Nowicz and Department of Family and Community Services - [2001] AATA 628

DECISION AND REASONS FOR DECISION [2001] AATA 628

ADMINISTRATIVE APPEALS TRIBUNAL )

) No S2000/458

GENERAL ADMINISTRATIVE DIVISION       )
           Re      DEBRA NOWICZ
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  1st Respondent

And IAN NOWICZ

2nd Respondent

DECISION

Tribunal Senior Member J.A. Kiosoglous MBE

Date 4 July 2001
PlaceAdelaide

Decision      Pursuant to section 43 of the Administrative Appeals Tribunal Act 1975, the Tribunal affirms the decision under review.
  (Signed)
  J.A. KIOSOGLOUS
  (Senior Member)
CATCHWORDS
SOCIAL SECURITY – pensions, benefits and allowances - Family Tax Benefit – shared care of children – correct apportionment of benefit – pattern of care discussed – method for assessment of correct apportionment considered
A New Tax System (Family Assistance) Act 1999 ss. 21, 22, 59
Re Vidler and Secretary, Department of Social Security and Another (1994) 36 ALD 720
Secretary, Department of Social Security v Lowe [1999] FCA 705

REASONS FOR DECISION

4 July 2001 Senior Member J.A. Kiosoglous MBE

This is an application by Ms Debra Nowicz (the applicant) for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 2 November 2000 (T2) which affirmed upon review a decision of an authorised review officer (ARO) of the respondent dated 24 August 2000 (T13) which had affirmed a decision of a delegate of the respondent dated 7 August 2000 (T4) to set the percentages of Family Tax Benefit payable to the applicant and Mr Nowicz (the second respondent) at 73% and 27% respectively.
The Tribunal received into evidence the documents lodged pursuant to s.37 of the Administrative Appeals Tribunal Act 1975 (T1-T15), together with four exhibits lodged by the respondent (Exhibits R1-R4). In addition, the Tribunal heard evidence from the applicant, who represented herself, and from the second respondent, who represented himself. Mr Kilderry, departmental advocate, represented the first respondent.
The issue before the Tribunal is to determine the correct apportionment of Family Tax Benefit payable to the applicant and second respondent.
history of the application
The applicant and second respondent are the natural parents of two children, born in 1990 and 1992. Following some considerable dispute over legal responsibility for the children, a new Family Court order was issued on 20 June 2000 (T6). The Tribunal notes the following provisions from that order:
"…
2.That the mother do have the long term responsibility for the care welfare and development of the abovenamed children of the marriage.
3.That the said children do reside with the mother who shall be responsible for their day to day care welfare and development.
4.That the mother do give and the father do take contact to the infant children of the marriage as follows:-
(a)During school terms on alternative weekends from the conclusion of school on Friday until the commencement of school on the following Monday, or if Monday is a Public Holiday, then the commencement of school on the following Tuesday, commencing on Friday the 2nd day of May 2000;
(b) That contact pursuant to sub-paragraph (a) herein be suspended during school holiday periods and recommence on the first weekend of each school term;
(c) For the first week of each term school holiday period, at the conclusion of school at the end of the term for a period of one week concluding on 10.00 am on Saturday of the middle weekend;
(d) For half of the Christmas school holiday periods at times to be agreed in writing by the parties one month prior to the commencement of the holiday period, or failing agreement as ordered by this Court;
(e) From 4.00 pm on the 24th day of December 2000 until 4.00 pm on the 25th day of December 2000 and each alternate year thereafter;
(f) From 4.00 pm on the 25th day of December 2001 until 4.00 pm on the 26th day of December 2001 and each alternate year thereafter;
(g) At such other times as may be agreed by the parties;
…"

On 7 August 2000 a delegate of the respondent determined to reassess the applicant's and second respondent's apportionment of Family Tax Benefit, in accordance with the new legislative regime imposed by the implementation of the A New Tax System (Family Assistance) Act 1999 (the Act) as and from 1 July 2000. This resulted in an apportionment of 73% for the applicant and 27% for the second respondent. The ARO and SSAT affirmed this decision upon review.
legislation
The Act replaces the old Family Allowance provisions with a new Family Tax Benefit payment, paid according to the provisions of the Act. Section 21 of the Act provides for the normal eligibility for the benefit, subject to the other provisions of that division of the Act. Section 22 covers the situation whereby more than one individual has care for the child in question, and provides (inter alia):
"…
22.(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
(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 or is living with the adult.
…
22.(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) 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.
…"

The actual rate of benefit is then to be calculated in accordance with schedule 1 of the Act, and pursuant to sub-section 59(1) of the Act, the Secretary of the respondent may determine the percentage for each eligible person where two people are eligible and are not a couple.
applicant's evidence
The applicant told the Tribunal that the percentages allocated to her and the second respondent were not accurate. She contended that the second respondent was only entitled to a small amount of the benefit which would represent the percentage for school holidays. She stated that the 10 year old daughter often chooses not to go on contact visits, and the second respondent only has contact on odd occasions. She further stated that their son only goes on contact visits if he cannot get out of them. She gave evidence that the daughter might only go two days out of a week during school holiday contact times, but she has not kept any records as to the times and dates involved.
second respondent's evidence
The second respondent told the Tribunal that the Family Court order reflects the actual situation for the most part, and any other changes are only trivial. In that regard, he stated that both children have been coming on contact visits since Christmas time, and that it has only been on the last occasion that their daughter did not come. He further stated that there was no major change, for if their daughter did not come one weekend, their son would come both weekends, so things even out. He gave evidence that their son stayed a full fortnight of the last school holidays, with their daughter staying three days, so that things averaged out about the same as the Court order.
first respondent's submissions
Mr Kilderry submitted, on behalf of the first respondent, that both children are FTB children for the purposes of section 22 of the Act. He referred to departmental policy on "pattern of care" (Exhibit R2) and submitted that it was appropriate to consider the Court order in determining the appropriate percentages, and that no evidence has been forthcoming which would indicate that there is substantial deviation from the terms of the Family Court order.
discussion and findings
The Tribunal has been unable to find any precedent which has considered the operation of the Act, and notes that it only came into operation on 1 July 2000. The Tribunal is satisfied, and so finds, that sub-section 22(3) of the Act is satisfied such that both children in this matter are "FTB children" of both the applicant and second respondent. Pursuant to section 59 of the Act therefore, the Tribunal may determine the percentage of benefit that is to be paid to the applicant and second respondent. Section 59 of the Act provides the Secretary (and therefore the Tribunal) with discretion to determine the appropriate percentage. That discretion is to be exercised taking into account the provisions of section 22 of the Act in cases such as the present application.
The SSAT erred in its consideration that section 22 provides that the Family Tax Benefit is to be determined by the contact set out in the family court order. That reads something into section 22 that plainly is not there. Sub-section 22(3) of the Act only serves to establish when a child will be an FTB child for the purposes of the Act. Sub-section 22(3) must be read in conjunction with sub-section 22(7) of the Act. Sub-section 22(7) refers to a "pattern of care" in relation to the FTB child. In this case, sub-paragraphs 22(7)(b) and (c) are satisfied, and the question to determine is what has been the pattern of care with respect to these children.
In this regard, Mr Kilderry referred the Tribunal to various policy documents, and it notes in particular the "Family Assistance Guide" (Exhibit R2). It has also considered the various explanatory memorandums and reading speeches introducing the Act to Parliament, which are unfortunately of little assistance. What is clear, is that the import of sub-section 22(7) is that "pattern of care" refers not to the actual daily care of the children, but to the care of the children as assessed over a period of time. In this regard, the phrase is comparable to "pattern of care and control" as considered by Deputy President Forgie in relation to Sole Parent Pension in Re Vidler and Secretary, Department of Social Security and Another (1994) 36 ALD 720 at paragraph 64 (inter alia):
"64. The structure of the sole parent pension scheme does not concern itself with variations in the actual care arrangements from day to day but with care over a period of time…In this case, there is a consistent pattern of care and control alternating every few days between Mr Vidler and Mrs Ashford with them both having joint custody at all times. The pattern is such that I find that Jullie is the dependent child of both of them for the whole of the period I must consider in this case.
…"
That approach in relation to that legislation was approved by the Full Federal Court in Secretary, Department of Social Security v Lowe [1999] FCA 705, and it is an approach which finds some resonance with this Tribunal when interpreting the wording of sub-section 22(7). This also makes sense from a practical point of view. The first respondent should not be forced into a position whereby it must entertain continual applications for variation of the Family Tax Benefit apportionment based upon minor changes in actual day to day care arrangements. The apportionment must instead, be based upon a common sense appraisal of the pattern of care exhibited over a period of time. Minor variations do not effect the apportionment payable pursuant to the wording of sub-section 22(7).
In that regard, 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.
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.
The Tribunal therefore turns to the evidence before it in the current application. It has regard to the terms of the Court order, which, as the first respondent calculated, amounts to a 73%/27% split between the applicant and second respondent, based upon the amount of time in each party's care. The Tribunal must also have regard to the evidence before it suggesting some departure from the terms of the order. The second respondent contended that any such departures have only been of a minor nature, and that when their daughter has not come for a full visit, the son has come for a longer visit. The applicant pointed to a recent example whereby their daughter did not attend for a contact visit, but was unable to substantiate any other occurrences whereby there has been a significant departure from the terms of the Court order. In that regard, she remained silent on the second respondent's claims that the son would often come for two consecutive weekends if the daughter did not come or that in the last school holidays, the son came for the duration, with the daughter not staying for a full week. The only evidence she offered with respect to the son is that he "mostly goes unless he can get out of it".
On the balance of the evidence, the Tribunal is not satisfied that the applicant has demonstrated a significant departure from the pattern of care established in the court order. What departure there is from that order appears to be of a minor nature, and the Tribunal accepts that the son's slightly greater level of contact with the second respondent balances out the lesser contact engaged in by the daughter. Taking the period of time over which the Tribunal is able to assess a pattern of care, it finds that the balance struck by the first respondent, albeit based upon an erroneous and narrow approach, is the appropriate balance given the whole of the circumstances as to the pattern of care for the children.
decision
Accordingly, for the above reasons and pursuant to section 43 of the Administrative Appeals Tribunal Act 1975, the Tribunal affirms the decision under review.
I certify that the 19 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member J.A. Kiosoglous MBE
Signed:         .....................................................................................
  Personal Assistant
Date/s of Hearing  15 June 2001
Date of Decision  4 July 2001
Counsel for the Applicant        In person
Solicitor for the Applicant         -
Counsel for the Respondent    Mr R. Kilderry
Solicitor for the Respondent    Centrelink
Counsel for 2nd Respondent    In person
Solicitor for 2nd Respondent     -