evidence of the parties.  Unless a person lived with one of the parties, the evidence about how much time the children spent with each parent would be of little value.   None of the people who provided statements fell within that category except for Mr Meyers’ daughter, and then for a brief period. Her evidence was that the boys spent each alternative weekend, half of the school holidays and Monday and Tuesday evenings with Mr Meyers from the time of the separation.  For reasons given later, I do not accept that was so. To the extent that the evidence went to other matters, I find it of little assistance.  My remarks also apply to Mr Thorsby’s evidence. 

35.          During his oral evidence, Mr Meyers said that Ms Kelly’s chronology of events was wrong and could not have been prepared from a diary.   For example he pointed out that 13 July 2004 could not have been a pupil free day because it was in the middle of holidays.  Ms Kelly said that she corrected the dates at the SSAT hearing and conceded that some dates were from her diaries and others from her memory and credit card records.    

36.          I find that until around July 2004 neither Ms Kelly nor Mr Meyers would have paid any particular attention to how long their sons spent with each of them, or to keeping a record of that. The question only became important after Ms Kelly applied to the CSA and Mr Meyers claimed FTB. 

37.          Ms Kelly went to some trouble going back through diaries and financial records to work out when the children were with her or with Mr Meyers or both of them.  Some of her evidence was from her memory.  Mr Meyers told the SSAT that he had diaries too but he did not provide them to the SSAT or to this Tribunal.  

38.          I prefer the evidence of Ms Kelly to that of Mr Meyers.  I did not find his evidence reliable about the arrangements for caring for the children in the 2003 and 2004 tax year.  His evidence supported similar care arrangements from June 2002 through to July 2004, consistent with his providing 22% of the care in each of those tax years, as determined by Centrelink before the end of 2005.  I do not accept that reflected what happened.  I find that from the time of separation until about March 2005 there was a gradual evolution of a pattern of care.  Initially arrangements were very flexible, but after the divorce in March 2004 the care arrangements became more inflexible, until the Court orders were made in July 2005, which are rigidly adhered to.   

39.          The relationship between Ms Kelly and Mr Meyers was civil when they first separated.  In effect he set up another household where he lived with his older two children, leaving Ms Kelly and their children in the former matrimonial home.  I find that until about March 2003, Mr Meyers mostly saw the boys at the former matrimonial home or for brief periods at his residence. One or two of the boys may have stayed overnight occasionally but overnight stays by the older two boys became more regular after March 2003.  I accept Ms Kelly’s evidence that the youngest boy did not stay overnight until 2004.  I also accept her evidence about the various activities the boys attended after school and that she took them to and fro most of the time.  I accept that Mr Meyers attended soccer, but I do not accept that he was the “soccer dad” as he asserted.  Both he and Ms Kelly went to soccer and the older boys took themselves to home games. 

40.          It is not possible on the evidence to make accurate arithmetical calculations of the percentage of care provided by Ms Kelly and Mr Meyers.  Doing the best I can, I find that Mr Meyers provided less than 10% of the care of the boys during the 2003 tax year, and 12% of the care during the 2004 tax year, that is about 44 days. 

Decision

41.          For the above reasons, the reviewable decision is affirmed. 

I certify that the 41 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member,
Mrs Josephine Kelly

Signed: Ms Preethi Nimmagadda

Associate

Date of Hearing  14 December 2006   
Date of Published Decision      27 March 2007
Solicitor for Applicant                Self-represented
Advocate for the Respondent   Centrelink Legal Services Branch
Solicitor for Third Party             Self-represented